Nationwide New Heights

[scagnt83]

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.

Yes you seem to be correct: AnnuityAdvantage-Equity Indexed Annuities



On the high band, it gives you options of a 45% PR using monthly averaging.
Then it also gives you 4% daily average spread on the S&P500 & DJIA.
Then a Yp2p of 3.1% S&P & 2.8% Dow.

I think that for an income play, the 3.1% Yp2p (which would be maxed out most years judging on a historical basis) combined with the 5% Rider Credit, would be a strong option giving you around 8% most years.

But the 5% withdrawals makes it a bit less competitive than it could be... I guess they want people to be committed to that income rider.... lol. Of course, the whole product is an income rider play, much like the 222 with the "free" income rider. So there really shouldnt be a huge need for large withdrawals that wouldnt be covered under waiver provisions.

There are a bunch of states that it is not approved in. MNL has a few different newer products that have limited states they are in. I forget the name of it, but there is one with an optional rider that gives you 10% premium bonuses and 20% free withdrawals.... but its availability is pretty limited last I checked.

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

They are both preferred?
________________________________________

You see its stuff like this that just gets under my skin with Allianz. And it is not Allianz's fault. It is the agents.

Maybe I am going to take some flak over this post... recently "stan the annuity man" posted a few articles on lifehealthpro about an ethical crisis in our industry.
I didnt agree with a good bit of what he said, but I did agree with some of his points, largely the points about advertising practices. But he took a lot of heat over his articles!


Which brings me to my point.

Currently, the 222 & 365i IAs account for something like 80% of Allianz's current sales.

But if you look at the actual product (not just the Rider), the CoreIncome7 is a much stronger product!
And it's Income Rider is not bad at all.

The CI7 has Caps that are a full 2% higher than the 222! Plus the spread on the Dynamic Balance is a full 1% less! (0.5% spread)

Now, how much do you want to bet that the comp on the 222 is around 2% higher than the Core Income 7???? (anyone remember that cap % difference?)



For those who are going to respond with the difference in Income Riders, well, with a 1.5% spread on the BDBI, the average of the 10y & 15y returns gives you 4.8%.... which yields around 7%. Just 1% higher than the CI7.
But on the flip side, with the higher caps, the CI7 will give you a much better chance for a step-up in income....


So can someone tell me a reason other than comp, that the 222 is appropriate for 80% of Allianz's customers when there is a shorter term product with 50% higher Caps???????

How many of those 222 clients do you think would have bought the CI7 instead if presented with a side by side comparison...? How many do you think actually received a side by side comparison?

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Right, so I told my BGA no thanks

Did they pitch you the Core Income 7 with a 0.50% spread on the Dynamic Balance and a 6.25% Yp2p Cap?

 

[SanDiego619]

Yes you seem to be correct: AnnuityAdvantage-Equity Indexed Annuities



On the high band, it gives you options of a 45% PR using monthly averaging.
Then it also gives you 4% daily average spread on the S&P500 & DJIA.
Then a Yp2p of 3.1% S&P & 2.8% Dow.

I think that for an income play, the 3.1% Yp2p (which would be maxed out most years judging on a historical basis) combined with the 5% Rider Credit, would be a strong option giving you around 8% most years.

But the 5% withdrawals makes it a bit less competitive than it could be... I guess they want people to be committed to that income rider.... lol. Of course, the whole product is an income rider play, much like the 222 with the "free" income rider. So there really shouldnt be a huge need for large withdrawals that wouldnt be covered under waiver provisions.

There are a bunch of states that it is not approved in. MNL has a few different newer products that have limited states they are in. I forget the name of it, but there is one with an optional rider that gives you 10% premium bonuses and 20% free withdrawals.... but its availability is pretty limited last I checked.

Yeah it doesn't seem bad just not as revolutionary as it may seem at first glance.

Definitely more comparable to the 222 if we're looking at comparing it to a preferred product. Benefits of 222 in comparison (if we leave the debate of the indexing strategy out). 15% bonus on the income account. Built in income doubler for confinement. Income account available as a death benefit over 5 years. Also only a ten year product.

The 10% free withdrawals are important to a lot of my guys because we have them commonly using a 222 with free withdrawals to fund a ten pay Life policy. Instead of using a 10 year SPIA.

 

[jmhalvo]

They are quite well-meaning, and made it clear the 7 year was best for me to review, knowing that I am a CFP that cares about the details. Still, I seem to recall that Allianz has a potential 12% spread on it, moving forward. So I said "maybe later".

 

[SanDiego619]

Yes you seem to be correct: AnnuityAdvantage-Equity Indexed Annuities



On the high band, it gives you options of a 45% PR using monthly averaging.
Then it also gives you 4% daily average spread on the S&P500 & DJIA.
Then a Yp2p of 3.1% S&P & 2.8% Dow.

I think that for an income play, the 3.1% Yp2p (which would be maxed out most years judging on a historical basis) combined with the 5% Rider Credit, would be a strong option giving you around 8% most years.

