The Security Benefit SIA annuity is one the highest income paying indexed annuities available. This product should be one of the first choices for clients that need guaranteed future income from an indexed annuity. The account crediting methods on this product are nothing out of the ordinary but the amount of income it can produce puts it in a unique class.
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.
Apollo Global Management is setting the table to make a major move in the indexed and fixed annuity market. Apollo owns Athene Annuities (an up and coming annuity company), recently purchased Presidential Life and now has purchased Aviva USA. These moves should allow them expand on the limited number of states they currently offer annuity products in.
It looks like Apollo is setting the state to become more aggressive with product offerings and innovative products in the fixed annuity segment. While the overall annuity market in the US has slowed down over recent quarters, the fixed indexed and fixed markets continue to grow. A slew of companies have jumped on the band wagon and now offer fixed, indexed or Deferred Income annuities but they have not been able to meet the innovation or guarantees of the Guggenheim companies products. (Security Benefit and Equitrust products)
Hopefully, Apollo will be introducing new products in order to provide some solid alternative to Security Benefit and Equitrust. Time will tell.
Security Benefit has had the annuity with the highest income payout for the last two years. Anyone looking for future income from a deferred annuity would be able to get the highest payout using the SIA product.
One of the drawbacks to this product has been that it is not available some states, Connecticut being one of them. This means that a person living in Connecticut could not have access to the product unless they signed all the documents while in a state that the product was approved in. Security Benefit has now obtained approval for the SIA to be sold to residents of Connecticut. Read more
Security Benefit has had the annuity with the highest income payout for the last two years. Anyone looking for future income from a deferred annuity would be able to get the highest payout using the SIA product.
One of the drawbacks to this product has been that it is not available some states, Connecticut being one of them. This means that a person living in Connecticut could not have access to the product unless they signed all the documents while in a state that the product was approved in. Security Benefit has now obtained approval for the SIA to be sold to residents of Connecticut.
The products bonus is smaller in CT at 2% but the bonus of a product really does not mean much when it comes to the bottom line. The SIA product with a 2% bonus will stay pay a larger future income than any other income product and this includes all the big names such as NY life, Allianz, Met Life, Aviva, NorthWestern Mutual, etc…..
Compare the attached income quote to the same quote from any other company to see what I mean. This is an illustration for a 60 year old male who puts $200000 in the SIA product and takes income in 15 years at age 75. Security Benefit will payout $36,585.00 a year at age 75. The payout number is guaranteed. Compare this payout to any other companies guaranteed payout and you will see the difference.
Security Benefit SIA 60 year male 200K example
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 Read more
What is the best annuity? The answer is that there is not a best annuity for every situation. The trick is to find out the best one for whatever you are trying to accomplish.
Companies compete bitterly with each other in the annuity market. They are always trying to come up with an annuity product that will be the next big seller. While they want market share, they are never willing to offer a product that is the best in every category. Instead, they will pick one area within a product and try to be the best in that space. Read more
There are more people than ever looking to use a lump sum of money to create a guaranteed future income stream. Fixed Indexed annuities are usually the most predictable way to do this and they also offer the highest future guaranteed life payouts.
As a result, there are a number of companies offering these types of products and there are even more people selling them. This includes brokers, insurance agents, CPA’s and CFP’s. The fact that they put their clients in anything other than the Security Benefit Secure Income Annuity is disturbing. Why do I say that? The reason is that the Security Benefit product has the highest guaranteed payout. Simply put, they pay a higher income payment than any other company. There is not a trick to the comparison. Its very simple, if you give a company an amount of money, how much will they pay you as an income stream at a future date? Security Benefit always wins. Read more
There are more people than ever looking to use a lump sum of money to create a guaranteed future income stream. Fixed Indexed annuites are usually the most predictible way to do this and they also offer the highest future guaranteed life payouts.
As a result, there are a number of companies offering these types of products and there are even more people selling them. This includes brokers, insurance agents, CPA’s and CFP’s. The fact that they put their clients in anything other than the Securit Benefit Secure Income Annuity is disturbing. Why do I say that? The reason is that the Security Benefit product has the highest guaranteed payout. Simply put, they pay a higher income payment than any other company. There is not a trick to the comparison. Its very simple, if you give a company an amount of money, how much will they pay you as an income stream at a future date? Security Benefit always wins.
If a client is using a different company to create future income, they are not getting the best payout available. Most often this is because the client or the advisor they use are not familiar with Security Benefit. Other times, it relates to the fact that the advisor is not contracted to sell the product.
A Security Benefit illustration is attached. Security Benefit SIA example 100K 59 yr old This is an illustration for a 59 year old male, investing $100,000 and turing on income at age 65. The guaranteed payout is $8,914 per year for life. Challenge your broker, financial planner or insurance agent to find a higher payout. I promise you they will not fine one.
* Be aware that Security Benefit has two similarly named products. The Secure Income Annuity has the highest payout. The Total Value Annuity does not pay out as well but is very unique in its own right but for different reasons. For more information on the Total Value Annuity click here.
Call Edward Crowe with questions or concerns at 203-796-5403 or by email at Edward@Croweandassociates.com
Life Income annuities have been around for a long time. The concept is straight forward. You hand over a lump sum of money to the insurance company and they show you how much they will pay as income for the rest of your life. There are a number of payout options such as a “Straight life payout” (They pay the money until you die), “Life pay with return of premium” (They pay for life and will pay any unused portion to a beneficiary if you die too soon) and a number of other options as well.
Life pay annuities are valuable when used in the right situation. They can provide guaranteed income and are not subject to market fluctuation. In other words, you can rely on the payout no matter what. Wikipedia has a very good article on life pay annuities that is worth reading (click her for Wikipedia article) The only real drawback to the life income annuity is that you are giving up control of the lump sum asset. Other lump sums should be maintained in the event it is needed.
In many cases, clients can obtain a better payout by using an indexed annuity with an income rider. This approach always works better when someone is willing to wait a few years before starting income. Using an income rider will allow you to know exactly how much income you can have at a future date such as 2, 5, 10 even 20 years down the road. We always use the company that has the highest payout at the time and currently Security Benefit is the one paying the most. They win in almost all payout scenarios. Click Here for Security Benefit Info This option also allows the client to maintain access to the lump sum investment which can have advantages over the traditional life annuity.
If a client is looking for immediate income, the traditional life annuity will often have the highest payout. Given that insurance companies are constantly competing with each other to have the highest payout, it is prudent to check the market to make sure you are getting the highest payout possible.
Call (203-796-5403) or email Edward@Croweandassociates.com if you have additional questions or would like to obtain information or quotes.
With licensed sales professionals in both the investment and insurance fields, the experienced and knowledgeable team at Crowe & Associates can tend to your various needs.
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