Annuity Products

[Guidance]

I would like some feedback regarding annuity options. If someone was looking to purchase annuity for the sole purpose of potential growth on initial investment, which would be the best option...a 10 % bonus with low caps? Or no bonus with higher or no caps?

Also, other than American equity and equitrust, does any other carrier offer 10% bonus?

Thank you!

 

[DHK]

Allianz has some annuities that offer 20% bonuses... but only if you take lifetime income from those contracts. That seems to be a common theme with most large bonus contracts.

Here's the thing about bonus annuities: "TANSTAAFL" (There ain't no such thing as a free lunch.)

If you're looking at an annuity SOLELY for growth (capital appreciation) on the initial investment and NOT for converting that capital into a lifetime income... then not only should you generally avoid bonus contracts, but it's also possible that annuities aren't appropriate anyway.

I'd also avoid lifetime income benefit riders in this case.

If they want a principal protected/guaranteed account with the potential for growth above CD & money market rates while keeping the funds intended for use in retirement... then a no-bonus, higher cap rate annuity is the best fit.

If you were to offer a bonus annuity, make sure you understand EXACTLY how the terms apply for the client to keep and be vested for that bonus. In my opinion, lots of bonus annuity sales are made as a way to entice people who already have annuity contracts to switch to a new carrier promising that the bonus will "offset" any surrender charges... or a way to entice people to buy annuities who normally wouldn't... while the agent may not understand the product.

Alan Lewis comes to mind with his criminal charges (that were dropped later), but he didn't understand how the annuity bonuses worked, nor could he adequately explain them to his clients.

Since I'm in California, I'm very careful about the annuities I offer and represent to clients.

 

[bill3173]

I would like some feedback regarding annuity options. If someone was looking to purchase annuity for the sole purpose of potential growth on initial investment, which would be the best option...a 10 % bonus with low caps? Or no bonus with higher or no caps?

Also, other than American equity and equitrust, does any other carrier offer 10% bonus?

Thank you!

No bonus and no caps with the highest participation rate and guaranteed fixed rate you can find. Unless you need a bonus to overcome surrender charges, they're usually not the best choice.

 

[Tahoe Ray]

No bonus and no caps with the highest participation rate and guaranteed fixed rate you can find. Unless you need a bonus to overcome surrender charges, they're usually not the best choice.

Agreed .

 

[GoPokes]

No bonus and no caps with the highest participation rate and guaranteed fixed rate you can find. Unless you need a bonus to overcome surrender charges, they're usually not the best choice.

My name is gopokes and I approve of this message

 

[EAJoe]

I would like some feedback regarding annuity options. If someone was looking to purchase annuity for the sole purpose of potential growth on initial investment, which would be the best option...a 10 % bonus with low caps? Or no bonus with higher or no caps?

Also, other than American equity and equitrust, does any other carrier offer 10% bonus?

Thank you!

TriVysta from Guggenheim is great. No bonus, no fees (unless they choose the income rider), 6 different uncapped index strategies, 10 year surrender period, and waiver of surrender for terminal illness/critical illness diagnosis or nursing home confinement, and 10% free withdrawals starting after the first contract anniversary.

The one thing that I really like about this product is that the CROCI Sectors II index from Deutsche Bank has over a 10 year track record of performance. A lot of the new annuities with new indices can only show hypothetical backtested performance. It's easy to design an index to look like it would have performed well during a certain time period (2008), but actual performance can't be debated.

 

[Guidance]

Thank you all!! Everything you have shared has been very helpful!!!

 

[bill3173]

If you like Equitrust and need a bonus, their Market Booster IA pays an excellent bonus over three years 4% up front, and 3% over next two years, with an effective yield of 8%.

It's good for people that want an IA, but don't have a lot of $$ to put in. The shorter surrender period (9 years) is attractive as well. The options on this one are good, but you'll have to review those on an individual basis.

 

[SusieQ2]

Someone called me about using F&G Retirement Pro. Like all marketers, they made it sound like the very best product out there for every situation.

I haven't dug too deep into it yet but was just curious to see what opinions everyone has on here. It seems like a lot of "smoke and mirror" type stuff that goes along with it..........made to sound better than it really is for the consumer.

Seems like F&G's Comdex score and the Chinese buy out are reasons to look elsewhere since there are a lot of choices out there. Plus, I swore years ago I would never write with them again because of their horrendous customer service. And yes I realize there are plenty of companies that are not 100% American companies, there is just something about a Chinese buyout that bothers me, can't really decide why, it's just a psychological thing.

I think I just answered my own question