Best Annuities for Growth an Income

[sinclaircs]

Are there any rating systems out there for annuities? how about tracking past performance?


What are the best annuities for Growth? How about income?

How about presentations or flip charts? do you make you own or use a service?

Thanks
Craig

 

[EAJoe]

I sent you a PM.

 

[ShawnSIM]

Are there any rating systems out there for annuities? how about tracking past performance?


What are the best annuities for Growth? How about income?

How about presentations or flip charts? do you make you own or use a service?

I too would be very interested in this, especially the past performance aspect.

 

[DHK]

Past performance of a specific annuity will depend on what the cap rates were at the time.

If anything, I'd want to see the cap fluctuation history of various annuities compared to interests rates or some other benchmark.

 

[EAJoe]

Past performance of a specific annuity will depend on what the cap rates were at the time.

If anything, I'd want to see the cap fluctuation history of various annuities compared to interests rates or some other benchmark.

You're 100% correct. It's also really tough to say which products have performed the best because two identical contracts with anniversaries a week a part can yield vastly different results.

Renewal rates/caps are far more important than the rates at issue. If a product has high comp or a bonus, you can bet that the renewal rates typically won't be nearly as strong as the issue rates. With bond rates as low as they are, companies simply can't afford to pay out 9-10% total comp (Agent/FMO), an 8% bonus, and then still give strong crediting rates through the life of the contract.

American National's Strategy Plus 7 & 10 are great contracts, with strong rates at issue, strong renewal rates, fair commission, but no real bonus. Some of their contracts recently have renewed with an S&P annual point to point cap 1.15% higher than at issue.

 

[DHK]

As I've been reviewing some of these "source of funds" issues and getting to the 'root' of the problems (aside from pure incompetency in some cases), it is often an issue of surrender charges being charged and being promised a "bonus" to offset the charge.

One thing I like about ANICO's ASIA 7 & 10 annuities... is they do have a bonus... but it's only 1%. That helps to offset some producer's tendencies of wanting to offset surrenders with 'bonuses'. Plus the ANICO 7 & 10 year surrender charges make them feel like the most 'suitable' annuity to sell, particularly in California... while not missing out on commissions that you could've earned on other company's annuities with longer surrender schedules. In fact, they now have a 'trail commission' option that's great too.

For me, ANICO is the standard benchmark that I measure any other annuity against... especially for California.

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FIAs are definitely a 'concept' sale that takes advantage of the underlying index segment's volatility. Capture some upside, subject to cap, and limit the downside.

It's really not a product meant to have its performance compared to another FIA contract like mutual fund performance can be compared.

 

[AOKING]

Since it has low bonus, what is the cap on upside? Also, is the comp higher because of that? Just curious.

 

[EAJoe]

Since it has low bonus, what is the cap on upside? Also, is the comp higher because of that? Just curious.

5% on the S&P 1 year point to point with 100% participation method, 2% on the monthly sum method, 4% on the one year performance method, 2.40% fixed. There's some three and five year strategies available as well, but I stay away from those typically. Here's their full rate sheet for October:

http://img.anicoweb.com/cs/groups/p...t/documents/webcontent/img_interest_rates.pdf

Comp for the 7 year is 5% with no trails, and comp for the 10 year is 7% with no trails. The trail option takes 2% off the first year comp with both products, then gives you .50% annually for the life of the contract.

There's two options for the income rider 7% fixed roll up for 10 years, .60% annual fee, 4% + index interest for 10 years, .30% annual fee.

Overall it's a very simple, consumer friendly product with great renewals and low rider fees.

 

[pfg1]

5% on the S&P 1 year point to point with 100% participation method, 2% on the monthly sum method, 4% on the one year performance method, 2.40% fixed. There's some three and five year strategies available as well, but I stay away from those typically. Here's their full rate sheet for October:

http://img.anicoweb.com/cs/groups/p...t/documents/webcontent/img_interest_rates.pdf

Comp for the 7 year is 5% with no trails, and comp for the 10 year is 7% with no trails. The trail option takes 2% off the first year comp with both products, then gives you .50% annually for the life of the contract.

There's two options for the income rider 7% fixed roll up for 10 years, .60% annual fee, 4% + index interest for 10 years, .30% annual fee.

Overall it's a very simple, consumer friendly product with great renewals and low rider fees.

That does sound good.

 

[EAJoe]

That does sound good.

It is. The renewal rates really seal the deal for me. Contracts issued in September 2014 had an S&P annual point to point cap of 4%, and renewed in September 2015 with a cap of 5.15%. They nearly always renew at the same rate as new money policies - it doesn't get much more fair than that.

Edit: I forgot to mention that the monthly sum (monthly point to point) has been issuing and renewing at 2% since 2013 when the product was introduced. I wouldn't personally use this strategy right now, but if the market where to tank, it could be a good one to get in once it starts to steadily go back up.