Questions About Annuities

[vic616283]

Hello guys,

Are there any companies offering EIA's with cap/floor/participation structures that can be reasonably expected to result in returns in the 6-7% area, with a reasonably short surrender period (5 years or so)? I'm talking about total yield including loads and charges, with a ~10 year time horizon.

Related Q: What are the top annuity companies, performance wise?

Does anybody know of a book or ebook that I can buy which covers the basics (and beyond) of annuity education for agents? I don't want dumbed-down stuff for clients; I want to actually understand the mechanics behind the products. Maybe a trainign webinar from a carrier's web resources?

Thanks a lot.

 

[Tahoe Ray]

Hello guys,

Are there any companies offering EIA's with cap/floor/participation structures that can be reasonably expected to result in returns in the 6-7% area, with a reasonably short surrender period (5 years or so)? I'm talking about total yield including loads and charges, with a ~10 year time horizon.

Related Q: What are the top annuity companies, performance wise?

Does anybody know of a book or ebook that I can buy which covers the basics (and beyond) of annuity education for agents? I don't want dumbed-down stuff for clients; I want to actually understand the mechanics behind the products. Maybe a trainign webinar from a carrier's web resources?

Thanks a lot.

6-7% is pushing it....

Western National, Symetra and Genworth all have 7 year products with caps in the 5-6% (1yr S&P p2p) range for their high bands.

Great American is at 5.5% (with a bailout cap at 5%) using the same strategy for 100k+ on their 6 year product.

I'm sure that there are others but that will depend on what state you're in and how much premium you're talking about.

Even with caps that "high", your expectation should be to try and outperform other fixed annuities, CDs, bonds etc. 6-7% over 10 years is not really reasonable for any of these vehicles in today's rate environment. The "risk free rate" is still under 3%. Even if we did see a large rate spike a couple of years out, you'd still have to make up for the early years which would likely keep your average yield well below what you describe.

I don't know of any books that you can read but maybe someone else can chime in...your IMO should really be helping you with all of these things. (assuming that you can't find a successful agent to partner with...nothing is a substitute for experience)

Good luck.

 

[vic616283]

Thanks a lot for the reply. If the cap on a product is 5.5 then couldn't you say that the expectation of 10 year returns is sure to be lower than 5.5? It's highly improbable that the cap will be met every single year, yeah?

I do have a mentor but I like getting many different perspectives. My mentor isn't a fan of annuities.

 

[Tahoe Ray]

Thanks a lot for the reply. If the cap on a product is 5.5 then couldn't you say that the expectation of 10 year returns is sure to be lower than 5.5? It's highly improbable that the cap will be met every single year, yeah?

I do have a mentor but I like getting many different perspectives. My mentor isn't a fan of annuities.

Exactly....for example, if the cap were to remain the same for 6 years and you managed to cap out 4 of those years and you had a 0 return in the other two, your average would only be 3.63% for the 6 years.

Once you start adding riders, you're going to get even less (but then again some riders can be very attractive based on client objectives.)

 

[Indy007]

Athene's Accumulator 5 currently has a 5% cap 1yr s&p ptp, 2.2% s&p monthly. Fixed account is at 2%. I believe the min deposit is $10k. 10% free withdrawal after first year and systematic withdrawals available. Not too bad for a "short term" indexed annuity that accepts smaller deposits. Only negative is the B++ rating, but personally that doesn't stop me from writing them if they fit my clients goals.

 

[unlimitedsigh]

I know you asked for a book/e-book, but I am enjoying WebCE's EIA training. It's basic stuff really, but at least it counts for 8hrs or so.

 

[CALTCAgent]

I do have a mentor but I like getting many different perspectives. My mentor isn't a fan of annuities.

What is your mentor a "fan" of?

 

[vic616283]

What is your mentor a "fan" of?

IULs and spwl mostly. I personally am somewhat on the iul bandwagon but still push people to opening brokerage accounts and to get their match on their employer qualified plans.

----------

I know you asked for a book/e-book, but I am enjoying WebCE's EIA training. It's basic stuff really, but at least it counts for 8hrs or so.

Thats such a great idea. Why not kill CE credits while at it right?

 

[nathan.lee]

Here are a couple of e-books. Good place to start. I'll see what else I have sitting in my computer.

 

[fatima]

Please consult the agent directly. Do not lost yourself in inform-ocean.
You can give a call to my personal agent 347-280-8826, in New York. I think he would not mind to give you a good customized solution in person.
To my mind, annuity interest rate is a matter, but the company reputation and history is more important.