Everyday on the World Wide Web there are articles telling potential consumers why fixed index annuities (FIAs) are not right for them, but that they should look at purchasing stocks, purchasing bonds, or mutual funds instead because of their potential returns. Some are just misleading - others are outright LIES! As a company that sells FIAs, let’s take a look at some facts that cannot be disputed. (check out the free download "Annuities Exposed".)
An FIA is an insurance contract, not an investment. Annuities are long term vehicles (3 yrs +) that offer tax deferral, a variety of income options, and a death benefit. Stocks, bonds, and mutual funds are investments.
FIAs should be judged on the merits of the unique features they offer:
Locked-in Interest: An FIA’s indexed interest is locked in each year by a feature called annual reset and can never be lost due to a market downturn. In other words, any indexed interest the client earns is protected and not just a number on a statement.
Timing: Whether or not you know exactly when you’ll retire, you can't predict how the markets will be performing at that time. For example, the S&P 500 index was negative four times over the past 10 years. What if you decided to retire during one of those negative years? As I stated above, with an FIA, the accumulation value will never decrease due to market volatility. This means when you choose to start taking income from the contract, there is a 0% chance you will have lost any earned interest due to changes in the market.
Lifetime income: Annuities can do one thing no other retirement planning vehicle can do: provide guaranteed lifetime income. Regardless of what strategy or formula is being used, an annuity is the only retirement vehicle that will guarantee a consumer they will never outlive their retirement savings.
Long Term Care riders: Many companies offer a variety of help for Long Term Care with NO underwriting. There are a couple companies that will DOUBLE your income for as long as your in a nursing home until you die EVEN IF THE ANNUITY BALANCE GOES TO ZERO!
Reasonable Interest Returns: You may have heard your broker or some other pundit quote the market average earnings as 7-12% or some other number. You can Buy Government Bonds, Corporate Bonds, Tax Free Bonds, Zero Coupon Bond and Sovereign Gold Bonds.
There are actually too many variables to determine a good average; years you look at, what stocks you're in, whether you're savvy enough to manage your own accounts or do you rely on someone else and how good he is. What I can tell you as fact is that most folks make well UNDER the so called averages and most lose money when the markets collapse. I can also unequivocally say that if you're in the market, YOU BEAR ALL THE RISK! So what if you could have your cake and eat it too? What peace of mind would it bring to never have to worry about getting your quarterly statement. How would it feel if you could ELIMINATE THE RISK and still get great returns - GUARANTEED? Too good to be true? NO...JUST TRUE!
You have available to you many annuity options with will GUARANTEE anywhere from 4-8% for income and the INSURANCE company takes the risk - NOT YOU! Would you be willing to give up a few points for the peace of mind and no loss? There are also many indexing options available that are NOT CAPPED offering you the full upside of the index less perhaps a small spread of 2% (varies by company). So now you can participate 100% in the upside (less the spread), and lock in your earnings so you can never lose them if the market collapses.
Like any other financial product, their are terms and conditions. One will generally have to keep the premium deferred for a specified period of time (3 yrs. +) but with many you can begin receiving annual LIFETIME payments after the first some...some even in the first year. For more information on Annuities check out my new e-report "Annuities Exposed"
When consumers are told to look at one aspect of retirement vehicles, they can easily be swayed to look at alternatives other than annuities. But you know the facts & use them to make an educated decision, the package of benefits and guarantees offered by fixed index annuities is hard to beat as well Fixed income securities in India.