What's a Typical Expected Return for an Indexed Annuitiy?

[beachbum2012]

I know it's a pretty broad question, but I was wondering what a typical expected return for an IA is over the life of its surrender period? Assume it's one of the better products available in the market at the time with regards to participation rate, caps, etc. Also assume you stay away from insurance companies with low ratings. Let's just use a 10-year surrender term product for example, and it won't be used for lifetime income; just accumulation. I imagine the return is pretty strongly correlated to the 10-year treasury, but I was wondering what a general ballpark would be.

 

[pfg1]

I'd say 5-6% is being realistic long term.

 

[indiana260]

Take a look at American Equity "real benefits" piece.

The 15 yr nearly doubled. They have a new one that shows 2004 to 2014. Can't remember what the increase was bit it was close to 50%

 

[gflo]

If you use a product with a big upfront bonus, your caps/part rate will be lowered and so will the overall yield. I'm a little more conservative and talk 4%ish when with a client. Personally I'm optimistic and believe they will do better.

 

[DFW]

i would say 4-6%. i have been getting 10-20% coming back on some monthly pt. to pt. strategies. i would recommend selling at 4-6%.

 

[LauderdaleBAUS]

I had some Allianz 360's do 20% the past 12 months on the M2M....I would say the average was between 12-20%. Worst I have seen was around 7%.

 

[Norwayguy]

I explain its designed to pay about 1-2% more than a regular fixed annuity so 4-6% would be the norm over 10 years and if it did better then all is good.

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I had some Allianz 360's do 20% the past 12 months on the M2M....I would say the average was between 12-20%. Worst I have seen was around 7%.

I believe he was talking long term over say 10 years.

 

[taylormadetp]

It depends but F&G new product has a "stacking" effect on its rider that is connected to the Dow Jones Real Estate Control Index...it is possible to get over 10% rollup per year ... just depending.

 

[Norwayguy]

It depends but F&G new product has a "stacking" effect on its rider that is connected to the Dow Jones Real Estate Control Index...it is possible to get over 10% rollup per year ... just depending.

Rollup is not a real return unless you can walk away with the rider values.

 

[Tahoe Ray]

i would say 4-6%. i have been getting 10-20% coming back on some monthly pt. to pt. strategies. i would recommend selling at 4-6%.

I agree...4-6% (before rider costs) is what I use as well.

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Rollup is not a real return unless you can walk away with the rider values.

Agreed but it is worth noting that several carriers death benefits give you access to the GMWB over a shortened (5 years as an example) time frame.