Axa Accumulator Elite 2007

[John H W]

New member with questions on my current axa policy and SPIA products that might supplement it.

I am retired with the above policy purchased in 2007. Wife and I have no legacy needs. I am considering buying some SPIA policies to put an income floor and to increase my current income from assets.

I would like advice on where to go to be sure I fully understand my current va policy and to assess SPIA (new policy or sma?) options.

Since Axa has my VA policy and I am generally pleased with it, should I see if they quote on SPIA products to supplement my current policy? Or should I seek out say a NYL source to get quotes on SPIA options and help me define my needs?

Thanks in advance

 

[Tahoe Ray]

New member with questions on my current axa policy and SPIA products that might supplement it.

I am retired with the above policy purchased in 2007. Wife and I have no legacy needs. I am considering buying some SPIA policies to put an income floor and to increase my current income from assets.

I would like advice on where to go to be sure I fully understand my current va policy and to assess SPIA (new policy or sma?) options.

Since Axa has my VA policy and I am generally pleased with it, should I see if they quote on SPIA products to supplement my current policy? Or should I seek out say a NYL source to get quotes on SPIA options and help me define my needs?

Thanks in advance

An independent agent or advisor can quote you AXA, NYL, and everyone else.

If you go to NYL, you're going to get NYL (which is not necessarily bad, their rates can be very competitive and they have excellent ratings).

Any independent should be able to spreadsheet all of the carriers for you based on objective, income, and carrier ratings.

Good luck.

 

[John H W]

Thanks Ray. My first need to understand how my axa product works as that will help define my needs for a SPIA to add to it. I think I have a pretty good understanding of my Axa VA except for the specifics of the annuity options ( 10 year certain and life? what other options of annuity will I have?) Does the death benefit to my heir go away if and when I convert it to an annuity with axa) just to cite two. That has me leaning toward an axa expert?

 

[Allen Trent]

First, call Axa & ask if your VA has any added riders such as GMWB or GLWB. If so, you have been charged an extra 1% or so each year for this rider. The riders can be activated & function similar to a SPIA without forfeiting your balance of funds like happens with a SPIA. The riders guarantee that you can take X% each year, usually around 5% of annuity value & be guarnteed to be able to withdrawal that amount for the rest of your life even if the market went down & your account value went to 0.

If no rider, then you can ask Axa for them to give you quotes on irrevocably annuutizing your account value. Basically, annuutizing is a SPIA, but sometimes older existing policies have outdated life expectancy tables & old interest rates & thus might pay better than a new SPIA from a new carrier as current products being sold are based on today's low interest rate marketplace & longer life expectancy.......both of which make checks smaller

 

[John H W]

My policy has a GMIB and a death benefit to help it meet that minimum income benefit guarantee. I am keeping this policy and am taking $45k a year from it now and can for life. Axa tried to buy me out of my GMIB option but I turned it down. I paid $400k for this policy in 2007. Ive been taking $45k for almost three years now and can for life. The GMIB is $720k because it grows at 6.5% a year. The market value is $310k now. The death benefit is also for $ 720k The death benefit goes away once I convert it to an annuity. If I do so in just under 3 years my annuity for life will be $51k with 10 years certain to fulfill my GMIB.. It is a keeper for me, but to decide how much of etc of an SPIA to get i want to understand the annuity options in my Axa policy better first.

 

[Tahoe Ray]

Thanks Ray. My first need to understand how my axa product works as that will help define my needs for a SPIA to add to it. I think I have a pretty good understanding of my Axa VA except for the specifics of the annuity options ( 10 year certain and life? what other options of annuity will I have?) Does the death benefit to my heir go away if and when I convert it to an annuity with axa) just to cite two. That has me leaning toward an axa expert?

An "AXA Expert" could be just about any financial advisor that sells variable annuities. They don't have to work for AXA since AXA has/had a wholesale arm where they distributed their annuities to financial advisors. The advisor will have to be securities licensed to do so (in most cases) and to give you advice accordingly.

