Best company for short term annuity?

[LostDollar]

Thank you for the answer

Legally, you cant commingle different types of money (or shouldn't). So, if you open a Traditional IRA with them by a rollover, you can't later make monthly Roth contributions or after tax contributions. While the carrier may allow it as they don't know your tax return, you wouldn't want to because sme day when you take money out or die, the 1099 R they issue to you or your family will show the entire amount as 100% taxable because you labeled the account as a Traditional IRA. Each type/source of funds needs its own separate policy/account.

Yes, I understand. I got that clarified in another thread I started to which tahoeray responded.

Very few flexible premium annuities in the industry as they don't pay much interest to client & no money in it for the agent to deal with the hassles of annuity suitability & best interest. $100 per month would literally pay the agent between $1& $4 per month max

(How much does an initial premium of $5K-$6K pay?)

I am still giving thought to my situation.

Now that I know this type of annuity exists, I think it is likely to be a good match for my situation. Possibly the best match. If I choose to pursue it, I think I can express clearly to an agent or insurance company why it is suitable for me.

I do appreciate hearing about the commission issue. It helps me understand one of the concerns of one of the other two parties to this purchase.

There are four different approaches available to me to find an agent for an annuity purchase and I am pretty sure one of them will work, even for this situation if I choose to pursue it.

 

[Allen Trent]

How much does an initial premium of $5K-$6K pay?

Most of the fixed annuities & MYGA commissions are very low these days around 1-3% in some cases, so potentially $150-$200 on the lump sum.

Check & see what the surrender charge schedule is for that product as you started this thread about short duration annuities. Such products like this flex premium likely have an 8yr surrender schedule that many times starts with each deposit.

What is their current crediting interest rate, many are 1-2%

 

[LostDollar]

Caveat, not an agent

I am at a bit of a handicap here because I am working from a sheet I am not supposed to know even exists. I couldn't find any online stuff about it except for a short set of Smart Asset comments about the 7 year version.

I will have to find an agent willing to sell it, or something similar, and ask questions. Here's what I think are the answers to your questions.

Liberty Choice (7 year version is Liberty Select)
(and I am talking about non-qualified funds with this potential purchase)
(The following is from a Dec 1, 2021 sheet. I have no way to get more current information without finding and talking with an agent who represents LBL.)

Maximum Withdrawal charges.
5 Yrs.
8,7,6,5,4%
+/- MVA 1st 5 yrs

(I don't understand the MVA stuff, that is one thing I will have to have an agent explain to me.)

1st year rate: 1.65% base rate + 1.00% 1st year bonus = 2.65% 1st year rate
Current rate guarantee: 1 yr
Renewal rate strategy: Rate Determined Annually
Minimum guaranteed rate: 1%

 

[Allen Trent]

(I don't understand the MVA stuff

MVA protect the carrier from interest rate risk allowing them to credit you less if you take distributions or surrender. If products being sold at the time are crediting less interest they could adjust your rate down also if you triggered that aspect from taking distributions or surrender.

I never got a full handle on it, but here is something to look up. What is a Market Value Adjustment (MVA) & Why Is It Important?

 

[scagnt83]

Using the site you linked earlier in the thread, It looks like if I could come up with $5K of the same type of IRA, Guggenheim has a $5K min purchase product.

I also stumbled over a 4 page agent product document for Liberty Bankers Life. It was dated Dec 2021. It showed another type of annuity, a flexible payment annuity. This one was 5 years. It had a minimum initial payment of $5K with minimum monthly additions of $100. If it is not restricted to qualified funds and if you don't have to be employed to deal with the monthly payments, that might be an option that would be useful to me.

You will find more Indexed Annuities these days that take Flexible Payments vs. Fixed Annuities or MYGAs.

Great American still has one or two flex premium 7y FIAs.
American Equity used to have a few flex premium FIAs.
National Wester has a few but they are a horrible carrier to do biz with.
Lincoln National used to, not sure if they still do or not.

Jackson National has a one or two Flex Premium Fixed Annuities.

Most annuities allow you to put Non Qualified funds into them. Often the minimum premiums are different for Q vs NQ, but most allow for NQ funds.

And if its NQ and a flex premium, you can add to it regardless of employment status.

 

[scagnt83]

(I don't understand the MVA stuff, that is one thing I will have to have an agent explain to me.)

MVA only comes into play if you want to Surrender your Annuity early, before the surrender term is complete.

It is a way for the carrier to protect themselves from interest rate risk. Either you take on that risk or the carrier does... if the carrier does, they have to set aside money to cover that risk... if you take on that risk, the carrier can give you a higher interest rate since they do not need to hedge as much money to cover the risk.

Essentially, these policies have a "floating" Surrender Value. It goes up and down based on the current interest rates in the bond markets. If current rates put the carrier at a disadvantage, they adjust the Surrender Value to compensate.. meaning they decrease it. If rates put them at an advantage, they increase the Surrender Value.


The insurance carrier buys bonds to cover the guarantees in your contract. If you surrender early, they have to sell those bonds to make you whole. But a bond is not worth the same when interest rates change. Suddenly that bond is worth either more or less, depending on which way rates move.

Generally speaking, higher rates mean a lower Surrender Value due to MVAs. Lower rates mean a higher Surrender Value (ive seen contracts actually have a gain over the index gain because of MVAs).

If you dont plan on taking the money out prior to the end of the surrender period. MVAs are not an issue. And buying an annuity with an MVA likely means you are getting a slightly better rate than many competing annuities with no MVA.

Also, your online account and annual statements will show your Surrender Value inclusive of any MVA adjustments. So you can find out yourself where its at.

 

[LostDollar]

I believe American National is A rated & offers a 3 YR MYGA annuity down to $5k. 3 yr rate is like 1.75% I think

Since "It's all Ball Bearings", I could just invest in The Timken Company's DRIP plan. Estimated 1.6% plus or minus.

 

[scagnt83]

Since "It's all Ball Bearings", I could just invest in The Timken Company's DRIP plan. Estimated 1.6% plus or minus.

Wait a week and just buy the market dip.

 

[goillini52]

You're going to lose some carriers at that amount but I would not recommend Nassau RE (Phoenix) just based on ratings.

ACL is a better bet (but I don't offer that either due to ratings...still higher than Nassau though.)

What about Oxford? You mentioned Sagicor in another thread. How do you rate Oxford, Sagicor and Oceanview against each other?

 

[Tahoe Ray]

What about Oxford? You mentioned Sagicor in another thread. How do you rate Oxford, Sagicor and Oceanview against each other?

My biggest complaint with Oxford is the huge comp haircut on their best rates (4yr and 6 yr). You can find similar rates and get paid full comp.

Other than that, they're fine and I am contracted w/ them (at least I was at one time, not sure anymore).