Go-to Annuity company

[KyleSage]

Curious on which Annuity product/company people use most often as a go-to. Obviously every house is different and they have different needs but which one do people use the most and for what reason?
Most of my sales come off of concept selling safety and low fee ( around 1% or less if they're getting rate enhancement or glwb, ltc riders etc since if they’re managed money it’s definitely not an increase in fees and they’re actually getting something for it, not to mention if its coming from a VA) or no fee, with competitive returns (but stress you likely won’t keep up with the SP500 in long run for example because thats not what these are used for.)
With that being said looking to look into a few different companies that have competitive comp and good indexes/rates with alot of companies recently improving rates. As well as wondering what other people use in a house to their competitive advantage and finding good products for the client while still getting at-least a decent commission. For example Ive used alot of Sentinel past few years for good comp with on paper good back testing and PAR rates and an increase in cap rates with SP, but have heard some unpleasant rumblings about them recently. have used Athene in the past (biggest annuity issuer is a nice sale point) but they have been picky about accepting stuff in surrender and comp isn’t as great. Have looked into F&G they have a good bonus and comp but haven’t dived into their indexes yet.


Anyone have any recommendations to look into from what they like to use?

 

[LostDollar]

Have looked into F&G they have a good bonus and comp but haven’t dived into their indexes yet.

Caveat, NOT an agent.

I have been looking at buying a small annuity. One of the things that interested me was the F&G Power Accumulator. I like the indexes that they provide.

The thing that turned me off was no Monthly interest crediting option. I don't understand FIA's very well, so maybe I am missing something, but I don't have the confidence to place the risk of my entire return for a year on an FIA on two points of market performance, so I continued looking for annuities that included a monthly option in their strategies.

have used Athene in the past (biggest annuity issuer is a nice sale point) but they have been picky about accepting stuff in surrender and comp isn’t as great.

For me as a consumer, The Athene MYG with a small purchase requirement - 3-5-7 years - looks great. Until I hit the age limits for purchase, it looks like a good place for periodic reinvesting of excess RMD money. I can't speak to your agent compensation concern for that product.

 

[Allen Trent]

Curious on which Annuity product/company people use most often as a go-to. Obviously every house is different and they have different needs but which one do people use the most and for what reason?
Most of my sales come off of concept selling safety and low fee ( around 1% or less if they're getting rate enhancement or glwb, ltc riders etc since if they’re managed money it’s definitely not an increase in fees and they’re actually getting something for it, not to mention if its coming from a VA) or no fee, with competitive returns (but stress you likely won’t keep up with the SP500 in long run for example because thats not what these are used for.)
With that being said looking to look into a few different companies that have competitive comp and good indexes/rates with alot of companies recently improving rates. As well as wondering what other people use in a house to their competitive advantage and finding good products for the client while still getting at-least a decent commission. For example Ive used alot of Sentinel past few years for good comp with on paper good back testing and PAR rates and an increase in cap rates with SP, but have heard some unpleasant rumblings about them recently. have used Athene in the past (biggest annuity issuer is a nice sale point) but they have been picky about accepting stuff in surrender and comp isn’t as great. Have looked into F&G they have a good bonus and comp but haven’t dived into their indexes yet.


Anyone have any recommendations to look into from what they like to use?

You are a compliance problem waiting to happen if what you put in this post is how you sell people on moving managed or VA money in surrender charge. You have to act in Best interest of consumer for non qualified money & actually owe them likely a fiduciary level on qualified retirement money under DOL

 

[scagnt83]

I don't understand FIA's very well, so maybe I am missing something, but I don't have the confidence to place the risk of my entire return for a year on an FIA on two points of market performance, so I continued looking for annuities that included a monthly option in their strategies.

The monthly strategies are based on a years return. They just calculate the yearly return using a monthly formula vs. a yearly formula. But a "monthly sum" is just the 12 moths added up. A "monthly average" are the 12 months averaged out.

To my knowledge, there is no FIA that locks in returns on a monthly basis. Returns are locked in on an annual or bi-annual basis. There are even some that lock in returns on a 5y or 7y basis.

 

[LostDollar]

To my knowledge, there is no FIA that locks in returns on a monthly basis. .

You are putting words in my mouth. I did not say that.

I merely said I wanted to find a plan that included a monthly interest crediting option in its interest crediting strategies.

