Best annuity payout 5 years

[LostDollar]

The other issue comes in getting a correct illustration.

I want an NAC illustration that shows a payment for joint lives with a 10 year rollup.

NAC has a consumer facing website. I can go to that website, select joint lives, put in an annual payment, enter a from and to age that is a ten year period, and get a quote for an annual lifetime payment.

My agent is relying on a person at his annuity IMO to run the illustrations.
After 3 requests and attempts to rephrase them each time, I have three illustrations that only show 9 8% rollup periods instead of 10. Two are based on joint lives, the other is based on single life. No annual payments match the number from the quoter.

After the third one, I ratcheted down my anger quotient and called my agent, just catching him between clients. He is going to call a different annuity quoting person at that back office organization and see if he can get what I want.

Last night, after reading a Nationwide brochure that explained the basic issue at a high school language level, I learned what was going on, and then found the info buried in the NAC brochure. The NAC explanation was written at college reading level which I don't do so hot anymore and was also not as prominently displayed as in the Nationwide brochure.

When you are actually using one of these products you MUST be aware that the LPP payout factor you get to use is based on THE COMBINATION of the length of time the annuity has been held and the annuitant's age.

Each annuitant will have 2 ages in each annuity contract year.

Say you have the youngest annuitant in a joint life payout situation being age 75 after 10 years. They will show as age 75 on the 10th line of the illustration -- AT THE END OF THE YEAR. They will show as age 75 on line 11 of the illustration -- AT THE BEGINNING OF THE CONTRACT YEAR.

They were running the illustration as though the 75 year old was starting his 10 year payment during the last part of the 10th contract year. They need to be doing the illustration for the person being 75 at the beginning of the 11th year. That way BOTH the contract and the annuitant have aged 10 years since the contract was purchased.

I had this same issue with another agent and another carrier on an illustration a few months ago. Fortunately this agent was running his own illustrations, was able to understand what I was asking for, and got me the illustration I wanted on the second try.

Interesting tidbit of knowledge that came my way yesterday and today.

 

[Allen Trent]

Caveat, not an agent.

The first one is doubled LPA's for health events. NAC, Athene, and Am Eq all talk those up.

You meet certain criteria and get confined, you can get double LPA's for up to five years. I get all excited and figure-so if one of us has a health issue that puts us in confinement treatment, we can get some double payments.

Not so fast buster, lots of restrictions.

First, that's a max of 5 years per policy, not 5 years per annuitant.

You can not be confined at time of contract purchase.

Most carriers offering this enforce a waiting period of either 1 or 2 years of contract ownership before a double LPA can be collected.

And NOW, the little secret not mentioned in the same paragraph that tells you how wonderful this rider contract feature is: You may not have the double LPA feature after the accumulation value goes to zero. When I uncovered that little secret, I simply had to start over comparing annuities, we would never, ever, in a normal course of events get to use that option.

An illustration I just referred back to shows the accumulation value going to zero in 5 years using guaranteed numbers, going to zero in 9 years using backtested estimates for my index choices. Basically, when technical factors are considered, there is no possibility of a doubled LPA using the guaranteed numbers and maybe only 2-3 years in the backtested numbers where a doubled LPA might be possible.

In their defense(while I agree it is a bit deceptive), math doesn't math otherwise. There is no math that you or I could do to make someone have double money if already confined at time of purchase, or if both spouses got double payments for 5 years or if account value already went to zero from previous distributions, etc. Math just doesn't work that way.

If you use a pot of money for 1 thing it won't be there for the other 1 or 2 ways you can access it. While it may be a Swiss army knife in theory, each use diminishes it next use for same or different purpose

 

[LostDollar]

In their defense(while I agree it is a bit deceptive), math doesn't math otherwise. There is no math that you or I could do to make someone have double money if already confined at time of purchase, or if both spouses got double payments for 5 years or if account value already went to zero from previous distributions, etc. Math just doesn't work that way.

If you use a pot of money for 1 thing it won't be there for the other 1 or 2 ways you can access it. While it may be a Swiss army knife in theory, each use diminishes it next use for same or different purpose

Hi Allen,
Thanks for the response.

I want to talk with you a bit further on this but it takes me a long time to think out an write posts, I am unable to do that right now.

I got into both of the issues I posted about above because of LPA's, but they seem to be a bit arcane and I have had to learn the answers on my own and then teach them to agents with over 15 years of experience in the industry.

I think it is supposed to work the other way around.

(It is also very worrying to me because I truly don't know what I don't know and I don't know if there are other fine points of an annuity purchase I do not yet understand that are issues applicable to my purchase considerations.)

 

[PrivClientSG]

I am not in this marketplace, but occasionally I come across the need to take some money off the table so to speak, not have it at risk, and have "guaranteed" income X number of years from now. I have a specialist who I use for this need. I've seen some very interesting illustrations and products, and recently saw a Nationwide product that appeared to fit a series of specific needs very well.

Buy the annuity, get a bonus going in, and every year you defer you get something like an 8% increase on the income amount. Other than company risk, it seemed like it mitigated your other typical risks. While the monies are invested, there is almost a zero percent chance the income will be higher than illustrated.

I haven't dug deep into this which I always do before I pull the trigger and use as a recommendation. Thanks for the insights here.

