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Best FIA's for Cash Growth
- Thread starter Indy007
- Start date
- 10,704
wouldn't the 222 be best even if the client want income before year 10? I mean, with no rider fee AND a 1% better spread, that's 2% a year difference. With that difference the client could start income in year 5 or whatever with free withdrawals and kick in GMWB in year 11. I like no fees; beats 360 I bet in overall performance either way (income now or later or never)
explain. If the 222 has a better spread, 150% int credit bonus, a GMWB with potential increases, and no fee, how is that not the better accumulation play? No, the PIV is not walk away, (however it is a death Ben over 5 yrs), but we can't know performance in advance. We CAN know the fees in advance.
You are starting to mix up pure accumulation vs. income rider accumulation.
For Income the 360, seems to usually win.
Even against the 222 with the 15% Bonus on the Rider Value & 1% less spread.
This is because of MUCH MUCH higher Payout Rates on the 360.
The 222 has very low Payout Rates compared to the 360.
This is why for INCOME, the 360 usually wins.
For pure accumulation, the 222 has a Spread thats 1% lower.... BUT... the 360 increases the yearly returns by 50%... BUT... the 360 also has a 1.05% rider fee.
10% Return
222= 10%-1.9%= 8.1%
360= 10%-2.9%(spread)=7.1%+(7.1% x 50%)=10.65%-1.05%(rider fee)= 9.60%
That 50% increase that you are leaving out of your assumptions makes a huge difference.
Now obviously we can get into semantics of 0% years turning negative with the 360 because of the rider fee, and how that will all shake out. But based on positive returns the 360 seems to win.
But for income the 360 is very strong. The payout rates are close to spia rates.
- 148
And that is how some clients look at it so someone would sell you the 222. When I run hypotheticals they are apples to apples with the amount being credited. Yes the PIV value of the 222 is going to be higher than the 360s AV because of the 15% bonus and no fee and you're right about it being a death benefit. That's why I outline it as a good legacy play on that other thread. As I said earlier, if a client isn't bearish on the market and is thinking they'll get some type of index return (not an average 7% or whatever ridiculous number some people say it returns) the fact that the 360 gets the bonus credit to the AV where the 222 only gets the bonus credit to the PIV makes the difference as a walk away.of course. My point is that all hypos are just hypos. It's hypothetical performance but guaranteed fees
Believe me, I love the 222. I'm simply explaining why so many write the 360. There's a fit for all 5 of the products people and they're all great in there own way.
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This.You are starting to mix up pure accumulation vs. income rider accumulation. For Income the 360, seems to usually win. Even against the 222 with the 15% Bonus on the Rider Value & 1% less spread. This is because of MUCH MUCH higher Payout Rates on the 360. The 222 has very low Payout Rates compared to the 360. This is why for INCOME, the 360 usually wins. For pure accumulation, the 222 has a Spread thats 1% lower.... BUT... the 360 increases the yearly returns by 50%... BUT... the 360 also has a 1.05% rider fee. 10% Return 222= 10%-1.9%= 8.1% 360= 10%-2.9%(spread)=7.1%+(7.1% x 50%)=10.65%-1.05%(rider fee)= 9.60% That 50% increase that you are leaving out of your assumptions makes a huge difference. Now obviously we can get into semantics of 0% years turning negative with the 360 because of the rider fee, and how that will all shake out. But based on positive returns the 360 seems to win. But for income the 360 is very strong. The payout rates are close to spia rates.
Now where the 222 at
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This.You are starting to mix up pure accumulation vs. income rider accumulation. For Income the 360, seems to usually win. Even against the 222 with the 15% Bonus on the Rider Value & 1% less spread. This is because of MUCH MUCH higher Payout Rates on the 360. The 222 has very low Payout Rates compared to the 360. This is why for INCOME, the 360 usually wins. For pure accumulation, the 222 has a Spread thats 1% lower.... BUT... the 360 increases the yearly returns by 50%... BUT... the 360 also has a 1.05% rider fee. 10% Return 222= 10%-1.9%= 8.1% 360= 10%-2.9%(spread)=7.1%+(7.1% x 50%)=10.65%-1.05%(rider fee)= 9.60% That 50% increase that you are leaving out of your assumptions makes a huge difference. Now obviously we can get into semantics of 0% years turning negative with the 360 because of the rider fee, and how that will all shake out. But based on positive returns the 360 seems to win. But for income the 360 is very strong. The payout rates are close to spia rates.