But the 5% withdrawals makes it a bit less competitive than it could be... I guess they want people to be committed to that income rider.... lol. Of course, the whole product is an income rider play, much like the 222 with the "free" income rider. So there really shouldnt be a huge need for large withdrawals that wouldnt be covered under waiver provisions.

There are a bunch of states that it is not approved in. MNL has a few different newer products that have limited states they are in. I forget the name of it, but there is one with an optional rider that gives you 10% premium bonuses and 20% free withdrawals.... but its availability is pretty limited last I checked.

----------



They are both preferred?
________________________________________

You see its stuff like this that just gets under my skin with Allianz. And it is not Allianz's fault. It is the agents.

Maybe I am going to take some flak over this post... recently "stan the annuity man" posted a few articles on lifehealthpro about an ethical crisis in our industry.
I didnt agree with a good bit of what he said, but I did agree with some of his points, largely the points about advertising practices. But he took a lot of heat over his articles!


Which brings me to my point.

Currently, the 222 & 365i IAs account for something like 80% of Allianz's current sales.

But if you look at the actual product (not just the Rider), the CoreIncome7 is a much stronger product!
And it's Income Rider is not bad at all.

The CI7 has Caps that are a full 2% higher than the 222! Plus the spread on the Dynamic Balance is a full 1% less! (0.5% spread)

Now, how much do you want to bet that the comp on the 222 is around 2% higher than the Core Income 7???? (anyone remember that cap % difference?)



For those who are going to respond with the difference in Income Riders, well, with a 1.5% spread on the BDBI, the average of the 10y & 15y returns gives you 4.8%.... which yields around 7%. Just 1% higher than the CI7.
But on the flip side, with the higher caps, the CI7 will give you a much better chance for a step-up in income....


So can someone tell me a reason other than comp, that the 222 is appropriate for 80% of Allianz's customers when there is a shorter term product with 50% higher Caps???????

How many of those 222 clients do you think would have bought the CI7 instead if presented with a side by side comparison...? How many do you think actually received a side by side comparison?

----------



Did they pitch you the Core Income 7 with a 0.50% spread on the Dynamic Balance and a 6.25% Yp2p Cap?

Would love to respond to the rest of this when I get back to my computer and I'm not typing on a phone.

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Yes you seem to be correct: AnnuityAdvantage-Equity Indexed Annuities



On the high band, it gives you options of a 45% PR using monthly averaging.
Then it also gives you 4% daily average spread on the S&P500 & DJIA.
Then a Yp2p of 3.1% S&P & 2.8% Dow.

I think that for an income play, the 3.1% Yp2p (which would be maxed out most years judging on a historical basis) combined with the 5% Rider Credit, would be a strong option giving you around 8% most years.

But the 5% withdrawals makes it a bit less competitive than it could be... I guess they want people to be committed to that income rider.... lol. Of course, the whole product is an income rider play, much like the 222 with the "free" income rider. So there really shouldnt be a huge need for large withdrawals that wouldnt be covered under waiver provisions.

There are a bunch of states that it is not approved in. MNL has a few different newer products that have limited states they are in. I forget the name of it, but there is one with an optional rider that gives you 10% premium bonuses and 20% free withdrawals.... but its availability is pretty limited last I checked.

----------



They are both preferred?
________________________________________

You see its stuff like this that just gets under my skin with Allianz. And it is not Allianz's fault. It is the agents.

Maybe I am going to take some flak over this post... recently "stan the annuity man" posted a few articles on lifehealthpro about an ethical crisis in our industry.
I didnt agree with a good bit of what he said, but I did agree with some of his points, largely the points about advertising practices. But he took a lot of heat over his articles!


Which brings me to my point.

Currently, the 222 & 365i IAs account for something like 80% of Allianz's current sales.

But if you look at the actual product (not just the Rider), the CoreIncome7 is a much stronger product!
And it's Income Rider is not bad at all.

The CI7 has Caps that are a full 2% higher than the 222! Plus the spread on the Dynamic Balance is a full 1% less! (0.5% spread)

Now, how much do you want to bet that the comp on the 222 is around 2% higher than the Core Income 7???? (anyone remember that cap % difference?)



For those who are going to respond with the difference in Income Riders, well, with a 1.5% spread on the BDBI, the average of the 10y & 15y returns gives you 4.8%.... which yields around 7%. Just 1% higher than the CI7.
But on the flip side, with the higher caps, the CI7 will give you a much better chance for a step-up in income....


So can someone tell me a reason other than comp, that the 222 is appropriate for 80% of Allianz's customers when there is a shorter term product with 50% higher Caps???????

How many of those 222 clients do you think would have bought the CI7 instead if presented with a side by side comparison...? How many do you think actually received a side by side comparison?

----------



Did they pitch you the Core Income 7 with a 0.50% spread on the Dynamic Balance and a 6.25% Yp2p Cap?

So this could become very long winded but I will try not to let that happen. First of all, I have not been hearing that the 222 and 365i are making up 80% of the business at Allianz. I have had communication that it's the 360 being the most popular then the 222 after that then I'm not sure where 365i, CI7, and signature 7 fall into the order after that. So I wish there was a way to get more concrete evidence on that but what I can go on is what our Allianz regional rep tells us and what I see on my companies daily submitted reports. Its the 360 first then everything else (for just Allianz business I mean).

