iXray Annuities

Interest Rate Risk – Index annuities are not protected

Interest Rate Risk

I’m constantly surprised to hear top advisors who are so misinformed.  I hear again and again that fixed indexed annuities (FIA) do not have interest rate risk.  I was at a training in Las Vegas the first week of December 2016 and the from the front of the room, “FIAs are risk free… they don’t have market risk and they don’t have [interest] rate risk.”

I sat there shocked to hear this misinformation being promulgated by alleged “experts.”  When you are highly trained, as I am, you can spot the fallacies in people’s’ statements or claims.

Here is an article that confirms my view of these products being subject to interest rate risk.

Read the full article

Read the full article – look for ‘The performance of fixed annuity companies is most affected by interest rates and if rates rise “it’s not a good thing, it’s a great thing,” Kvalheim said.’  This is the third paragraph from the end.

As I drove to an appointment today it is predicted that the “Fed” will raise interest rates.  This will likely be a small increase, but it will have an impact on Fixed Index Annuities.

When you purchase Fixed Index Annuity – give thought to what you want to accomplish.  Do the guarantees alone satisfy what you are buying or are you also dependant on the index credits?  If you are dependant on the index credits you need to be aware of the company’s rate history and under what conditions can the company change its crediting caps, spreads and participation rates.

Second Opinion Option

Consider our second opinion [click for details] – you can keep your current agent.  For a fee we can evaluate the annuity you are considering.  Show you what works, where it might fall short and what we might suggest instead.  NOTE: payment is required before the analysis.  The fee for this service may be returned or applied to further financial planning if you purchase an annuity through us.

Why a fixed index annuity might be a good fit

Fixed Indexed Annuity Article

For starters, annuities are not right for everyone.  Variable annuities are almost never appropriate.  With that said, this post is about Why a fixed index annuity might be a good fit.

There are many resources on the Internet.  This one is an ad on a TV station’s website.  http://www.kvoa.com/story/32402529/fixed-index-annuities-right-for-your-retirement-plan.

The ad seems to be pretty legit.  It is however an ad.  Be careful when researching annuities and the comments you receive.  Some people swear by annuities and some people swear at them!  I’m neither – I look to see what the client needs, what are their concerns, what gaps exist and how to fill or close those gaps.  When people hear this – the feel reassured.

If you could see a plan that took your concerns and gaps into account, would that help you?

This ad that I am sharing talks about four aspects of Fixed Index Annuities.  1) locking in gains, 2) Growth for income, 3) protected from retirement challenges, 4) Your money lives on.

First of all – the ad is missing tons of disclosure and disclaimer.   The ad also makes or eludes to a promise “all”. In California all ads must include the producers California Insurance License – minor, yes.

Who is making the guarantees?

Who is Horter Investment Management and why are they mentioned?

Why a fixed index annuity might be a good fit

Why do I think a Fixed Index Annuity may be a good fit?  Similar points that the ad is making.  There are guarantees to these products.  The guarantee is backed by the strength and claims paying ability of the issuing insurance company.

Compliance – huge concern in my view.  There are so many people peddling product who don’t produce an actual plan.  We pride ourselves in producing plans that show our confidence or lack of confidence in your retirement.

If you would like a plan and not a product peddler – give us a shot!  Call our office or schedule a call here:  https://calendly.com/rickloek – I look forward to speaking soon.

Our office number is 408.459.8383

Evaluate Fixed Index Annuities

Fixed Indexed Annuities can be a great tool for your retirement.  The nagging question is if they are so good, why haven’t I heard of them before?  Great question.  How does one Evaluate Fixed Index Annuities?

First a question: When you visit a Buick dealership will they tell about the features of a Ford?  How about if you walk into an Chinese Food Restaurant, will they be featuring as their best dish an Italian Specialty?

When you meet with a Stock Broker will they be knowledgeable about life insurance products?  Will they refer you to an insurance specialist?

As you answer those questions consider that the opposite is also true – will an insurance only person refer you to an investment advisor?  NOTE: a Stock Broker and an Investment Advisor are similar, however the Investment Advisor must act as a Fiduciary.  This has not been the case with Stock Brokers – they are held to a suitability standard, until next year, 2017.

Sounds confusing?  It is!

Back to the matter at hand, Fixed Indexed Annuities.  Here is an article that covers advantages of Fixed Index Annuities.  The main concern almost everyone has is money or income.  The right Fixed Index Annuity can help address and even eliminate the concern about income for life.  In this article Income Riders are explained, including issues to consider.

