Best Indexed Annuity?

[InsureGuy5]

With the myriad of indexed annuities on the market today, my question to fellow agents is:

If you were going to purchase an indexed annuity for yourself, who would you go with and why? Let's say 50k in a 5-10 year annuity.

 

[Charpress]

With the myriad of indexed annuities on the market today, my question to fellow agents is:

If you were going to purchase an indexed annuity for yourself, who would you go with and why? Let's say 50k in a 5-10 year annuity.

What I actually bought for my wife was an Allianz MasterDex 5 plus. With the income rider, it guarantees not only growth with a minimum guarantee, but the income itself is indexed once you start taking income. A very attractive product, on the whole.

 

[insuranceexec]

I personally own several.

RBC dow 10; for its strong high guaranteed caps and NO spreads.

SunLife; which had the strongest accumulation side several years back, and is extremely liquid.

And last but certainly not least is the Master Dex 7 year annuity from Allianz. I hope this helps........

 

[CFP83]

All good feedback so far.

I guess it all depends what your trying to accomplish. The majority indexed annuities I've sold are clients looking for tax-deffered accumulation with as much upside potential as possible. I like the annual pt-to-pt stuff and use ING Envoy 9 a good deal. It's not the highest payouts in the industry, but if the client has the above needs, from what I've seen it's one of the best options out there (and I've yet to see a product that has the highest payouts and is also the "best option for the client). I never got the chance to use RBC's Dow 10 before the company discontinued it last month, it looks like that was a very good product in its day. Allianz's caps seem to have fallen a bit as of late, probably since Aviva has all but backed out of the market they now feel they don't have to give away the farm to compete.

To answer your question, if it were me buying one of these for myself I would be looking for the highest market partipation-especially where we are currently with Dow 8500. That could be accomplished with participation rates, caps, spreads whatever....again I would just want the most market exposer as possible. After that, the next thing I'm looking at is the companies financial strength rating. We all know that indexed annuities have many moving parts, I don't want to have one of these with an insurer on shaky ground....to the contrary I would want to buy the one with the most solidly rated company I could find.

When it comes to an exhaustive list of all the companies you may want to look at I would suggest you pm insuranceexec

 

[dgoldenz]

The Jackson National AscenderPlus Select with monthly sum option is a good one for those who want to guarantee the principle while still allowing for a nice return in a good market year. Right now the caps on a 10-year with $100k+ investment are 2.35% per month, so you could potentially get a 28.2% return in a single year if the market went up every month. That's not a very likely scenario, but the potential is there. However, if the market has one month where it drops 28%, you just lost any potential gain for the year. A little more risk with a little more reward, but still has the underlying guarantees. We don't sell a ton of annuities, but I'd be pretty careful of selling annuities from A or A- rated carriers. I'd rather not test out that E&O insurance in the future if possible.

 

[insuranceexec]

The Jackson National AscenderPlus Select with monthly sum option is a good one for those who want to guarantee the principle while still allowing for a nice return in a good market year. Right now the caps on a 10-year with $100k+ investment are 2.35% per month, so you could potentially get a 28.2% return in a single year if the market went up every month. That's not a very likely scenario, but the potential is there. However, if the market has one month where it drops 28%, you just lost any potential gain for the year. A little more risk with a little more reward, but still has the underlying guarantees. We don't sell a ton of annuities, but I'd be pretty careful of selling annuities from A or A- rated carriers. I'd rather not test out that E&O insurance in the future if possible.

Are you insinuating that by writing an "A", or even an "A-", rated carrier that it would constitute an E&O claim?

I am curious; on what grounds?

 

[InsureGuy5]

Thanks for the feedback everyone. I was using the Aviva products primarily until they took a breather. I am now leaning toward Allianz. They were out of favor for sometime based on their payouts at passing clause, but have since become more client friendly in my opinion.

I too am curious about the A/A- rated debate. Jackson has a good rating, but their indexing methods are not that attractive. What makes you think an A insurer is going to cause anyone problems?

 

[dgoldenz]

Are you insinuating that by writing an "A", or even an "A-", rated carrier that it would constitute an E&O claim?

I am curious; on what grounds?

Being an A or A- carrier doesn't constitute an E&O claim on its own.....but if a company goes under and the client gets screwed, guess who they're coming back to for answers. Whether you did your job and due dilligence or not, they can still make a complaint, attempt to sue, and you're stuck holding the bag trying to get your E&O to fight it. There's plenty of A+ carriers out there that the client could come back and say "why didn't you put me in this one instead?" Again, whether right or wrong makes no difference - it's all the client's perception of the situation and when someone tells you that you can't access your $250k, that perception may get a bit distorted.

 

[Charpress]

I think if A or A- companies go under, and no companies are able to purchase their books of business, and no taxpayer bailout is forthcoming, then we are all pretty much screwed. At that point, no insurance product and probably no other investment will be worth as much as a box of 9mm slugs.

 

[insuranceexec]

Being an A or A- carrier doesn't constitute an E&O claim on its own.....but if a company goes under and the client gets screwed, guess who they're coming back to for answers. Whether you did your job and due dilligence or not, they can still make a complaint, attempt to sue, and you're stuck holding the bag trying to get your E&O to fight it. There's plenty of A+ carriers out there that the client could come back and say "why didn't you put me in this one instead?" Again, whether right or wrong makes no difference - it's all the client's perception of the situation and when someone tells you that you can't access your $250k, that perception may get a bit distorted.

The same argument could be made for an A+ company as well! Must we re-hash AIG?

Every agent that sells annuities should be doing a FNA to validate the reason for the offering. Remember E&O means "Errors & Omissions"

Errors and Omissions Insurance

A Professional liability claim must allege negligence in either the performance of or failure to perform Professional Services. Errors and omissions insurance policies have a specific limit of liability and usually include both legal costs and damage awards in a single limit. E&O insurance does not cover intentional, fraudulent or illegal activities or in most policies, punitive damages. (Taken from the above posted link)


Please explain what the claim would be?

Where is the negligence?