 

[LostDollar]

I am not in this marketplace, but occasionally I come across the need to take some money off the table so to speak, not have it at risk, and have "guaranteed" income X number of years from now. I have a specialist who I use for this need. I've seen some very interesting illustrations and products, and recently saw a Nationwide product that appeared to fit a series of specific needs very well.

Buy the annuity, get a bonus going in, and every year you defer you get something like an 8% increase on the income amount. Other than company risk, it seemed like it mitigated your other typical risks. While the monies are invested, there is almost a zero percent chance the income will be higher than illustrated.

I haven't dug deep into this which I always do before I pull the trigger and use as a recommendation. Thanks for the insights here.

Caveat, not an agent.

Nationwide New Heights Select vs North American Income Pay Pro.
I think they both have the 8% rollup for 10 years. NAC also has a 1 year modified single premium approach. On the other hand you loose access to NAC after age 79, while Nationwide goes to 80. Newby's comments about when you select Joint life vs Single life payout are very important comparison factors. I would recommend looking at both.

The Nationwide information is almost impossible for me to see as a non-agent -- I will have to trouble an agent to provide me details on a product I may find unsuitable, wasting his time as a result.

One of my significant problems as a non-agent is how to go about understanding and assessing company risk for annuity carriers -- in my case NAC -Comdex 92 vs Nationwide Comdex 89.

After 10 years, one company offers me 1700 more per year in lifetime income. But.. does company risk say I should go with that company, go with the other company, or split the amount 50/50?

If you have any comments about how one finds and considers company risk factors in a scenario like that, I would be most grateful to hear them.

 

[scagnt83]

I am not in this marketplace, but occasionally I come across the need to take some money off the table so to speak, not have it at risk, and have "guaranteed" income X number of years from now. I have a specialist who I use for this need. I've seen some very interesting illustrations and products, and recently saw a Nationwide product that appeared to fit a series of specific needs very well.

Buy the annuity, get a bonus going in, and every year you defer you get something like an 8% increase on the income amount. Other than company risk, it seemed like it mitigated your other typical risks. While the monies are invested, there is almost a zero percent chance the income will be higher than illustrated.

I haven't dug deep into this which I always do before I pull the trigger and use as a recommendation. Thanks for the insights here.

The income riders can be solid products for the right situation. Very strong guaranteed income.

Biggest drawback is that most do not provide inflation options. And you will zero out the actual cash surrender value pretty quickly, relatively speaking.

I do not think Nationwide has any type of inflation protection once income begins. Some use the index gains to increase the income, others use a set COLA increase, others use CPI. Of course the inflation options start you at a lower income, so the right balance has to be there for the situation.

But they can be a strong alternative to a SPIA or DIA.

 

[MTC]

I am not in this marketplace, but occasionally I come across the need to take some money off the table so to speak, not have it at risk, and have "guaranteed" income X number of years from now. I have a specialist who I use for this need. I've seen some very interesting illustrations and products, and recently saw a Nationwide product that appeared to fit a series of specific needs very well.

Buy the annuity, get a bonus going in, and every year you defer you get something like an 8% increase on the income amount. Other than company risk, it seemed like it mitigated your other typical risks. While the monies are invested, there is almost a zero percent chance the income will be higher than illustrated.

I haven't dug deep into this which I always do before I pull the trigger and use as a recommendation. Thanks for the insights here.

The payout factors for Nationwide are horrendous compared to what's offered currently.

 

[LostDollar]

The income riders can be solid products for the right situation. Very strong guaranteed income.

Biggest drawback is that most do not provide inflation options. And you will zero out the actual cash surrender value pretty quickly, relatively speaking.

I do not think Nationwide has any type of inflation protection once income begins. Some use the index gains to increase the income, others use a set COLA increase, others use CPI. Of course the inflation options start you at a lower income, so the right balance has to be there for the situation.

But they can be a strong alternative to a SPIA or DIA.

Caveat, not an agent.

One consumer's viewpoint, I would prefer to use laddering rather than increasing LPA's. Over a large database of consumers I feel like the increasing LPA concept is more likely to benefit the carrier than the consumer and I am most hesitant to gamble my funds that I might be one of the consumers who would benefit rather than lose by applying the concept.

As a consumer, the problem I experience with attempting to use the concept, is amounts of purchase. If one has the funds to purchase multiple annuities in large amounts -- say $100K, it isn't a problem. When one only has smaller amounts for multiple purchases, you either get laughed at and cross presented to another, entirely inappropriate, product; or, politely told no for a variety of reasons.

 

[LostDollar]

The payout factors for Nationwide are horrendous compared to what's offered currently.

I know that was probably not addressed to me, but thanks for making the comment.

Contrary to what I see for companies like NAC and Athene, I have not been able to find tables of Nationwide LPP's online, but I was beginning to suspect that.

 

[LostDollar]

The income riders can be solid products for the right situation. Very strong guaranteed income.

Biggest drawback is that most do not provide inflation options. And you will zero out the actual cash surrender value pretty quickly, relatively speaking.

I think @Allen Trent 's comment above about math may come into play here. I've not had any illustrations to confirm this, but I think I could buy an Oxford MYGA with a GLWB rider and have it hold a pretty high (in relation to purchase price) accumulation value over the surrender period of the contract. But .......