Some articles falsely talk about the upside and ignore the downside.  This article seems to address a little of both.

With my background in Software Engineering, I use software to help determine what fits your needs.  Your concerns are #1.  What is the gap you have, how do we close that gap and is there a better way or is the fixed index annuity the best option?

Read the full article

Read the full article here, on Investors Business Daily.


Fixed Indexed Annuities were strong in 2015

Fixed Indexed Annuity were strong in 2015.

Jim Poolman is interviewed by Peggy Bresnick in this article on LifeHealthPro.com

Mr. Poolman is associated with an industry group that has a mission to educate the general public about the benefits of Fixed Indexed Annuities or FIAs.

In this Q&A session between Ms. Bresnick and Mr. Poolman we learn that the FIA industry has seen growth in 2015 and likely will do the same in 2016.  This is attributed to the baby boomers being conservative and that benefits of FIAs relieve stress and worry.  One feature that helps reduce the stress and worry of baby boomers is lifetime income.  With many of the FIAs available today you can add an income rider**.

An income rider typically allows for a guaranteed roll-up or interest rate on money intended solely for future income.  Essentially, at some point in the future you can tell the insurance company you want to start lifetime income.  The company will calculate your income benefit and start sending you regular income.  Somewhat like a pension, but not a pension.  Depending on the features available the income may continue to a spouse.  With so many income riders on the market, one must be careful to confirm the features work for their situation.

Looking to 2016

Mr. Poolman says that the organization he works for will continue to educate the media, regulators and of course the consumer.  There is misinformation about Fixed Index Annuities that needs to be cleared up.  There is also over use of these products.  There is a line in here somewhere that demonstrates a mix of protecting the consumer and providing benefits. That same line can lead an advisor*** astray by putting too much money into annuity products.


** Income riders come in a wide variety of features and fees.  Some are free, some cost money.  Please realize free simply means a lack of transparency on how you are paying for the feature.

*** advisor is general in nature.  To sell an annuity the advisor has an insurance license.


Fed Rate Increase good for Fixed Index Annuities

Fixed Index Annuities received good news this week.  The fed raised interest rates by .25%.  The increase might seem tiny at first.  When you begin to understand the underlying structure of fixed index annuities you will realize how important interest rates are.  Fed Rate Increase good for fixed index annuities – would you like to learn about the inner workings of fixed index annuities?

There are two types of annuitiesFixed Indexed Annuity Article

There are variable annuities and fixed annuities.

Fixed Annuities

Fixed annuities guarantee your investment, the actual premium you use to purchase the contract.

Variable Annuities

Variable annuities do not protect the actual principal or premium. Variable annuities have sub-accounts that are in reality mutual funds.  These products also have additional fees that are often hidden inside of the contract. If you own a variable annuity we can help you understand the inner workings.  Some people want to escape from variable annuities, we may be  able to help you do that.

If you have additional questions, please give us a call.  Mention you read about annuities on our iXray Annuities website.

Our phone number is 408-459-8383 or email me rick dot loek aht calrima.com <<trying to keep the bots from scraping my email>>

Read more about the impact of rate changes on fixed annuities

Fixed Indexed Annuity Article – USA Today

This fixed indexed annuity article is opening the door and some eyes.  However, there seems, from my perspective, much that was left on the editing room floor.

This makes my point, from the article: “But even though FIAs provide buyers with upside potential, these products are not securities, says Stan Haithcock, an adviser in Ponte Verde Beach, Fla., and the author of The Annuity Stanifesto. FIAs are an insurance product. “The unregulated sales pitch that is too often used is ‘market upside with no downside.’ Only half of that is true,” he says. “There is no downside, because it is a fixed annuity.””

Consider there is downside, I’ve seen it.  The reality is if an insurance agent makes a bad suggestion, the client can lose money.  There is risk, always.Fixed Indexed Annuity Article

Next, How the market index options are purchased and how the company “limits” the return is not how I understand how the products work.  While at a recent training from one of the largest producers of FIAs we learned that the minimal fixed rate interest (fixed account) is either where the contract owner allocates money or they choose the indexing method (or both).

The money that is not placed into the fixed account is not using that guaranteed money.  That guaranteed money is then used to purchase options on the index.  The way the options are purchased puts the burden to fulfill on the index credits on the option provider.  Any implied limits are not done by the carrier but by the system that provides the options & credits.

