Blog

Security Benefit is offering a special product that offers unlimited gains without risk to principal.  All fixed indexed annuities offer the ability to grow assets without risk to principal but they all have limits on upside potential.  Some cap the growth potential on an annual basis while others only pass a percentage of the growth to the client.  The Security Benefit Total Value Plan changes all of this.

The total Value offers income riders and death benefit riders and even throws in an 8% bonus. A number of products offer the same benefits however.  What makes the Total Value unique is that the accumulation account uses the TVI index and provides 100% of the gain on a 5 year point to point strategy.  In other words, you put money in on day 1 you get 100% of any gain in the index 100% vested at the end of year 5.

The TVI index is constructed of 24 highly liquid futures contracts across physical commodities , global currencies, Energy, Grains, Precious Metals, Industry Metals, Softs (Cocoa, Coffee, Cotton, Sugar) and live stock.  Principal on this contract is 100% guaranteed which allows the contract holder to be more aggressive with the TVI account without worrying about losing a nest egg.  For more info on the TVI  click here

Historic results show the worst 10 year average annual return has been 5.08% per year (This does not include the 8% bonus) while the best 10 year average return has been 8.99% (This does not include the 8% bonus)

The product has been available for about 4 weeks and has taken on an unprecedented amount of assets already.  The downside is that Security Benefit has a limit of assets it wants to take on and will close this product to new money once the hit the threshold.

TVI explained doc

TVI performance

If you want more information, please email Edward Crowe at Edward@Croweandassociates.com or call 203-796-5403

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.