The Security Benefit Total Value Annuity is a unique product in the fixed indexed annuity business. The product uses innovative funds and offers unlimited growth potential without the risk of loss due to declining market conditions. It is obvious to see why this annuity is taking in money at unprecedented rate. Here, we will break down the product and provide the strengths and weakness instead of relying on hype and catch phrases.
Product Basics- The base of the annuity is the same as most other fixed indexed annuities. They have a 10 year surrender schedule, 10% free withdrawls per year, 7% or 8% bonus depending on the state you purchase it in and the usual income and death benefit riders that everyone offers. The base benefits are all standard for the industry but the crediting methods on the account value are what stand out for this product.
ATVI- The ATVI is one crediting method in this product which is unique. The account uses a futures commodities index. The idea behind the index is that the account performance is non correlated to the market. This means the accounts performance will not follow the performance of the stock market. A brochure of the ATVI is available in this post. Total Value Annuity ALTVI explained 2013 The account runs on a 5 year point to point basis. Interest is credited to the account value using a 5 year vesting period. At the end of the 5th year the money can be re allocated to different accounts if the client chooses. It should be noted that any money put into the ATVI must stay in the account for 5 years. It can not be reallocated prior to that. The is not an annual reset on this strategy but the gains are uncapped on this product leaving the opportunity for substantial growth over 5 years.
TVBI- The account functions in the same manner as the ATVI. (5 year point to point, 100% of gains, etc….) Note: there is a .50% annual fee/spread on this option. Unlike the ATVI, this account uses the Transparent Value Large-Cap defensive index which consists of 100 stocks from the Down Jones large cap stock market index. It blends this account with a 2 year US treasury futures index. The gains are uncapped after the .50% annual spread which gives this account a unique prospect for growth over 5 years. Security Benefit TVBI explained
Income Rider- The income rider on this product provides for a base 4% minimum growth on the income per year with any gains from the crediting methods stacked on top. Overall, this rider compares well with its competitors but it is unlikely to out perform the Security Benefit SIA annuity income rider. CLICK FOR INFO ON SECURITY BENEFIT SIA ANNUITY
The growth prospects on both account compare favorably against its competitors given the low annual caps in the market today. It is possible to allocate any percentage of the annuity account value both accounts. There are other more standard account crediting methods available as well but the caps on them are similar to those of many other annuities in the market. The TVBI and ATVI are what make this product stand out compared to the rest.