That 2007 AXA product was almost always sold with their GMIB (as Allen points out above) and was one of the best products of its time. At one point (you'll have to find out which version you have), it allowed for 6.5% w/ds for life (even in your 60s) without giving up your principal. In fact, it was so good that AXA tried to buy a lot of them back a few years ago by sending clients checks for much more than their account value if they would forgo their rider.

Ask your friends if they have a trustworthy advisor that they work with who can help advise you. If you give them the opportunity to write the SPIA, you can probably get some free advice and if the product is as I describe, that advice should likely be to keep it and activate the rider.

I don't know anything about your personal situation so this is just general direction from my experience in the industry (I sold variable annuities as a company rep from 2004-2010 and now sell only fixed as a wholesaler). It is not financial advice nor a recommendation.

 

[Tahoe Ray]

My policy has a GMIB and a death benefit to help it meet that minimum income benefit guarantee. I am keeping this policy and am taking $45k a year from it now and can for life. Axa tried to buy me out of my GMIB option but I turned it down. I paid $400k for this policy in 2007. Ive been taking $45k for almost three years now and can for life. The GMIB is $720k because it grows at 6.5% a year. The market value is $310k now. The death benefit is also for $ 720k The death benefit goes away once I convert it to an annuity. If I do so in just under 3 years my annuity for life will be $51k with 10 years certain to fulfill my GMIB.. It is a keeper for me, but to decide how much of etc of an SPIA to get i want to understand the annuity options in my Axa policy better first.

lol....

 

[Allen Trent]

My policy has a GMIB and a death benefit to help it meet that minimum income benefit guarantee. I am keeping this policy and am taking $45k a year from it now and can for life. Axa tried to buy me out of my GMIB option but I turned it down. I paid $400k for this policy in 2007. Ive been taking $45k for almost three years now and can for life. The GMIB is $720k because it grows at 6.5% a year. The market value is $310k now. The death benefit is also for $ 720k The death benefit goes away once I convert it to an annuity. If I do so in just under 3 years my annuity for life will be $51k with 10 years certain to fulfill my GMIB.. It is a keeper for me, but to decide how much of etc of an SPIA to get i want to understand the annuity options in my Axa policy better first.

Based on what you are saying, I cant imagine any scenario where irrevocably giving up your principal in exchange for a payout from Axa or a SPIA from another carrier could compare to what you are saying you can merely keep taking as GMIB withdrawals for the rest of your life. I am certain that is why Axa wanted to buy you out of it. I honestly think it is a disgrace that the SEC or other regulatory agencies would permit VA carriers to buy people out of those awesome old products they mispriced. They have gladly charged you every year literally 2.5-4% every single year for some of those benefits. Most people never elect them & unscrupulous agents roll these contracts to new contracts or carriers & the old carrier didnt have to provide the benefits they charged each year for.

So, if you are reading between the lines, I would highly suggest you be very, very skeptical of anyone that gives you a proposal to do something different than what you are already doing with that GMIB.

Maybe find a hourly fee only planner to pay to figure out your math on this & at the same time you get SPIA quotes elsewhere.

Good luck

 

[John H W]

Thanks all. I am not contemplating getting out of the axa product only want to understand the annuity I can get in 5 or 7 years down the road so I can size a supplemental SPIA with a clear understanding of the annuity amount. I can keep getting $45k / year for life but if I wait to take the annuity feature the annual amount is more than $45k/yr. For example if I convert to an annuity an option in this policy I can get $51k / year (it is an annuity for life with 10 yr certain). I want to know what will it be if I wait an additional year or three, and how long the time certain is as it goes down once I am 10 years from 85 I believe. If I can get a $60k/ yr annuity with a 7 or 8 year certain by waiting until 2026. I will need less of a SPIA and will have more funds in the market