Confessions of an Indexed Annuity Purist
April 11, 2023 by Scott Stolz
When I began to urge advisors to consider incorporating fixed indexed annuities into their practice back in 2006, I highlighted the importance of keeping the story simple. Specifically, I stressed the need to be able to answer the question: “How did the insurance company calculate the interest they credited to my policy?”
To answer this question, I offered a simple solution: stick with one-year cap strategies based on the S&P 500 (SPX). Why needlessly complicate things?
Wink’s Moore on the Market:
It got me SO worked-up! I had ALL the comments in my email to him.
***Many of these comments will be reserved for he and I’s private email.***
However, I am interested in YOUR thoughts.
I will kick-off the convo with just ONE of my nearly-a-dozen comments:
“I am surprised to see you endorsing the idea of paying a fee for potentially greater indexed performance. The client is always going to pay that fee, and in some years will receive a negative adjustment to their cash values. Will these strategies actually produce results that are any better than a non-buy-up strategy? And let’s not mention the renewal rate history [of these companies]…” -sjm