- 477
If they can't guarantee the caps it would be nice to have a bailout clause if the caps are lowered, although that is wishful thinking.
If they can't guarantee the caps it would be nice to have a bailout clause if the caps are lowered, although that is wishful thinking.
- 10,829
There are 2 IAs with a 4 year surrender.
There are probably 9 or 10 with a 5 year surrender. Same with 6 & 7 year surrenders. The average street comp is 3%-4% for that range.
Competitive carriers in that range include NWL, AE, AG, GAFRI. AG has a really nice looking 7 year product that has a 1.5% spread and uncapped gains. AE has the same with a 6 year product and a 1.75% spread.
GAFRI's 6 year product has bailout caps....
JoeAnnuity
Expert
- 31
One major reason they dont guarantee the caps for a significant length of time is because the companies dont know what the price of options will be on a year to year basis. The higher the volatility in the S&P 500, the higher the cost of options and vice versa.
Not to mention it works both ways, why lock in a crappy cap rate when the likely hood is that your cap rates may go up if interest rates improve?
- 10,829
Have you ever seen caps increase on an annuity? Ive always wondered if they really are going to rise any once rates start to rise...
- 8,707
Unless it's a flex premium product what incentive does the carrier have to raise caps?
- 11,511
This is the prior ANICO product, but at least ANICO shows some rate history:
ANICO Strategy 10 Indexed Annuity:
http://img.anicoweb.com/cs/groups/public/@anpub/@img/@content/documents/webcontent/im_rh_asia10.pdf
Notice Renewal caps from:
- July 2008 to August 2008
- February 2009 to March 2009
From that point on, it was a steady decline to lower caps before the product was discontinued.
ANICO Strategy 10 Indexed Annuity:
http://img.anicoweb.com/cs/groups/public/@anpub/@img/@content/documents/webcontent/im_rh_asia10.pdf
Notice Renewal caps from:
- July 2008 to August 2008
- February 2009 to March 2009
From that point on, it was a steady decline to lower caps before the product was discontinued.
- 10,829
that is my thinking as well. rates have declined for so long ive never sold IAs in a rising market, so I honestly have no clue what will happen if the 10y jumps a few percent...
