Anyone Heard of AXA?

[AnonymousOne]

If you think the odds are good of the market returning 4% or less over 25+ years. Then don't invest in the market.
This recommendation would be palatable from a friend who you WANT to invest with if you were 55+.

 

[NWBenefitProvider]

This is a VA and there is no guarantee return. It appears what they guarantee is a 4% credit to the protected benefit which pertains to what your guaranteed income is based on.

The contract has an M&E charge of 1.65%. The underlying sub-accounts have expenses which range from 0.95%-1.31% (based on a person choosing to go with the protected benefit). So this means your expenses are 2.60% - 2.96% before you add the guarantee withdrawal benefit which is at 1.15% and can go as high as 2.30%. So now you're around 4% minimum. This means your investments have to exceed 4% for you to realize a positive return.

There is no downside investment protection. Meaning you can lose money. The protection only pertains to how much income you can withdraw.

If you're looking for something that can't lose money, this isn't it. No VA is going to guarantee that. You might want to explore other options.

Interesting. That's not how it was explained to me. I was told that it would earn the 10 year treasury + 2% with a guaranteed minimum of 4% each year. If the market went up 15% I would get 15%. If it went down 10% I would get 4%.

This is why I am concerned. It seems too good to be true. The illustration is too hard to understand though. Maybe my friend doesn't really know the product well enough either.

So, is there a VA that is similar in that you have a guaranteed minimum and then maybe a guaranteed maximum, maybe something with a 0-12% floor to ceiling cap?

 

[sman]

Interesting. That's not how it was explained to me. I was told that it would earn the 10 year treasury + 2% with a guaranteed minimum of 4% each year. If the market went up 15% I would get 15%. If it went down 10% I would get 4%. This is why I am concerned. It seems too good to be true. The illustration is too hard to understand though. Maybe my friend doesn't really know the product well enough either. So, is there a VA that is similar in that you have a guaranteed minimum and then maybe a guaranteed maximum, maybe something with a 0-12% floor to ceiling cap?

The credit is related to the income benefit and not your actual return. There is no VA I'm aware of that protects your actual investment from incurring a loss in a down market.

If you're looking for a zero percent floor then an index annuity is likely your best bet.

 

[AnonymousOne]

Interesting. That's not how it was explained to me. I was told that it would earn the 10 year treasury + 2% with a guaranteed minimum of 4% each year. If the market went up 15% I would get 15%. If it went down 10% I would get 4%.

This is why I am concerned. It seems too good to be true. The illustration is too hard to understand though. Maybe my friend doesn't really know the product well enough either.

So, is there a VA that is similar in that you have a guaranteed minimum and then maybe a guaranteed maximum, maybe something with a 0-12% floor to ceiling cap?

No, no, no.
These gains, whether market or rider, do not stack like the crediting method of index. When you get to your office look very closely at the income rider graph. The market has to pass back over the rider line for that to be credited.

Yes there is a VA that has a guaranteed min and max with a floor and ceiling, but it's called an IA, they went ahead and took all the M&E and fund fees away when they renamed it.

 

[NWBenefitProvider]

Here are a few of the relevant pages that highlight the product. Red flags?

 

[sman]

Here are a few of the relevant pages that highlight the product. Red flags?

The guaranteed growth pertains to the benefit base (i.e. - the amount from which you can draw an income). As mentioned before, this is NOT a guarantee of return on your investment. You do NOT have a guarantee of no loss of value.

There really isn't anything that can be said which hasn't already been said.

 

[NWBenefitProvider]

Ok, so assuming this is a too good to be true and loaded with fees option, what would be a better one?

25 years of growth potential, with primary desire to have a source of retirement income. I do not want to worry about the stock market tanking and my capital being diminished. I am ok giving up SOME portfolio gains in order to accomplish this, but still need it to be a net positive after the fees and inflation.

I looked around online and see Jackson National has one with a 4% minimum and a 10% maximum cap. I think they can change those each year though, can't they?

If you were 40 and had 100-200k stuck in the annuity world and wanted to make sure you were getting a decent return over the next 25 years regardless of the stock market, where do you put it?

I appreciate the insight. In general are fees a lot lower with fixed annuities versus variable?

 

[sman]

Ok, so assuming this is a too good to be true and loaded with fees option, what would be a better one? 25 years of growth potential, with primary desire to have a source of retirement income. I do not want to worry about the stock market tanking and my capital being diminished. I am ok giving up SOME portfolio gains in order to accomplish this, but still need it to be a net positive after the fees and inflation. I looked around online and see Jackson National has one with a 4% minimum and a 10% maximum cap. I think they can change those each year though, can't they? If you were 40 and had 100-200k stuck in the annuity world and wanted to make sure you were getting a decent return over the next 25 years regardless of the stock market, where do you put it? I appreciate the insight. In general are fees a lot lower with fixed annuities versus variable?

What I would do should have no bearing on what you should do. If I had a 25 year time horizon, I'm investing in the market. I believe the returns I could get over that period of time would exceed that of an index annuity.

As for fees in fixed annuities, there generally aren't any unless you add some type of rider. And don't confuse caps with actual returns. Just because you see something that has a 4% minimum and 10% max doesn't mean your worst case scenario is a 4% return. But if you're settled on not wanting to risk any loss, a variable annuity isn't for you.

 

[indiana260]

I would recommend a American Equity Traditions Gold.

Caps are 5.25 on small pt to pt.

You can add a life time income rider that guarantees 4% credit to your IAV at no cost.
This would seem to be an excellent fit that I feel is a much safer play than the VA.

Feel free to PM me if you would like more info.

 

[AnonymousOne]

My recommendation is highest index cap you can find with a bailout, thinking great American. Stick it out for 10 years then reevaluate with rider going forward.

Or

Go with a company like north American, issues at age 40 a rider at 5.5% in perpetuity, which is rare.