We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!


media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us


Close [x]

Industry News


  • Industry Articles (20,719)
  • Industry Conferences (4)
  • Industry Job Openings (2)
  • Moore on the Market (394)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (791)
  • Wink's Articles (338)
  • Wink's Inside Story (280)
  • Wink's Press Releases (118)
  • Blog Archives

  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • May 2008
  • February 2008
  • August 2006
  • Response: Finance Guy: Equity indexed annuity

    November 1, 2010 by Sheryl J. Moore

    Setting It Straight with News 8 Austin

    ORIGINAL ARTICLE CAN BE FOUND AT: Finance Guy: Equity indexed annuity

    Dear Mr. John Henry McDonald,

    Good evening. I am the foremost authority on indexed life and indexed annuity products. I am also an independent market research analyst who specializes in the indexed insurance markets. I have tracked the companies, products, marketing, and sales of these products for over a decade. I used to provide similar services for fixed and variable products, but I believe so strongly in the value proposition of indexed products that I started my own company focusing on IAs and IUL exclusively. I do not endorse any company or financial product, and millions look to us for accurate, unbiased information on the insurance market. In fact, we are the firm that regulators look to, and work with, when needing assistance with these products.

    I recently had the occasion to view a segment and read an article that was published at News 8 Austin, “Finance Guy: Equity Indexed Annuity.” While your efforts to provide information to your readers are to be applauded, this article was surprisingly inaccurate. Such misinformation reflects poorly on the News 8 Austin news organization, so I am contacting you, to ensure that you can make appropriate corrections to this article and have a reliable source for fact-checking in the future. Note that I have also submitted this correction to the editors at News 8 Austin, so as to avoid such inaccuracies in a public forum forthwith.

    First of all, Mr. McDonald, indexed annuities have not been called “equity-indexed annuities” by those in the insurance industry since the late 1990’s. The insurance industry has been careful to enforce a standard of referring to the products as merely “indexed annuities” or “fixed indexed annuities,” so as not to confuse consumers. The insurance industry wants to make a clear distinction between these fixed insurance products and equity investments. The interest potential of these products is limited, unlike equities investments. In addition, it is the safety and guarantees of these products which appeal to consumers, particularly during times of market downturns and volatility. Your help in avoiding any such confusion is so greatly appreciated. Thank you.

    Secondly, I am sorry to say that you must not have read the policy that you had in your hands. Had you, you would have seen that there is no stated rate of return because indexed annuities’ returns are tied to the performance of an index, such as the Standard and Poor’s 500 index. The policy you had should have listed the limit on any potential interest that were to be earned (via a cap or participation rate). If you need assistance understanding these features, please let me know. However, the overall message that I want you to understand is that an indexed annuities’ earnings cannot be determined in advance. Most indexed annuities credit interest every year and the interest earned is determined at the end of each one-year period. Generally, if the market index declines over a one-year period, the purchaser earns zero percent interest. If the market index increases, the annuity purchaser earns interest (based on this growth), subject to a limit.

    I’m also sorry to report that it appears that you did not understand the 8% guaranteed interest on the policy. The 8% is not a guaranteed annual return. The 8% guarantee is credited to a secondary account, which is only available when the purchaser decides to begin taking income payments for life; this income account value is not available upon cash surrender. This 8% rate is credited every year that the purchaser defers taking income payments from the policy, under an optional benefit known as a Guaranteed Lifetime Withdrawal Benefit (GLWB). You also misunderstood the fee on the GLWB. Although it is guaranteed to never exceed 1% annually, the current charge for the benefit is only 0.60% annually.

    GLWBs provide fixed and indexed annuity purchasers with an alternative to annuitization. Annuitization is the number one benefit of purchasing an annuity: having a guaranteed income that will be provided regardless of how long the purchaser lives. And while annuitization will usually provide a greater payout over the client’s lifetime of income payments, GLWBs provide for flexibility in income payments. In fact, annuitization is often referred to as “annuicide,” simply because the annuitant cannot stop/re-start their income payments if necessary, much less change their income payment amount. Hence, the most valuable annuity benefit is rarely utilized. However, with a GLWB, the client retains all of the benefits and flexibility of the contract, while also having the option to change the income amount. In essence, annuity purchasers are paying for flexibility when they elect a GLWB on a fixed or indexed annuity.

    It is important to note that not all indexed annuities offer GLWBs. These benefits are offered by 21 of 39 companies that offer indexed annuity products today. You should also note however, that only one company offers an 8% guaranteed rollup on their GLWB with a maximum 1% charge for the benefit. You grossly misrepresented this company’s products. As a top provider of indexed annuities, I believe that you owe this insurance company a correction to your article; not to mention the thousands that read your work.

