MYGA Fixed Rate Annuities
Current Rates As High As
2.35%
3 YR 
3.00%
5 YR 
3.10%
7 YR 
3.20%
10 YR

Maximizing Your Investments With Fixed Indexed Annuities

Fixed Index Annuity

“Got guarantees?” should be the annuity industry's mantra to words because that's what they are. They're contractual guarantees. They're transfer of risk products, period.

If you're a living, breathing, human-being with a bank account, then you're probably going to get pitched an indexed annuity by somebody because it's a good story. However, the reality is a little different than some of the pitches you might hear and we're going to go through all of the indexed annuity, good and bad. At the end of the day, you're going to get the truth and find out if they make sense for your specific situation.

In the past, Indexed Annuities were called equity index annuities, but they can't say equity index annuities anymore. Why? Because they are not securities. Fixed index annuities are life insurance products and they are approved at the state level. In order to sell them, you have to have a life insurance license to sell a fixed index annuity.

Originally, Fixed Index Annuities were put on the planet in 1995 to compete with CD returns. I know you hear market upside with no downside market participation, all that stuff, and that's fine. But historically the returns are in the CD return level and that's what they were designed to do. Indexed annuities are a fixed annuity, so your principal's protected, but the gain part of it, the accumulation value part of it is attached to what's called a call option. Meaning you're betting that the markets are going to go up. Typically, that call option is attached to an index like the S and P 500, but what you need to know these indices index, like the S and P 500 does not include dividence. That is a big deal because over 50% of the returns of S and P are dividend based. So in essence, you're saying, "I believe from contract anniversary date to contract anniversary date with most of the contracts, it's going to go up. And if it goes up, I'm going to capture a portion of that gain."

You also need to know that the gains are calculated at their discretion, which is not always bad, but just something you need to be aware of. Sometimes their renewal rates on these products aren't as good as you might expect. Also, it's a high commission product as compared to some of the more simplistic annuities out there so a lot of the newer people, or people that aren't really educated about annuities as a whole, push this one product as a one size fits all. It's not a one size fits all at all.

Fixed Index Annuities were put on the planet in 1995 to compete with CD returns.

So are index annuity is a good investment? Maybe. The benefits to me include that the gains portion, that index option portion, does lock in permanently. If you have a one-year option it locks in after the one year. A lot of the products are different so you can't make a carte blanche statement on how they all work. The other thing I think is good about the fixed annuity is you're not going to lose any money because it's fixed. I really like using a fixed index annuities for a very efficient and low cost delivery system for income riders and income riders are attached benefits to a policy that you can use for future income.

I think a lot of the limitations on the index annuity story comes down to how they're pitched and how they're sold. Most of the problems we're running into in the industry has to do with how agents and advisors are promoting them as almost too good to be true products. In reality they're CD products. You can attach an income rider, but at the end of the day they're contracts. So it's not too good to be true.

So just as a safety measure for you as the consumer, what I would do is if you're getting pitched an index annuity is write down everything that agent says, the way you understand it and have them sign off on it, you sign and date it, have them sign and date it. You have to be careful and take what you're going to hear with a grain of salt. After you click the subscribe button, which is your first step, step two is you go to the more info button underneath me, click that there'll be a drop down and you'll see all kinds of stuff. Look for the one that has a link to the books. It'll take you to a page where you can fill in your shipping information and we can ship you those books in about seven to ten days you'll get this book. In fact, we might ship you the other ones. I'm not sure what we're doing now. We might be shipping all the owners manuals, but at least you'll get this one. And then if you want to index annuity quote, you can contact us at stantheannuityman.com for everything annuity. I am licensed in all 50 states. See you next time.

Never forget to live in the reality, not the dream with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.


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