Now where the 222 starts to become strong again is farther into the income phase. Since Allianz products have a great increasing income option that gives clients a pay raise by the same percentage credited from the index, the 222 will start to catch up to the 360s payout down the road. The 222 continues to get the 150% crediting percentage even during the income phase where as the 360 just gets 100%. Again, depending on the client and their longevity in their family and how long they expect to live. 222 may start to make sense for further down the road.
ok, I agree with all this...the income play 360 and the maybe income no fee play 222. For me, I love the 222 cuz I like a zero year to be the worst case. But of course everyone's different. I am not bullish on stocks or bonds in the next 3 years. After that maybe.And that is how some clients look at it so someone would sell you the 222. When I run hypotheticals they are apples to apples with the amount being credited. Yes the PIV value of the 222 is going to be higher than the 360s AV because of the 15% bonus and no fee and you're right about it being a death benefit. That's why I outline it as a good legacy play on that other thread. As I said earlier, if a client isn't bearish on the market and is thinking they'll get some type of index return (not an average 7% or whatever ridiculous number some people say it returns) the fact that the 360 gets the bonus credit to the AV where the 222 only gets the bonus credit to the PIV makes the difference as a walk away. Believe me, I love the 222. I'm simply explaining why so many write the 360. There's a fit for all 5 of the products people and they're all great in there own way. ---------- This. Now where the 222 at ---------- This. Now where the 222 starts to become strong again is farther into the income phase. Since Allianz products have a great increasing income option that gives clients a pay raise by the same percentage credited from the index, the 222 will start to catch up to the 360s payout down the road. The 222 continues to get the 150% crediting percentage even during the income phase where as the 360 just gets 100%. Again, depending on the client and their longevity in their family and how long they expect to live. 222 may start to make sense for further down the road.
producernumber1
New Member
- 3
First of all, a 4% cap is lousy. If as an agent you think that is good "accumulation" potential, you should be selling something else. 4% would be OK if the client WANTED an income rider and their main objective was INCOME. We are talking accumulation here, Midland National has some of the best accumulation products in the industry. The MNL Select 14 (also available in 8 and 10 year products has killer caps both annual pt to pt and monthly pt to pt and even a fixed rate around 2.95%, which are all changing 4/29 anyhow. Regardless, they also have the Endeavor 8 and 12 with or without a bonus. Bonus product will have lower caps. I use the Select for folks coming to me with $2, 3, 5,000 for IRA startups, etc. They take as little as $2K to open and can add to these without a rider for 5-7 years. Another agent talked about the 222 from Allianz, a solid product, but be careful to sell that off the 24 yr hypothetical illustration. I like to print the optional 10 year repeating illustration or have a client pick whatever 10 years out of the 24 yr they want and we add that up. I would rather show them a smaller number and over deliver down the road. You will have a happier client in the long run. Some agents will tell clients what they want to hear. Had one client come in with an American Equity they were telling me about. The agent sold them the 8% rider knowing they were going to turn on income in 1 year, whats the point? He was selling them on the 8% rate. They were under the assumption they were getting 8% as a rate, period. It's guys like this that make us all look bad. Full disclosure, full disclosure!
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You run 222 vs 360, 222 cleans up. First off, if you take withdrawals anytime in the 1st 10 years versus "turning on income" you give your clients options. How many clients have you had pass away in the first 10 years of a contract? Plus, I tell them, take $5,000 the first year, see how much of that you really use. You may only use $4,000. You can fluctuate your withdrawals to find your happy medium in the first few years. Also, after the 10 years on the 222, your income will step up whatever the index plus the 50% bonus. Example, income guarantee at year 11 = $5,000. The index performs at 6%, the PIV value credits 9%, your income now goes up 9% that year. On the 360, you don't have that option, the increasing income starts lower and steps up each year. You can allow your clients to take a decent income off the 222 through lifetime withdrawals and still allow them to pass on their principal, possibly more when they die. You won't pass any money on with the 360 with the fee, lower caps, etc. Allianz pushes the 360 because it makes them more money. I have had some of Allianz's top people on the phone and they studder when I point out the strength of the 222. Sell it while you can, it won't offer these advantages forever.