    Most importantly, I would like to bring your attention to the fact that indexed annuities do not have fees, Mr. McDonald. The only “fee” that may be charged on any fixed or indexed annuity would be for one of few optional benefits that are available (in addition to the base policy), such as a GLWB. Indexed annuities, in and of themselves, do not have fees. I am incredibly disturbed that you would allude that any indexed annuity could “cost a small fortune.” It takes little research on the internet to find that indexed annuities have no explicit costs. Your statements have misled the viewers and readers at News 8 Austin. A correction to this article is most definitely warranted in order to maintain your journalistic integrity in light of these comments.

    The reason that the brochure in question did not mention “the rate of return that one would receive at the end of 10 years when it was time for a payout” is because the rate/amount is dependent upon several factors:

    1. What is the value of the income account value, at the time that income payments are elected?
    2. What is the age of the annuitant at the time that income is elected?
    3. Have withdrawals of the cash value been taken, prior to the election of income payments?
    4. Have withdrawals in excess of the annual penalty-free amount been taken from the cash value, prior to the election of income payments?
    5. Has the account value ever exceeded the income account value?

    So you see, the absence of a rate was merely because of these other variables. You should find a clear explanation of these variables in the brochure that you were provided with, however. You should also know that at the time the client begins considering taking income under their GLWB, the income payment amount is quite easily made available to them. In fact, I could provide you with numerous hypothetical examples. However, the company that issues that annuity needs to protect themselves from making such hypotheticals publicly available, as they may never come to fruition if the client takes excess withdrawals, elects income early, or has poor performance on their annuity’s indexed gains, etc. etc.

    I would be happy to sit-in on a teleconference with you, along with a filing reviewer from the Texas Department of Insurance, should you need. I work regularly with the National Association of Insurance Commissioners (NAIC, a regulatory organization that the Texas commissioner is a member of), when it comes to indexed insurance products; particularly indexed annuities. Should your department require a referral, I am certain that Susan Voss, the insurance commissioner of Iowa, or Jim Mumford, the Iowa Deputy Insurance Commissioner could oblige. Precisely 41.59% of all indexed annuity sales are made via Iowa-domiciled insurance companies. For this reason, I work closely with this state and these commissioners can vouch for my expertise. In the interim, you need to let your readers and viewers see a balanced perspective of indexed annuities; they have been done a great disservice with this article. What they NEED to know is that indexed annuities have many benefits, including (but not limited to):

    1. No indexed annuity purchaser has lost a single dollar as a result of the market’s declines. Can you say the same for variable annuities? Stocks? Bonds? Mutual funds? NO.
    2. All indexed annuities return the premiums paid plus interest at the end of the annuity.
    3. Ability to defer taxes: you are not taxed on annuity, until you start withdrawing income.
    4. Reduce tax burden: accumulate your retirement funds now at a [35%] tax bracket, and take income at retirement within a [15%] tax bracket.
    5.  Accumulate retirement income: annuities allow you to accumulate additional interest, above the premium you pay in. Plus, you accumulate interest on your interest, and interest on the money you would have paid in taxes. (Frequently referred to as “triple compounding.”)
    6. Provide a death benefit to heirs: all fixed and indexed annuities pay the full account value to the designated beneficiaries upon death.
    7. Access money when you need it: fixed annuities allow annual penalty-free withdrawals of the account value, typically at 10% of the annuity’s value (although some indexed annuities permit as much as 20% of the value to be taken without penalty). In addition, 9 out of 10 fixed and indexed annuities permit access to the annuity’s value without penalty, in the event of triggers such as nursing home confinement, terminal illness, disability, and even unemployment.
    8. Get a boost on your retirement: many fixed and indexed annuities provide an up-front premium bonus, which can provide an instant boost on your annuity’s value. This can increase the annuity’s value in addition to helping with the accumulation on the contract.
    9.  Guaranteed lifetime income: an annuity is the ONLY product that can guarantee income that one cannot outlive. 

    If I can ever be of assistance to you in your efforts to fact-check similar articles in the future, please do not hesitate to reach out to me. Until then, I look forward to seeing a correction to this article. 

    Thank you.

    Sheryl J. Moore

    President and CEO




    (515) 262-2623 office

    (515) 313-5799 cell

    Originally Posted on November 1, 2010 by Sheryl J. Moore.

    Categories: Negative Media