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Re: Equity Indexed Annuities: Are they the real deal or junk pro
x2...and he is a wonk, too!
What a dick!
x2...and he is a wonk, too!
Equity Indexed Annuities: Are they the real deal or junk products?
- Thread starter NHB_MMA
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Re: Equity Indexed Annuities: Are they the real deal or junk pro
Wash your winkie!
Wash your winkie!
- 337
Re: Equity Indexed Annuities: Are they the real deal or junk pro
I would love someone to prove a 4-6% return on an actual IA!!! All I seem to hear is hypotheticals with these products. My take is the cards are stacked in favor of the house with these products.
I would love someone to prove a 4-6% return on an actual IA!!! All I seem to hear is hypotheticals with these products. My take is the cards are stacked in favor of the house with these products.
Re: Equity Indexed Annuities: Are they the real deal or junk pro
KJ - I've seen returns in that range for some EIAs issued 10 years ago. Some of them had years of double digit interest crediting (or close to it), and then didn't lose anything in the market meltdown years.
The concept of EIAs is a good one. The selling practices are sometimes shady, and some of the insurers certainly have some B.S. products with ridiculous commissions and too much "smoke and mirrors," but that doesn't mean the product in general is bad.
Like everything there are good contracts and bad contracts. And like all tools, there is a right time to use them, and a wrong time.
KJ - I've seen returns in that range for some EIAs issued 10 years ago. Some of them had years of double digit interest crediting (or close to it), and then didn't lose anything in the market meltdown years.
The concept of EIAs is a good one. The selling practices are sometimes shady, and some of the insurers certainly have some B.S. products with ridiculous commissions and too much "smoke and mirrors," but that doesn't mean the product in general is bad.
Like everything there are good contracts and bad contracts. And like all tools, there is a right time to use them, and a wrong time.
Re: Equity Indexed Annuities: Are they the real deal or junk pro
There is evidence aplenty to show that return. I have a colleague who has gotten clients permission to share their statements with his prospective new clients. He shows them statements from the past 5 years...has plenty that are double digit returns...best is 25 and that does not include any bonuses. One guy put in 100k, did get a bonus, a 20 percent return and locked in 130k end of first policy year.
Heck, my personal indexed annuity I took out 4 years ago had a 15 percent gain 2009-10...also no bonus in there.
There is evidence aplenty to show that return. I have a colleague who has gotten clients permission to share their statements with his prospective new clients. He shows them statements from the past 5 years...has plenty that are double digit returns...best is 25 and that does not include any bonuses. One guy put in 100k, did get a bonus, a 20 percent return and locked in 130k end of first policy year.
Heck, my personal indexed annuity I took out 4 years ago had a 15 percent gain 2009-10...also no bonus in there.
- 10,708
Re: Equity Indexed Annuities: Are they the real deal or junk pro
In 08' I dealt with a ten year old Allianz IA that had a blend of Yp2p, MA, Mp2p, and some in the fixed account.
It had an annualized gain of 8%.
I put them in an IA w/ LFG that has 2year crediting at 14%. They have averaged around 6.5% over the past four years. They had a 14% gain and a 12% gain.
They did not beat the S&P over the past 4 years but they did beat CDs, Treasuries, many mutual funds and many conservative bond options.
I have permission to use their past returns with clients.
Actually, I have permission to use another clients along with my father and grandmother.
All of them have seen very reliable and steady returns using IAs, and have well outpaced inflation.
In 08' I dealt with a ten year old Allianz IA that had a blend of Yp2p, MA, Mp2p, and some in the fixed account.
It had an annualized gain of 8%.
I put them in an IA w/ LFG that has 2year crediting at 14%. They have averaged around 6.5% over the past four years. They had a 14% gain and a 12% gain.
They did not beat the S&P over the past 4 years but they did beat CDs, Treasuries, many mutual funds and many conservative bond options.
I have permission to use their past returns with clients.
Actually, I have permission to use another clients along with my father and grandmother.
All of them have seen very reliable and steady returns using IAs, and have well outpaced inflation.