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You run 222 vs 360, 222 cleans up. First off, if you take withdrawals anytime in the 1st 10 years versus "turning on income" you give your clients options. How many clients have you had pass away in the first 10 years of a contract? Plus, I tell them, take $5,000 the first year, see how much of that you really use. You may only use $4,000. You can fluctuate your withdrawals to find your happy medium in the first few years. Also, after the 10 years on the 222, your income will step up whatever the index plus the 50% bonus. Example, income guarantee at year 11 = $5,000. The index performs at 6%, the PIV value credits 9%, your income now goes up 9% that year. On the 360, you don't have that option, the increasing income starts lower and steps up each year. You can allow your clients to take a decent income off the 222 through lifetime withdrawals and still allow them to pass on their principal, possibly more when they die. You won't pass any money on with the 360 with the fee, lower caps, etc. Allianz pushes the 360 because it makes them more money. I have had some of Allianz's top people on the phone and they studder when I point out the strength of the 222. Sell it while you can, it won't offer these advantages forever.
----------
You run 222 vs 360, 222 cleans up. First off, if you take withdrawals anytime in the 1st 10 years versus "turning on income" you give your clients options. How many clients have you had pass away in the first 10 years of a contract? Plus, I tell them, take $5,000 the first year, see how much of that you really use. You may only use $4,000. You can fluctuate your withdrawals to find your happy medium in the first few years. Also, after the 10 years on the 222, your income will step up whatever the index plus the 50% bonus. Example, income guarantee at year 11 = $5,000. The index performs at 6%, the PIV value credits 9%, your income now goes up 9% that year. On the 360, you don't have that option, the increasing income starts lower and steps up each year. You can allow your clients to take a decent income off the 222 through lifetime withdrawals and still allow them to pass on their principal, possibly more when they die. You won't pass any money on with the 360 with the fee, lower caps, etc. Allianz pushes the 360 because it makes them more money. I have had some of Allianz's top people on the phone and they studder when I point out the strength of the 222. Sell it while you can, it won't offer these advantages forever.[/QUOTE]
You wont pass on any money with the 360 because of the higher payout percentage. The accumulation value gets depleted faster because the income amount is higher and the client is in the company pocket much much faster. This is a good thing. And if you want to talk about having options, the 360 applies the 50% bonus to the accumulation value as well.
You run 222 vs 360, 222 cleans up. First off, if you take withdrawals anytime in the 1st 10 years versus "turning on income" you give your clients options. How many clients have you had pass away in the first 10 years of a contract? Plus, I tell them, take $5,000 the first year, see how much of that you really use. You may only use $4,000. You can fluctuate your withdrawals to find your happy medium in the first few years. Also, after the 10 years on the 222, your income will step up whatever the index plus the 50% bonus. Example, income guarantee at year 11 = $5,000. The index performs at 6%, the PIV value credits 9%, your income now goes up 9% that year. On the 360, you don't have that option, the increasing income starts lower and steps up each year. You can allow your clients to take a decent income off the 222 through lifetime withdrawals and still allow them to pass on their principal, possibly more when they die. You won't pass any money on with the 360 with the fee, lower caps, etc. Allianz pushes the 360 because it makes them more money. I have had some of Allianz's top people on the phone and they studder when I point out the strength of the 222. Sell it while you can, it won't offer these advantages forever.[/QUOTE]
You wont pass on any money with the 360 because of the higher payout percentage. The accumulation value gets depleted faster because the income amount is higher and the client is in the company pocket much much faster. This is a good thing. And if you want to talk about having options, the 360 applies the 50% bonus to the accumulation value as well.
