RetirementHoriz
New Member
- 7
The question was what do people feel is best for immediate income and why would you use it; not why are SPIA's a good option. SPIA's used-to-be primarily used to generate a "lifetime income"; however, as products have evolved over the last 5+ years there is less reason to use them. Specifically to my comment, things like age, and health may be important factors because many of the FIA products with guaranteed lifetime income benefits stop issuing policies at the age of 80 (Great American and F&G {F&G would be a secondary option in my opinion to Great American!} have compelling income/death benefits up to age 85) So for a client over the age of 90"might" be a slightly better option, but even at that age, there is such little internal growth in a SPIA that the client might as well but the money into a no risk holding place and simply draw down on the principle. The other reason to use a SPIA would possibly be to fund a lifetime pay life policy. (I have other recommendations on this though)
To get into specific products that allow lifetime income to be triggered immediately and to ALSO provide true inflation protection, the options are limited to basically one specific carrier; Allianz. If the income doesn't need to be triggered immediately, then there are many more that allow for the "lifetime income guarantees" however no other carrier is offering true inflation protection for life. American Equity (which I love and write by the way) does not really offer a true inflation protection option. They offer Income Option #2 which is a 1% reduction in the starting payout percentage, then continues to grow at a steady rate of 3% during the distribution phase, however only until the Accumulation Value is exhausted. Also, because the client is starting at a lesser payout percentage (1% less) the client receives less income for 9 years than if they would have selected the normal Option #1. Because the client received less income over that initial 9 year period, it's not until the 16th year of the distribution phase that the client finally receives a cumulative amount of money that is actually greater. So, with American Equity's LIBR the client would need to be confident that they will be alive and receiving income longer than 16 years to have Option 2 "the inflation option with AEI" be a better choice. I believe there are other carriers that offer a similar increase over time, but no carrier links the direct index gains to the client's income every year for life. (even when the annuity's Accumulation Value is drawn down to $0.00) Allianz has kind of coin phrased the term "an increasing income off of a decreasing asset." If you aren't familiar with the Allianz products there are two different platforms now. Allianz has their standard products and a new Preferred Product line. Going back several years to products like the Endurance Plus, the MasterDex 5 Plus, and even the MasterDex X which are all standard products offer increasing income based off the products index returns once the client triggers the lifetime income. With the new Preferred products there is one in particular that has been getting a ton of premium (I believe close to 80%+ of their new business) called the 360. (they have a product called the 222 that provides an additional LTC type benefit also.) There are several products that allow the client to trigger lifetime income immediately. The MasterDex 5 plus is a product that's been out a long time, same goes for the MasterDex X with the additional rider, and now the newer (and honestly much better) 360, and the Core Income 7.
