Equity Indexed Annuities: Are they the real deal or junk products?

[scagnt83]

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.

I would disagree.

Locking yourself into a fixed 3.3% does not allow you to benefit once the fed increases rates (it will happen in the next 10 years).

But with the IA, caps will most likely go up when rates do.


Locking in a long term low interest rate is not a smart move for most in this economic climate (imo).

And with a 10 year commitment I could get a 6% yearly cap with Midland.

Hell, I can get 4% caps on Great Americans 6 year product... & it has a bailout cap of 3.5%....

I get a lot more excited about that than 3.3% for 10 years...
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Who's guaranteeing 3.3% for 10 years?

NA.

Sentinel is offering 3.8% for 10 years, but thy are B+++ rated.

 

[tins]

Re: Equity Indexed Annuities: Are they the real deal or junk pro

Sentinel is offering 3.8% for 10 years, but thy are B+++ rated.

Don't mean to butt in to y'alls conversation, as I know little on annuities. But I did see that Alco offers 4.15% fixed for 10 years. (Don't know what their rating is.)


EDIT: Was told this rate by an IMO I use for a couple companies. Can't find anything on google. Will call him Monday and try to find out more info.

 

[senior-advisor-indiana]

Re: Equity Indexed Annuities: Are they the real deal or junk pro

I need to find some new annuity marketers I guess. I had a client last week that is in a FA getting 2.5% with a 3% surrender. She asked if I could get her a better rate and neither of the 2 IMO's I talked to had anything over 3%. I believe the highest AP2P cap was 3-4% which is ridiculous.

 

[scagnt83]

Re: Equity Indexed Annuities: Are they the real deal or junk pro

I need to find some new annuity marketers I guess. I had a client last week that is in a FA getting 2.5% with a 3% surrender. She asked if I could get her a better rate and neither of the 2 IMO's I talked to had anything over 3%. I believe the highest AP2P cap was 3-4% which is ridiculous.

Yeah, I would look for a new one or two...

Highest Ap2p I know of is 7% w/ midland, but its a 14 year product... they have 6% on their 10 year.

 

[bluemarlin08]

Re: Equity Indexed Annuities: Are they the real deal or junk pro

But with the IA, caps will most likely go up when rates do.

Have you ever seen a company increase caps on existing policies?

 

[iceco1d]

Re: Equity Indexed Annuities: Are they the real deal or junk pro

Yes. Great American / AILIC, has had increases many times. I'm sure plenty of other companies have too.

 

[scagnt83]

Re: Equity Indexed Annuities: Are they the real deal or junk pro

Have you ever seen a company increase caps on existing policies?

Yes. Plenty of companies have.
Over the past year and a half, of course not.

But they would be stupid not to in an increasing rate environment...

"Mr. Client, you have a 5% surrender now with caps at half the current rate; I have a 10% bonus product with caps twice as high as your current policy. Wouldnt it make sense to lock-in a 5% gain plus higher earning potential??"



I have also seen them increase caps & rates to retain business... this is nice for clients I guess, but sucks for agents.


Remember that the Fed is keeping rates on hold until the end of 2014. But once rates rise so will current issue caps. And most likely so will renewal caps.

Its the same principle as a portfolio rate annuity product. I sold some back at NYL and the rates went up and down with market conditions almost like clockwork.

I wouldnt expect caps to skyrocket.. but they should rise some.

 

[iceco1d]

Re: Equity Indexed Annuities: Are they the real deal or junk pro

Why does it suck for the agent? Take the trailing payout options. You'll be happy you did 5 years from now.

 

[nathan.lee]

Re: Equity Indexed Annuities: Are they the real deal or junk pro

Yeah, I would look for a new one or two...

Highest Ap2p I know of is 7% w/ midland, but its a 14 year product... they have 6% on their 10 year.

Athene Annuity(Old RBC/Liberty Life) has an Ap2p at 7.25% and a fixed account 3% plus a first year rate bonus of 1% on their 10 yr. product.

Downside of course is that they are B++ A.M. Best.

 

[scagnt83]

Re: Equity Indexed Annuities: Are they the real deal or junk pro

Why does it suck for the agent? Take the trailing payout options. You'll be happy you did 5 years from now.

It depends which side of the fence you are on... if its your client and your business retained its great; if your the soliciting agent who looses a sale then it sucks.
If its an existing client its a win/win.