- 148
First of all, a 4% cap is lousy. If as an agent you think that is good "accumulation" potential, you should be selling something else. 4% would be OK if the client WANTED an income rider and their main objective was INCOME. We are talking accumulation here, Midland National has some of the best accumulation products in the industry. The MNL Select 14 (also available in 8 and 10 year products has killer caps both annual pt to pt and monthly pt to pt and even a fixed rate around 2.95%, which are all changing 4/29 anyhow. Regardless, they also have the Endeavor 8 and 12 with or without a bonus. Bonus product will have lower caps. I use the Select for folks coming to me with $2, 3, 5,000 for IRA startups, etc. They take as little as $2K to open and can add to these without a rider for 5-7 years. Another agent talked about the 222 from Allianz, a solid product, but be careful to sell that off the 24 yr hypothetical illustration. I like to print the optional 10 year repeating illustration or have a client pick whatever 10 years out of the 24 yr they want and we add that up. I would rather show them a smaller number and over deliver down the road. You will have a happier client in the long run. Some agents will tell clients what they want to hear. Had one client come in with an American Equity they were telling me about. The agent sold them the 8% rider knowing they were going to turn on income in 1 year, whats the point? He was selling them on the 8% rate. They were under the assumption they were getting 8% as a rate, period. It's guys like this that make us all look bad. Full disclosure, full disclosure!
----------
You run 222 vs 360, 222 cleans up. First off, if you take withdrawals anytime in the 1st 10 years versus "turning on income" you give your clients options. How many clients have you had pass away in the first 10 years of a contract? Plus, I tell them, take $5,000 the first year, see how much of that you really use. You may only use $4,000. You can fluctuate your withdrawals to find your happy medium in the first few years. Also, after the 10 years on the 222, your income will step up whatever the index plus the 50% bonus. Example, income guarantee at year 11 = $5,000. The index performs at 6%, the PIV value credits 9%, your income now goes up 9% that year. On the 360, you don't have that option, the increasing income starts lower and steps up each year. You can allow your clients to take a decent income off the 222 through lifetime withdrawals and still allow them to pass on their principal, possibly more when they die. You won't pass any money on with the 360 with the fee, lower caps, etc. Allianz pushes the 360 because it makes them more money. I have had some of Allianz's top people on the phone and they studder when I point out the strength of the 222. Sell it while you can, it won't offer these advantages forever.
I would have to disagree with your opinion that the 360 doesn't have the same flexibility as the 222. As I previously outlined, there are definitely times where the 222 is the choice. This conversation started off as an accumulation discussion. I think it has been pretty clearly laid out as to why the 360 will beat the 222 for an accumulation play. Also, as an income play if income is needed probably for at least the first 5 years of a contract. Regardless of free withdrawls from the 222. Who was mentioning 4% caps as beiong good?
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You run 222 vs 360, 222 cleans up. First off, if you take withdrawals anytime in the 1st 10 years versus "turning on income" you give your clients options. How many clients have you had pass away in the first 10 years of a contract? Plus, I tell them, take $5,000 the first year, see how much of that you really use. You may only use $4,000. You can fluctuate your withdrawals to find your happy medium in the first few years. Also, after the 10 years on the 222, your income will step up whatever the index plus the 50% bonus. Example, income guarantee at year 11 = $5,000. The index performs at 6%, the PIV value credits 9%, your income now goes up 9% that year. On the 360, you don't have that option, the increasing income starts lower and steps up each year. You can allow your clients to take a decent income off the 222 through lifetime withdrawals and still allow them to pass on their principal, possibly more when they die. You won't pass any money on with the 360 with the fee, lower caps, etc. Allianz pushes the 360 because it makes them more money. I have had some of Allianz's top people on the phone and they studder when I point out the strength of the 222. Sell it while you can, it won't offer these advantages forever.
