Commissions on fixed annuities

[newbie2]

Hi All, can someone tell me typically how much can I get in commissions for fixed annuities ?

Am thinking of selling myself a fixed annutiy seeing the spike in interest rates these days.

Thanks ...

 

[Newby]

I would recommend selling yourself an indexed annuity. More commission and more interest most of the time.
Annuities pay commission based on the length if the annuity. A 10-year pays more than a three year.
Most fixed annuities will be in the 1.5%, 2%, 3% commission range.
Indexed will be 5 to 7% range.

 

[goillini52]

I would recommend selling yourself an indexed annuity. More commission and more interest most of the time.
Annuities pay commission based on the length if the annuity. A 10-year pays more than a three year.
Most fixed annuities will be in the 1.5%, 2%, 3% commission range.
Indexed will be 5 to 7% range.

Says one Newby to another.

 

[newbie2]

Says one Newby to another.

haha, yes, good one !! newby helping newby

 

[newbie2]

I would recommend selling yourself an indexed annuity. More commission and more interest most of the time.
Annuities pay commission based on the length if the annuity. A 10-year pays more than a three year.
Most fixed annuities will be in the 1.5%, 2%, 3% commission range.
Indexed will be 5 to 7% range.

Thank you ! Do I just approach the carrier directly or are there some standard protocols agents have to follow for selling himself a fixed annuity? I guess it really depends on the insurance company?

 

[newbie2]

BTW, it's actually not bad if I get 3% commission on a fixed annuity. The current rate in my area is about 3.5% for a fixed annuity, and if I get say 3% comm for selling myself a contract, then I will be earning 6.5% on the first year of the annuity, am I correct? Way better than what I can earn with a CD.

 

[marindependent]

BTW, it's actually not bad if I get 3% commission on a fixed annuity. The current rate in my area is about 3.5% for a fixed annuity, and if I get say 3% comm for selling myself a contract, then I will be earning 6.5% on the first year of the annuity, am I correct? Way better than what I can earn with a CD.

but then you would have a "fixed annuity" during times of rising interest rates

 

[Newby]

BTW, it's actually not bad if I get 3% commission on a fixed annuity. The current rate in my area is about 3.5% for a fixed annuity, and if I get say 3% comm for selling myself a contract, then I will be earning 6.5% on the first year of the annuity, am I correct? Way better than what I can earn with a CD.

I sell myself indexed annuities every year. I get the 6% commission guaranteed (I consider that a guaranteed bonus). And my last two annual statements I got 17% interest on one and over 20% on the other.

Go for LONG indexed annuities. 10-years minimum. 12 to 15 is better. Uncapped. Get as much participation rate as you can find.

 

[DonP]

I sell myself indexed annuities every year. I get the 6% commission guaranteed (I consider that a guaranteed bonus). And my last two annual statements I got 17% interest on one and over 20% on the other.

Go for LONG indexed annuities. 10-years minimum. 12 to 15 is better. Uncapped. Get as much participation rate as you can find.

I thought indexed annuities had caps on the upside like 10% has they have a floor were you can’t make less than zero ?

 

[Newby]

I thought indexed annuities had caps on the upside like 10% has they have a floor were you can’t make less than zero ?

Many do. But not all. Some have participation rates. So if you have 40% participation rate and the market goes up 10 points you get 4 points.

Participation rates are uncapped but will sometimes have a spread. A spread is a fixed % that you get none of. My annuity that did the most killer recently has a 12% spread (so I get nothing unless the annuity goes up over 12%) but I get 150% of what it does over the 12%.

Also I can only have 70% of the money in this annuity in that Interest bucket. The other 30% of the money has to be at a fixed rate of 1.5%

So this annuity will perform poorly unless the market has large movements. Unless it goes up over 12% then I prefer that it drops like a rock because I'm only getting 1.5% of 30% either way in those years.

This one locks the gain in every 2-years. I've had it 6-years. Here is how it has done:
I paid $85,000 into it 6-years ago.
at year 2 it locked in at $96,000
at year 4 it locked in at $95,112 (this was 2020 when the market tanked due to COVID.) This annuity also has a 1.5% fee to get access to the uncapped 150% allocation.
at year 6 it locked in at $148,183
I still have 6-years to go and it might do poorly the rest of the years but it can never go below $148,183 plus the 6% I made when I sold it to myself.
Well actually if it did terrible I would lose the 1.5% fee amount each year. So that means I have $13,000 in fees during the rest of the life of this annuity and I have a minimum interest of right at $4,000 in interest on the fixed portion to offset that. So I have $9,000 of my $148,183 at risk during the rest of the life of this annuity if it never performs well during the next 6-years.

So, this is not an annuity that I have ever sold to clients. It's too complicated to explain plus there is a chance they can lose money due to the fee. I keep annuity sales simple with no fees and no chance that they won't gain something every year. But for myself I like to add a little more risk of not earning more than the fee into it to get a bigger piece of the pie.

So now you know.