The thing that turned me off was no Monthly interest crediting option. I don't understand FIA's very well, so maybe I am missing something, but I don't have the confidence to place the risk of my entire return for a year on an FIA on two points of market performance, so I continued looking for annuities that included a monthly option in their strategies.

 

[scagnt83]

You are putting words in my mouth. I did not say that.

I merely said I wanted to find a plan that included a monthly interest crediting option in its interest crediting strategies.

Your explanation was the issue I was addressing:

I don't have the confidence to place the risk of my entire return for a year on an FIA on two points of market performance, so I continued looking for annuities that included a monthly option in their strategies.

A monthly strategy is still placing the risk of return on two points of market performance. Its the monthly gains between point A & point B. Interest is credited and locked-in after 12 months. Your return is just as dependent on 2 points in the market as the ones labelled "Annual Point to Point".

So its still based on a 12 month period. Its just using a different calculation to figure the return for those 12 months.

And an Annual P2P is also using monthly gains to calculate the return. It is literally each months return, added up, then Capped at a certain amount.

Monthly Sum is the same thing, except the Cap is applied to the monthly gain instead of the annual gain. Still based on a 12 month period (ie 2 points in time).

Monthly Sum can do very well in a bull market. Monthly Average historically has done terrible compared to all the other crediting methods.

 

[Allen Trent]

Your explanation was the issue I was addressing:


A monthly strategy is still placing the risk of return on two points of market performance. Its the monthly gains between point A & point B. Interest is credited and locked-in after 12 months. Your return is just as dependent on 2 points in the market as the ones labelled "Annual Point to Point".

So its still based on a 12 month period. Its just using a different calculation to figure the return for those 12 months.

And an Annual P2P is also using monthly gains to calculate the return. It is literally each months return, added up, then Capped at a certain amount.

Monthly Sum can do very well in a bull market. Monthly Average historically has done terrible compared to all the other crediting methods.

I am guessing he is talking more like how IUL has 12 different buckets each year if you paid annual or dollar cost averaged compared to all the money being in 1 single bucket. IE: 100% of money having only 2 dates per year to compared the index starting & ending compared to 8.3% of the money each having 2 dates, thus 12 index checkpoints per year with 1/12th of the money. Ala, a bit of dollar cost averaging

 

[scagnt83]

I am guessing he is talking more like how IUL has 12 different buckets each year if you paid annual or dollar cost averaged compared to all the money being in 1 single bucket. IE: 100% of money having only 2 dates per year to compared the index starting & ending compared to 8.3% of the money each having 2 dates, thus 12 index checkpoints per year with 1/12th of the money. Ala, a bit of dollar cost averaging

Maybe. But not possible with most FIAs. You would need separate contracts.

Even a Flex-Premium FIA usually holds additional premiums in the fixed account until the Policy Anniversary.

 

[Allen Trent]

Maybe. But not possible with most FIAs. You would need separate contracts.

Even a Flex-Premium FIA usually holds additional premiums in the fixed account until the Policy Anniversary.

agree, I think that is why he is saying he cant find one. Just somewhat odd when IUL function that way. My guess is the options costs prohibit some of that.

With so many of the RILA annuities having a 3,5,7 year year period with only 1 check point at the beginning & end, I wonder how some of those will perform with so many bought the last 12-18 months at near top of the market. Could get interesting with some of the predictions about the markets looking similar to the flat times of 1964-1982

 

[scagnt83]

agree, I think that is why he is saying he cant find one. Just somewhat odd when IUL function that way. My guess is the options costs prohibit some of that.

With so many of the RILA annuities having a 3,5,7 year year period with only 1 check point at the beginning & end, I wonder how some of those will perform with so many bought the last 12-18 months at near top of the market. Could get interesting with some of the predictions about the markets looking similar to the flat times of 1964-1982

Yes, its due to the cost of maintaining so many options contracts. IUL charges fees against the premiums that compensate for that. FIAs do not.

That is a great question Allan. Considering that more and more carriers are offering that option (its not just RILAs), it gives me a bit of concern. Traditionally the worry has been on renewals. But that was in a falling interest rate climate. Now that rates are rising, will that really be as big of an issue? Or are people locking in what will eventually be lower rates now for 7 years when renewals end up being higher? Or just your concern of market timing... are they better off with resetting the calculations annually? Who knows.

The longer period lock-ins have become popular with agents.... but are they adding them because they are popular, or because they see them as more favorable to the carrier?? Again, who knows. You probably have a better angle on that than I do since you work in a HO.