I really hope that no agent is having to decide between the 222 and the CI7. They are completely different and fit totally different clients. Having said that, the CI7 and Allianz 360 are very similar. 7 year product vs 10 year. Built in income rider on both products with a fee sitting at 1.05%. The difference between these two is going to be the length of deferral (if planning on triggering lifetime income) or if the client may think there is a chance they will walk away after surrender. I have run these two side by side about a million times on illustrations using the same numbers on both so I have a decent idea where these should be used. If the client wants income and they plan on either triggering immediately (and use income option 2) or defer for 4-5 years then core income 7 is a great choice. Anything beyond that should probably be the 360 because the big difference maker is the 50% bonuses for the indexing credit. Take note that both the 360 and CI7 have one account value (the accum value) even though they are income rider products. So when the client is getting those 50% indexing bonuses, its going straight to money that is available to him on a walk away value not in the "income account" like in the 222. The core income 7 has great caps/low spread but it does not get those bonuses to any account value. After about 5-6 years of deferral this gives the 360 a large head start for a person triggering income but even better for someone who may want to walk away (yes they have to wait three years more to do that). Therefore, if the client is not 100% what they want to do with this money and think it will be in the product a little while, the 360 is just a little more versatile.

All the other products come into play for different reason. 365i, 222, and signature 7 all come into play for a client who is adverse to fees.

At our office 365i is recommended for a couple different scenarios.
1. The client likes the idea of a bonus and likes the whole uncapped strategy thing but they don't want to pay a fee. So.... 365i with no income rider attached with the BUDBI for indexing.
2. The client is surrendering an existing policy somewhere else and needs a bonus to make that up for suitability. The income rider is at least decent and is going to give them a benefit they don't currently have.

Signature 7 is for a client that doesn't like fees and whats a shorter term, walk-away product with decent caps or an okay spread for an uncapped strategy. I personally would try and talk them into CI7 because anytime I compare these two for just accumulation the signature 7 is only 1-2K more than the CI7. Therefore the client can go CI7 and if something changes a few years down the road they can trigger lifetime income if they want.

222 is a client adverse to fees. Knows they don't need the money for at least 10 years. Maybe has some concerns about LTC and wants to leave a good amount to a beneficiary.

They're just all pretty different and I hope the agents writing them know this and don't just listen to what they're marketer tells them because it makes them more commission and the FMO more override then a 7 year product. BUT, the 360 really does just cover the largest client base.

Oh the commission is about 2.5% difference depending which 7 year product you choose BTW. Not nearly that big of a difference for override obviously.


I realize not everyone who is writing these products analyze them in this way but I can only speak for my firm. I hope this all made sense since it did get very long (sorry) and I don't want to go back through and proofread.

 

[jmhalvo]

Is it true Allianz is way behind in processing exchanges due to the popularity of their uncapped strategy?

 

[SanDiego619]

Is it true Allianz is way behind in processing exchanges due to the popularity of their uncapped strategy?

Yes. I mean we haven't experienced "way" behind but they're definitely backed up. I believe they recently hired 50 people to help with catching up.

 

[NOLAagent84]

Actually, volatility is perfect for this type of product. At the end of a 2 year period of high growth, the client locks in their gains and can never lose them. Let's say the market plumits, and at the end of the 2 year period, the market is down 20%, the client would make the guaranteed minimum BUT, it would reset at the low-water S&P mark, so when the market goes back up, the client goes up with it. I have one client that did have a 39% return with a 75%/25% allocation and 1.5% fixed rate (when rates where a little higher). It was certainly an issue of not only locking in at the perfect time in 2011 and locking in those gains 2 years later in 2013, but the client also took out 10% free withdrawal right before the end of the end of the 2 year lock in date, and a portion of those gains were captured when he did that. 39% is not ordinary, I assure you, but when almost all of my clients who invested in 2011 and locked in in 2013, had a 2 year return of atleast 24%. I don't of another product that enables you to participate in the market with no risk at such a level or a "fixed" product that produces those kinds of returns with no risk. So when you look at it from that position, I don't think it can be beat. Ofcourse securities get you higher returns, but name me another product that can do what this product can do.

 

[jaspreet]

I can't see having a 2 year lock in being beneficial, especially with today's volatility

Hi, Are you the Nationwide agent. I am looking forward to get appointed with them.
But there in no information on their website on how to become an agent.

 

[DANNYO]

Did this annuity ever return less then 10% in any one year

 

[Tahoe Ray]

Did this annuity ever return less then 10% in any one year

You're posting a lot regarding this 10% number.

Indexed annuities are not a replacement for equities. From an asset class perspective, they are a bond hedge.

You would hope that your indexed annuity would outperform the 10 year treasury by 200-300 basis points.

If you can beat a MYGA (multi year guarantee annuity) by 1-2%, it can be a great product.

Compare FIAs to bond alternatives, not equity ones.

Your expectations will thank you.