Nationwide New Heights

[AnonymousOne]

It probably comes with the notice that they're also dropping the p2p to 1%.

The illusions look pretty good though.

I don't want the illusion to appear good, just the illustration

 

[jmhalvo]

It probably comes with the notice that they're also dropping the p2p to 1%. The illusions look pretty good though.

Right, so I told my BGA no thanks

 

[scagnt83]

Not to steal the thread but what's your take on that spread? I'm a little concerned about how high it can go...

That is my big worry. A 12% possible spread is ridiculous. Especially considering the underlying Index being used.

Basically they are saying that no matter what, they have the ability to drop your Indexed Returns to Zero, and just let the Guaranteed Minimum credit at the end of the term.

At least with a 1% Min Yearly P2P Cap, you get the 1% gain each year and not have it credited on the back end.



But aside from the Guaranteed Minimums, there is nothing real special about the Dynamic Balance Index.

I keep hearing people say they were pitched this product and told that the DBI averages 7%-7.5%.
Over the past 10 years it is around 7.4%, which Nets 5.90%
But over the past 15 years it is at 5.19%, which Nets 3.69%

Also, only 39% of Allianz's IAs have renewed equal to or better than the original Cap/Spread.
So you would be foolish to assume that the Spread will stay at 1.5%...
The majority (53%) of Allianz's renewals have been 75% or better than the original value.
A 25% reduction (ie spread increase) would put you around a 1.88% Spread, or reduces your expected earnings by -0.38%, to 3.31%-5.52%.

Compare that to a 5.50% Yp2p on the S&P 500, and it is basically the same expected earnings on a historical basis.

But, since GA was mentioned earlier (and has a 5.5% Yp2p Cap), if you look at their renewal history, 90% of renewals have been 90% or higher than the original value. 60% are at or above the original value.
Much stronger renewal rates with the same historical returns.

 

[jmhalvo]

That is my big worry. A 12% possible spread is ridiculous. Especially considering the underlying Index being used. Basically they are saying that no matter what, they have the ability to drop your Indexed Returns to Zero, and just let the Guaranteed Minimum credit at the end of the term. At least with a 1% Min Yearly P2P Cap, you get the 1% gain each year and not have it credited on the back end. But aside from the Guaranteed Minimums, there is nothing real special about the Dynamic Balance Index. I keep hearing people say they were pitched this product and told that the DBI averages 7%-7.5%. Over the past 10 years it is around 7.4%, which Nets 5.90% But over the past 15 years it is at 5.19%, which Nets 3.69% Also, only 39% of Allianz's IAs have renewed equal to or better than the original Cap/Spread. So you would be foolish to assume that the Spread will stay at 1.5%... The majority (53%) of Allianz's renewals have been 75% or higher than the original value. A 25% reduction (ie spread increase) would put you around a 1.88% Spread, or reduces your expected earnings by -0.38%, to 3.31%-5.52%. Compare that to a 5.50% Yp2p on the S&P 500, and it is basically the same expected earnings on a historical basis. But, since GA was mentioned earlier (and has a 5.5% Yp2p Cap), if you look at their renewal history, 90% of renewals have been 90% or higher than the original value. 60% are at or above the original value. Much stronger renewal rates with the same historical returns.

excellent info , I am staying with GA

 

[scagnt83]

excellent info , I am staying with GA

Here are the attachments for the stats I gave.
To Allianz's credit, the majority have been at 75% of original value or higher, which still is respectable considering how bad interest rates have been over the past 7 years. And at least they publish stats about their rates. Some companies wont.
But their renewal stats certainly are not the best in the industry, as the GAFRI chart shows.

 

[SanDiego619]

That is my big worry. A 12% possible spread is ridiculous. Especially considering the underlying Index being used.

Basically they are saying that no matter what, they have the ability to drop your Indexed Returns to Zero, and just let the Guaranteed Minimum credit at the end of the term.

At least with a 1% Min Yearly P2P Cap, you get the 1% gain each year and not have it credited on the back end.



But aside from the Guaranteed Minimums, there is nothing real special about the Dynamic Balance Index.

I keep hearing people say they were pitched this product and told that the DBI averages 7%-7.5%.
Over the past 10 years it is around 7.4%, which Nets 5.90%
But over the past 15 years it is at 5.19%, which Nets 3.69%

Also, only 39% of Allianz's IAs have renewed equal to or better than the original Cap/Spread.
So you would be foolish to assume that the Spread will stay at 1.5%...
The majority (53%) of Allianz's renewals have been 75% or better than the original value.
A 25% reduction (ie spread increase) would put you around a 1.88% Spread, or reduces your expected earnings by -0.38%, to 3.31%-5.52%.

Compare that to a 5.50% Yp2p on the S&P 500, and it is basically the same expected earnings on a historical basis.

But, since GA was mentioned earlier (and has a 5.5% Yp2p Cap), if you look at their renewal history, 90% of renewals have been 90% or higher than the original value. 60% are at or above the original value.
Much stronger renewal rates with the same historical returns.

