Indexing Strategies

[CHUMPS FROM OXFORD]

 

[Hopwood04]

I like Midland National's indexed life product better than any indexed annuity right now. The reason being they have NO Surrender charges if a client wants to get out. Secondly, they table shave the first 4 tables. Thirdly, if the client wants to take money out, they are not restricted to just 10%. Fourth, if the client has to use the money for long term care expenses, they can use 2% of the death benefit per month for long term care expenses, and lastly if they die the money comes out tax free. Oh yeah I forgot to mention they have a annual point to point strategy that has a cap of 14% and they pay 9.25% commission. So if a person dumps 100k into the product you the agent gets 9,250 commission. Yes the life contract is a modified endowment but so is an annuity.

 

[Franz Kafka]

Spamming *** ...

 

[pcwest]

I like to spread it around the different strategies. Who knows what the heck will happen over the year. I do like putting a little in the fixed. Keeps the pain in the butt clients from calling for the most part.

 

[nathan.lee]

I always tell people that whatever strategy they try, they can always change things up next year.

A few years ago I had people making over 20% with monthly averaging because the S&P was drifting up each month against 2.75% caps.

Not the same scenario now, as we all know. So, in response to "Gee, mister expert in the field, what strategy do you recommend for what you just sold me?" I reply "Well, where do you see the market going this coming year?"

If you think it's going to be volatile, then annual point to point makes sense. If you think it's going down, then interest makes sense (unless you have an income rider). If you think it's going to drift upward -then you're crazy.

In any event, it puts the decision back on them. It's all guesswork and I'd rather say in next year's meeting "Well, you said you thought the market was going up."

Love it!

Personally I like either a monthly avg. or annual pt. to pt. but it all depends on caps, part. rates, and spreads. At the end of the day I always ask:
"If there were an investment that would give you a reasonable return of 3% to 5% - not anything that's going to knock the ball out of the park – AND absolutely guaranteed that you would never lose a penny of your principal, would you use this investment for a portion of your savings?"
Then we go from there.

 

[jason93]

Just like asset allocation models, you can customize your flavor. A word of caution about lookbacks, the lookback period used (i.e. the day in and out) can be any period a carrier wants to measure to illustrate a given return for their product. Most companies use a lookback rate to determine their various illustrated rates, though some use a straight illustrated rate with no lookback. Make sure you stress test the products as well.

 

[bobwise23]

Annual Point-to-Point with the best conservative guarantees.

 

[TxsRang3r]

I look for anything uncapped right now. Annexus, NWL, Allianz's strategy, or one of the newer ones like ING benchmark. Also, the NACOLAH IPT is kinda cool. With caps as low as they are I don't see how you can position a 3% cap when you can get above that guaranteed from a MYGA?

 

[sdmillar]

What are you currently illustrating the non-guarantees at? I know most allow you to illustrate over 8%, but are you being that aggressive and setting your client up for disappointment?

 

[scagnt83]

I look for anything uncapped right now. Annexus, NWL, Allianz's strategy, or one of the newer ones like ING benchmark. Also, the NACOLAH IPT is kinda cool. With caps as low as they are I don't see how you can position a 3% cap when you can get above that guaranteed from a MYGA?

I agree that yearly caps are way too low to be useful at the moment. But a 2% Mp2p w/ cap is still a good option.

Uncapped options are nice, I like the BPA, but all the others use monthly avg, which im not a big fan of.