Simplifying FIA Crediting Methods

[jmarkk1]

With all the different kinds of crediting strategies, etc.
I find it difficult to wrap my head around the month pt. to pt, caps, participation rates, etc.

How do you know which crediting method is strongest? It seems like the only thing we know about FIA's are first year rates, and I'm not real sure how to determine what renewal rates could be. Ideally, it would be nice to have option for no caps and 100% participatin rate with some diversification, like more than just S&P.

This doesn't seem to exist, so how can I know which companies have the best strategies for clients on the account value side of the policy? (assuming clients that want growth or clients that want safety in growth w/o hype of "possible" gains)

 

[Norwayguy]

With all the different kinds of crediting strategies, etc.
I find it difficult to wrap my head around the month pt. to pt, caps, participation rates, etc.

How do you know which crediting method is strongest? It seems like the only thing we know about FIA's are first year rates, and I'm not real sure how to determine what renewal rates could be. Ideally, it would be nice to have option for no caps and 100% participatin rate with some diversification, like more than just S&P.

This doesn't seem to exist, so how can I know which companies have the best strategies for clients on the account value side of the policy? (assuming clients that want growth or clients that want safety in growth w/o hype of "possible" gains)

How about no caps and currently 90% participation set and guaranteed at issue no moving parts. It exists. Also there are products offering more than just the S&P 500.

 

[jmarkk1]

How about no caps and currently 90% participation set and guaranteed at issue no moving parts. It exists. Also there are products offering more than just the S&P 500.

What annuties exist with no caps and guaranteed 90% participation rate for entire contract? and more than just S&P?

 

[francodevivo]

Of all the illustrations I run on a weekly basis, and considering the cap rates are so low currently, I generally find that the annual point to point turns out better than the monthly over a 10 year period.

If you find something with a good annual cap ( 4 or higher I would venture to say), then I would use that over a 1% monthly.

 

[iceco1d]

You won't know what's "best" until the crediting period is over. Most research seems to suggest that 1 year point-to-point has given the most interest historically. 2 year point-to-point, monthly average, etc. give you the chance (usually) to earn a higher interest rate than you would in the 1 year point-to-point.

Some contracts allow indexes other than the S&P (and some offer a LOT more).

In the end, it's all about the client. Explain the pros and cons to each method, give them your advice, and then let them pick.

 

[Norwayguy]

What annuties exist with no caps and guaranteed 90% participation rate for entire contract? and more than just S&P?

Please notice the end of 1 sentence. 90% participation no cap all set at policy issue is ANICO Valuelock 10 used to be 100% participation. As I said there are products that index off of more than the S&P500. I know you know that icecold, I was speaking to the person that asked for indexes beyond just the S&P.

 

[iceco1d]

Sorry about that Norway. I was answering a post before I read your response, that wasn't directed at you.