Are we talking about American Legend III? That's what I'm guessing since we were talking about that earlier. Currently that's at 5.75% or it's going to 5.25% (still strong) in March. If that's what we're talking about then it's really apples and oranges cause we're looking at a 7 year product and its caps compared to a ten year. When you mentioned the 1.5% spread that would be in reference to the 222. The 360 and 365i are actually higher at 2.5% (also ten year products). I'm just guessing but I believe the 222 stayed at 1.5% because the client has to defer for 10 years before drawing income where as the 360 and 365i can both be trigger immediately.

The two seven year products (one is an income product and the other is accum) both have higher caps and/or lower spreads. Honestly it boils down to the client just like with anything. There are people who would choose the "risk" that the spread may change in the future because they want to take advantage of the currently low spread. For people doing lifetime income and want it immediately the core income 7 is sweet because it is only a .50% spread. Hopefully they're smart and choose increasing income because they're going to get pay raises based on an uncapped strategy that is only taking 50 points from them.

Then there are people that would choose to go with the GA Safe Return or Safe outlook because there is a bailout cap and ROP (on the Safe return). It's just another bag of products that can fit a certain base of clients. There is still yet to be one product that fits everyone (as you all know).


I don't know how to do attachments otherwise I would throw Allianz' rate sheet on here.

 

[scagnt83]

Are we talking about American Legend III? That's what I'm guessing since we were talking about that earlier. Currently that's at 5.75% or it's going to 5.25% (still strong) in March. If that's what we're talking about then it's really apples and oranges cause we're looking at a 7 year product and its caps compared to a ten year. When you mentioned the 1.5% spread that would be in reference to the 222. The 360 and 365i are actually higher at 2.5% (also ten year products). I'm just guessing but I believe the 222 stayed at 1.5% because the client has to defer for 10 years before drawing income where as the 360 and 365i can both be trigger immediately.

The two seven year products (one is an income product and the other is accum) both have higher caps and/or lower spreads. Honestly it boils down to the client just like with anything. There are people who would choose the "risk" that the spread may change in the future because they want to take advantage of the currently low spread. For people doing lifetime income and want it immediately the core income 7 is sweet because it is only a .50% spread. Hopefully they're smart and choose increasing income because they're going to get pay raises based on an uncapped strategy that is only taking 50 points from them.

Then there are people that would choose to go with the GA Safe Return or Safe outlook because there is a bailout cap and ROP (on the Safe return). It's just another bag of products that can fit a certain base of clients. There is still yet to be one product that fits everyone (as you all know).


I don't know how to do attachments otherwise I would throw Allianz' rate sheet on here.

The Core Income 7 is their strongest product in my opinion. Is it a Preferred Product?

 

[SanDiego619]

Are we talking about American Legend III? That's what I'm guessing since we were talking about that earlier. Currently that's at 5.75% or it's going to 5.25% (still strong) in March. If that's what we're talking about then it's really apples and oranges cause we're looking at a 7 year product and its caps compared to a ten year. When you mentioned the 1.5% spread that would be in reference to the 222. The 360 and 365i are actually higher at 2.5% (also ten year products). I'm just guessing but I believe the 222 stayed at 1.5% because the client has to defer for 10 years before drawing income where as the 360 and 365i can both be trigger immediately.

The two seven year products (one is an income product and the other is accum) both have higher caps and/or lower spreads. Honestly it boils down to the client just like with anything. There are people who would choose the "risk" that the spread may change in the future because they want to take advantage of the currently low spread. For people doing lifetime income and want it immediately the core income 7 is sweet because it is only a .50% spread. Hopefully they're smart and choose increasing income because they're going to get pay raises based on an uncapped strategy that is only taking 50 points from them.

Then there are people that would choose to go with the GA Safe Return or Safe outlook because there is a bailout cap and ROP (on the Safe return). It's just another bag of products that can fit a certain base of clients. There is still yet to be one product that fits everyone (as you all know).


I don't know how to do attachments otherwise I would throw Allianz' rate sheet on here.

The Core Income 7 is their strongest product in my opinion. Is it a Preferred Product?

Indeed it is. That and the "Signature 7" are the two 7 year products in the platform

 

[scagnt83]

Even if you had to throw the clients into a strat with a lower cap they're still getting a 50% bonus on that gain (assuming 360 or 222 which are most common).

Speaking of newer income rider innovations, what do you think of the MNL IncomeVantage product/rider?

It Credits 5% per year, but adds 100% of the Index Returns are on top of the 5%. And that is on top of a 5% premium bonus. And it is a 20 year rider. 4.75% payout at age 65. I think its a 12 or 14 year product though...

 

[SanDiego619]

Speaking of newer income rider innovations, what do you think of the MNL IncomeVantage product/rider?

It Credits 5% per year, but adds 100% of the Index Returns are on top of the 5%. And that is on top of a 5% premium bonus. And it is a 20 year rider. 4.75% payout at age 65. I think its a 12 or 14 year product though...

Funny I just had someone ask me about this and I just started looking into it on Friday. Seems all well and good but am I correct in seeing 35% participation for the indexing credit? That obviously puts a major dent in the excitement of things. Correct me if I'm wrong there. That just appears to be what I'm seeing. Also from what I'm seeing it's only 5% free withdraws? I guess that's not huge but most are 10% these days.

Let me know if I'm on track and I'll compare the two as an income play.