Best Growth Annuities For 2015
Companies are offering a number of fixed indexed annuities with uncapped strategies for 2015. Given the similarities between the various uncapped options it can be hard to tell which companies are offering the best growth annuities for 2015. Although the options with uncapped growth annuities seem endless, they all are relatively similar. The key if identifying the common components of indexed annuities and comparing them between the companies. A list of the key areas is provided below.
1-Which index do they use?
This is very important as some of the companies us the S & P 500 which offers strong growth potential while others use the S & P 500 Risk Control 5% or some other risk control account which limits growth opportunities. If the index does not perform well in a strong market, your client will never see any substantial gains.
2-How much of the invested money actually participates in the given index?
This is critical. Because a well performing index is not much of a benefit if you receive a 20% participation rate.
3-Is there a fee or spread and what is the current rate for these investments?
In general, a spread is preferable over a fee for a number of reasons. (That I will get into in a different blog) If a company has a 3% spread each year and uses the S & P 500 Risk Control 10%, it is going to be tough for the client to capture reasonable gains.
4-What is the renewal history?
Most of the strategies rely on 1-3 year point to point crediting on the uncapped option. One year is preferable over two or three. As a result, they can change the percentages and rates above at renewal. It is wise to look at the companies renewal history. This will help you to avoid someone that substantially lowers participation or increases spread or fee at renewal.
In general, AIG, Security Benefit, Annexus as well as Americo Libertymark are all offering some of the more competitive uncapped options. Although, it is important to look at the current rates prior to making any decisions. You can either call our office at 203-796-5403 or email us at Admin@croweandassociates.com with any questions.