When it comes to generating guaranteed income, Security Benefit has had the highest paying deferred income product on the market for two years with the Secure Income Annuity. The Secure Income annuity has simply provided the highest payout to clients looking for future income.
With the release of their new product called the “Total Value Annuity” they are taking a different approach. While the Secure income annuity provided the highest income payout, it did not offer any additional features that someone may be looking for. So how does the new “Total Value Annuity” stack up with the “Secure Income Annuity”? Here is a review
Income- The Total Value annuity provides a 10% bonus on premium and then will roll up income payments at a guaraneed minimum of 4% compound per year. The payouts in year 1 are comparable to those provided by the Secure Income annuity in the fist year. (The older Secure Income Annuity starts to payout substantially more as you defer income for multiple years however) It also provides the potential for higher payouts by using a stacking feature. This feature allows any market based gains to be added on top of the 4% minimum in any given year.
Which is better?- The older “Secure Income Annuity” simply offers guarantees that the new product can not match. While the new version gives potential for greater income gains, it can not guarantee them for income planning purposes. The “Secure Income Annuity” clearly wins when it comes to income.
Death Benefit– The old Secure Income product only guaranteed the account value as a DB. The new product provides a 10% bonus and a guaranteed DB roll up of 4% compound to the payout per year. It also allows for any gains to be stacked on top of the 4% minimum. This option will be very appealing to those who want to leave as much qualified money as possible to heirs without the Required Minimum Distributions eating away at the account balance. This provides a substantial guaranteed Death Benefit and is a huge advantage over the old product.
Which is better?- New product is a huge improvement over the old product and offers one of the best Death Benefit options available
Potential for Account Value Gain- The Total Value Annuity offers the same accumulation accounts as the old product with an annual point to point account capped at 3% per year and a fixed account at 1.25% per year. The big difference is in the ALTVI account. The TVI (Called the Trader Vick) is a diversified futures account created by RBS. The account is run on a 5 year point to point with 100% of gains credited to the accumulation value after 5 years. In normal english, you put money in year 1 and then at the end of year 5 you get any interest gains.
This allows for much greater growth potential than can be achieved with the conventional fixed indexed annuity. The gains are also stacked on top of the guaranteed 4% annual growth of the death benefit rider or income rider if they are chosen.
Which is better?-The new product clearly offers big advantages with accumulation growth.