There are only 100 pennies in a dollar – how you use the pennies, now that’s where you have do your homework.  We’d support you in providing a second opinion, either for a fee or to potentially earn you business.

Read the full USA Today article – don’t believe it is all rosy there is more to learn before you purchase one of these products.

Jackson National Life Insurance Company

Jackson National Life Insurance Company has introduced a new income rider.  The income rider can be attached or added to their Fixed Index Annuity, the Jackson AscednerPlus Select.

For those who don’t yet know what an income rider is, it is a feature set that can be added to an annuity or may be integrated into an annuity.  This annuity I am speaking of is called a Fixed Indexed Annuity.  This is type of annuity protects the clients premium from market losses.  For the most part the only way a Fixed Indexed Annuity can lose money is by the owner surrendering the policy and incurring a surrender charge.  If a client has to surrender a policy it would imply that the original plan for the annuity may not have been solid or life’s challenges forced someone’s hand.

There is a full article for your consideration on MarketWatch.com

If you are considering an annuity or if you have already purchased an annuity, consider getting a second opinion.  We can provide an objective analysis of annuities, show the features that work for you and point out areas to be aware of.

Simply fill out the contact form below and we’ll get back in touch with you

Magic Johnson invests in EquiTrust

Magic Johnson invests in fixed index annuity company EquiTrustEquiTrust is an insurance company that, among other products, has Fixed Index Annuities (FIA).  Magic Johnson’s firm purchased a controlling interest in the company, EquiTrust.

Magic Johnson invests

I for one like that such a known figure as Magic Johnson invests in this industry.  Likely this will bring superstar index annuity purchases too.

Fixed Index Annuity

A fixed Index Annuity or FIA (formerly called an Equity Index Annuity or EIA) have characteristics where the consumer may participate in market upside and reduce if not eliminate market downside risk.  There are no hidden fees in FIA’s.  Variable annuities have sullied the annuity market by containing fees that are only exposed if you can read through the multi-page prospectus.  If you have a variable annuity we may be able to help you escape from it.  We know we can help you fully understand and expose the fees.

You can read an article about Magic Johnson’s investment in EquiTrust.

Lincoln OptiBlendSMProvides Control, Flexibility and Choice

annuities exposed
Free booklet on annuities

Accumulation and preservation of your principal.  Might you think this is a couple of benefits you would like with your retirement assets?

This product seems to offer what most want, an income rider that will allow for you, the owner, to have income for the rest of your life.  There are many products with income riders.  Your needs are not the same as the next person.  That is why we take great steps to help ensure your needs and interests are protected.

We enjoy seeing new products enter the market.  Creativity is key to our business.

Comprehensive Review

Read a comprehensive review of this Lincoln annuity here

Please note, this is not an offer to sell.  This is simply a brief review of a new product.  Should you be interested, please call 866-589-9366 toll-free and we will help you determine if this is a fit or should you consider other options.

Features of Indexed Annuities

These features of Indexed Annuities might include the following features and benefits, depending on your unique situation and goals:

Guaranteed* lifetime income (possibly better than you thought!)

…that can potentially be up to 100% tax-free (restrictions apply)

…for you and your spouse (duh!)

…with potential to increase with market upturns (Intrigued?  This is one of the best hedges against inflation)Features of indexed annuities

…but without exposure to market downturns (I’m intrigued, how can they do that?)

…with potential to double or even triple monthly benefits for qualifying “healthcare” conditions**

…plus you might leave money for your heirs***

…for less than you thought you’d spend (Hmm, not sure what the cost is, actually.  There is no fee to buy one!)

…and typically for .5-1% fee  (Income riders may assess a fee)

We’d welcome the opportunity to earn your business.  We don’t sell or share your information with anyone.  We *HATE* spam even more than you do.

Disclosures (more apply, depending on the product and state where the contract is signed/issued):
* Yep, you read that correctly.  What is the catch, disclosure would be the word.  This is subject to the claims paying ability of the insurance company.  This is NOT backed by any Federal Government Guarantees.
** Very restrictive in California.  Each state’s regulators approve or disapprove of these benefits, therefore what is available in your state will vary by product and company.
*** Frankly, we focus on you, not your heirs.  If planning for your heirs is important, let us know and we can locate the best option for you and your heirs.