Displaying items by tag: fixed index annuities

(New York)

Fixed index annuities can be an ideal investment if you are looking for a mix of upside gain and downside protection. Many annuities in this category allow a range of choices that mean investors can get much of the upside of an index and still combine it will downside protection. A couple good examples include Lincoln National’s OptiBlend 5 and Delaware Life Insurance Company’s Retirement Stages 7 Fixed Index Annuity. For instance, Lincoln’s offering allows investors to choose exposure to the S&P 500 or the Fidelity AIM Dividend Index and holders can change their allocation each year. Holders can receive a percentage portion of the upside of each index (i.e. up to 35% from the S&P 500 and up to 89% of the AIM Dividend Index).

FINSUM: FIAs can provide a nice mix of benefits and peace of mind, but it is key to remember that the cost of that protection can be quite high.

(New York)

Fixed index annuities had a really rough time in the year or so leading up to the debut of the first Fiduciary Rule. The DOL’s changes all but made the product extinct. However, since the rule was struck down, fixed index annuities have made a resurgence, posting their biggest ever quarter for sales with $20 bn in Q2 this year. The good news for brokers is that changes in the government’s regulatory approach means that fixed index annuities will now be treated like an equity product, which means they will be under the SEC’s purview. Additionally, a new kind of FIA has been developed—fee-based—which means brokers and advisors have a choice between a fee-based product or a commission-based one.

FINSUM: The big question for FIAs is how to do a best interest comparison between the fee-based and commission-based versions, as the cost changes depending on time and other factors.