by GarySpicuzza » Thu Oct 23, 2008 10:03 am
Are Fixed Indexed Annuities SAFE?
Yes.
Today's extremely volatile markets underscore the growing demand for products like fixed indexed annuities.
While many Americans lost a significant portion of their retirement savings during the recent market downturn, none of Aviva's Fixed Indexed Annuity policyowners have lost any principal or credited interest.
The graphic below illustrates how interest is credited in a Traditional Fixed Annuity and a Fixed Indexed Annuity. The absolute worst thing that happens in a flat or down market is a 0% interest credit with ALL principal and previously credited interest SAFE and sound.
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Yes.
Today's extremely volatile markets underscore the growing demand for products like fixed indexed annuities.
While many Americans lost a significant portion of their retirement savings during the recent market downturn, none of Aviva's Fixed Indexed Annuity policyowners have lost any principal or credited interest.
The graphic below illustrates how interest is credited in a Traditional Fixed Annuity and a Fixed Indexed Annuity. The absolute worst thing that happens in a flat or down market is a 0% interest credit with ALL principal and previously credited interest SAFE and sound.
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Posted: Thu Oct 23, 2008 10:27 am Post Subject:
I gather from your earlier posts that Variable Annuity plan isn't a good option for senior citizens. However, if one is asked to make a choice between Fixed annuity and Fixed Indexed Annuity, which one will suit better to the needs of the senior people?
Posted: Fri Oct 24, 2008 12:00 am Post Subject:
Simon Variable Annuities violate the fundamental aspect of SAFETY OF PRINCIPAL inherent in ALL annuities EXCEPT Variable Annuities.
They are a stock broker product sold by Certified Clueless Clowns who can't find their assterisk with both hands. It takes about 20 seconds to actually determine a client's risk tolerance and it goes something like this:
1) Put all of your money in a bucket of $100 dollar bills.
2) Now, one at a time, start removing the $100 dollar bills and light them on fire.
3) Repeat until you are no longer willing to burn up any more $100 dollar bills.
4) That's your risk tolerance and is the MAXIMUM amount of money you should have at risk in the market.
5) How many $100 dollar bills would you burn up BEFORE you stop?
6) If your answer is zero, then you have no business investing in the stock market.
A 25% loss of principal in one year requires a 47% gain the following year just to keep even with a SAFE investment that's just limping along at 5% per year.
The market right now is down about 40%, that type of loss requires a 75% gain next year to just to keep even with a SAFE investment that's just limping along at 5% per year.
As far as determining suitability between a Traditional Fixed Annuity or a Fixed Indexed Annuity it depends on the individual client circumstances.
Sorry for the rant but I got on a roll!
Posted: Fri Oct 24, 2008 02:35 am Post Subject:
Also, Insurance companys are regulated by each State DOI that they do business in. All State DOI's require reserves. This is money invested in very safe Bonds/govt securitys etc. They are regulated even more that FDIC banks.
Scott
Posted: Fri Oct 24, 2008 07:49 am Post Subject:
Also, Insurance companys are regulated by each state Dept of Insurance that they do business in. All State DOI's require reserves. This is money invested in very safe Bonds/govt securitys etc. They are regulated even more that FDIC banks.
Exactly.
That's why it's comical the SEC wants to "regulate" fixed indexed annuities that are already state regulated.
Perhaps Chris Cox and the SEC should take a real hard look at fixed indexed annuities and contrast them with the 40% loss on Wall St. vs NOT one penny lost in a fixed indexed annuity then try to determined the difference between an insurance product vs an investment in at risk securities.
Posted: Mon Nov 10, 2008 08:58 pm Post Subject: I resent the fact...
That the insurance companies are forced to put a disclaimer on the brochures and paperwork of the FIAs that says..."may lose value". I believe that's not accurate. I have never had someone come in and buy a CD and at the bottom it said "may lose value". Because all they are referring to is taking it out too early and incurring a surrender charge.
Trae
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