- 2,455
Re: Equity Indexed Annuities: Are they the real deal or junk pro
How big an email account do you have? I could send you several. I have a couple that have the names and account numbers as well as other proprietary info blacked out for privacy. Send me your cell number and I'll snap a photo or two of some statements to send you. Otherwise I have to PDF them which is ok but I'll need your email.
While we are at it, you have anything you could send me that has say a 3 or 4 percent return with little risk and all the features and benefits an annuity provides to the right individual? What do you have to offer that I could see? I'm not even asking for 4 to 6 percent, just 3 or 4 percent.
How big an email account do you have? I could send you several. I have a couple that have the names and account numbers as well as other proprietary info blacked out for privacy. Send me your cell number and I'll snap a photo or two of some statements to send you. Otherwise I have to PDF them which is ok but I'll need your email.
While we are at it, you have anything you could send me that has say a 3 or 4 percent return with little risk and all the features and benefits an annuity provides to the right individual? What do you have to offer that I could see? I'm not even asking for 4 to 6 percent, just 3 or 4 percent.
- 10,708
Re: Equity Indexed Annuities: Are they the real deal or junk pro
And what do you hear with VAs or MFs?
IAs have historical returns just like anything else.
They also have hypothetical future returns based on current caps and past market performance.... just like a MF has hypothetical future returns based on past performance and current market conditions...
The problem with marketing past IA returns is that each contract will have different results than another because of allocations and when the contract date starts (ie: market timing).
The same can be said for investing in a MF or VA.
The reason these two can market past performance is that they are required by the SEC to disclose yearly performance in their prospectus.
But if you read the fine print it says that your actual performance will vary due to the timing of your investment.
Market performance is measured from Jan1 to Jan1.
In between is up and down. People make more, people make less, people make the stated annual return; it just depends on their entrance and exit into the fund.
IAs are constantly adjusting new issue cap rates. This makes it hard for the company to market a historical return based on any one particular cap. It would be nice for them to find an "average" yearly cap for each year and post how it compared to the index... maybe we will get there eventually.
But there is plenty of hard evidence to show true historical IA returns.
The real ambiguity with IAs is not how the current cap will perform with a given market.
Its what the renewal cap will be.
But renewal caps are often very competitive. ICs have every reason to keep them competitive with all the bonus products around.
Right now IA caps are at a historical low (b/c of interest rates and a rocky market). The main factor (rates) really cant get much lower. So there isnt much farther to drop currently. So current cap projections dont really have the opportunity to be much lower with many companies.
And what do you hear with VAs or MFs?
IAs have historical returns just like anything else.
They also have hypothetical future returns based on current caps and past market performance.... just like a MF has hypothetical future returns based on past performance and current market conditions...
The problem with marketing past IA returns is that each contract will have different results than another because of allocations and when the contract date starts (ie: market timing).
The same can be said for investing in a MF or VA.
The reason these two can market past performance is that they are required by the SEC to disclose yearly performance in their prospectus.
But if you read the fine print it says that your actual performance will vary due to the timing of your investment.
Market performance is measured from Jan1 to Jan1.
In between is up and down. People make more, people make less, people make the stated annual return; it just depends on their entrance and exit into the fund.
IAs are constantly adjusting new issue cap rates. This makes it hard for the company to market a historical return based on any one particular cap. It would be nice for them to find an "average" yearly cap for each year and post how it compared to the index... maybe we will get there eventually.
But there is plenty of hard evidence to show true historical IA returns.
The real ambiguity with IAs is not how the current cap will perform with a given market.
Its what the renewal cap will be.
But renewal caps are often very competitive. ICs have every reason to keep them competitive with all the bonus products around.
Right now IA caps are at a historical low (b/c of interest rates and a rocky market). The main factor (rates) really cant get much lower. So there isnt much farther to drop currently. So current cap projections dont really have the opportunity to be much lower with many companies.
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- 1,926
Re: Equity Indexed Annuities: Are they the real deal or junk pro
When you can get 3.3% guarantees for 10 years in a FA, hard to get excited about potential FIA returns.
When you can get 3.3% guarantees for 10 years in a FA, hard to get excited about potential FIA returns.
Re: Equity Indexed Annuities: Are they the real deal or junk pro
Who's guaranteeing 3.3% for 10 years?