You wont pass on any money with the 360 because of the higher payout percentage. The accumulation value gets depleted faster because the income amount is higher and the client is in the company pocket much much faster. This is a good thing. And if you want to talk about having options, the 360 applies the 50% bonus to the accumulation value as well.[/QUOTE]
This
You wont pass on any money with the 360 because of the higher payout percentage. The accumulation value gets depleted faster because the income amount is higher and the client is in the company pocket much much faster. This is a good thing. And if you want to talk about having options, the 360 applies the 50% bonus to the accumulation value as well.[/QUOTE] I wonder if they make more on the 360. They payout princ faster - it may be that by retaining prem longer, they make more via investments even without the fee---------- You run 222 vs 360, 222 cleans up. First off, if you take withdrawals anytime in the 1st 10 years versus "turning on income" you give your clients options. How many clients have you had pass away in the first 10 years of a contract? Plus, I tell them, take $5,000 the first year, see how much of that you really use. You may only use $4,000. You can fluctuate your withdrawals to find your happy medium in the first few years. Also, after the 10 years on the 222, your income will step up whatever the index plus the 50% bonus. Example, income guarantee at year 11 = $5,000. The index performs at 6%, the PIV value credits 9%, your income now goes up 9% that year. On the 360, you don't have that option, the increasing income starts lower and steps up each year. You can allow your clients to take a decent income off the 222 through lifetime withdrawals and still allow them to pass on their principal, possibly more when they die. You won't pass any money on with the 360 with the fee, lower caps, etc. Allianz pushes the 360 because it makes them more money. I have had some of Allianz's top people on the phone and they studder when I point out the strength of the 222. Sell it while you can, it won't offer these advantages forever.
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] I wonder if they make more on the 360. They payout princ faster - it may be that by retaining prem longer, they make more via investments even without the fee[/QUOTE]
- 10,704
First of all, a 4% cap is lousy. If as an agent you think that is good "accumulation" potential, you should be selling something else. 4% would be OK if the client WANTED an income rider and their main objective was INCOME. We are talking accumulation here, Midland National has some of the best accumulation products in the industry. The MNL Select 14 (also available in 8 and 10 year products has killer caps both annual pt to pt and monthly pt to pt and even a fixed rate around 2.95%, which are all changing 4/29 anyhow. Regardless, they also have the Endeavor 8 and 12 with or without a bonus. Bonus product will have lower caps. I use the Select for folks coming to me with $2, 3, 5,000 for IRA startups, etc. They take as little as $2K to open and can add to these without a rider for 5-7 years. Another agent talked about the 222 from Allianz, a solid product, but be careful to sell that off the 24 yr hypothetical illustration. I like to print the optional 10 year repeating illustration or have a client pick whatever 10 years out of the 24 yr they want and we add that up. I would rather show them a smaller number and over deliver down the road. You will have a happier client in the long run. Some agents will tell clients what they want to hear. Had one client come in with an American Equity they were telling me about. The agent sold them the 8% rider knowing they were going to turn on income in 1 year, whats the point? He was selling them on the 8% rate. They were under the assumption they were getting 8% as a rate, period. It's guys like this that make us all look bad. Full disclosure, full disclosure!
-------.
Midland just announced today that most rates will be reduced in the coming weeks. It will be interesting to see how deep of a cut they take, they certainly have the best Capped options on the market.
National Western Life has the best accumulation options at the moment imo. You cant beat a 95% PR, even using monthly averaging it still beats every other product out there in historical comparisons.
A friendly piece of forum advice; if you want people to read your posts you need to use paragraphs and break up the huge long continuous strand of thoughts.
- 148
Midland just announced today that most rates will be reduced in the coming weeks. It will be interesting to see how deep of a cut they take, they certainly have the best Capped options on the market. National Western Life has the best accumulation options at the moment imo. You cant beat a 95% PR, even using monthly averaging it still beats every other product out there in historical comparisons. A friendly piece of forum advice; if you want people to read your posts you need to use paragraphs and break up the huge long continuous strand of thoughts.
Hey is there also a spread on that National Western product?
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Hey is there also a spread on that National Western product?
Never mind. I answered my own question. 45bps spread or "asset fee" right? Contractually a little scary though with a guarantee minimum PR of 50% and a max "asset fee of 6%"
Two moving parts......
