Buying Annuities Online
Annuities: Questions and Answers
Here are some basic questions and answers about buying Annuities over the Internet.
What are Equity Indexed Annuities?
Equity indexed annuities (EIA's), which provide a minimum guaranteed interest rate and the potential for additional interest based on a percentage of the gains in a stock market index, have become a force to reckon with in the investment marketplace. In the last 3 years, over $20 billion in sales have resulted which make them a dominant factor in the investment marketplace.What are the guarantees in an EIA?
The guarantees offered by major, highly rated insurance companies, is 100% of your principal plus 3% compounded annually! This minimum downside result is compared to an appropriate stock market index i.e. the Standard and Poors 500 and the investor will attain the GREATER of the 3% compounded annually or up to 75% of the index, whichever is greater. Over the term of the annuity, the market value can never decrease.Is there any initial cost or load for investing in this insurance product?
No! 100% of the investor's dollar goes to work in the EIA. Salespersons are compensated by the insurance company for selling this product, not the investor.Are there any ongoing annual management fees with the EIA?
No! since there is only a published index to track (S&P 500, Dow Jones, Russell 2000 or NASDAQ), there is no management cost, whatsoever.Are there any surrender charges in EIA's?
Yes! A declining surrender charge is charged to the investor, for a period of 7-9 years, only on the amount withdrawn exceeding 10% of the market value of the account. In other words, 10% of the market value of the account can be withdrawn, annually, without penalty. However, ALL surrender penalties are removed commensurate with a terminal illness or a 60 day confinement in an accredited nursing home facility. In other words confinement to a nursing home or a terminal illness, eliminates any surrender penalties charged against the account. In these cases, 100% of the market value can be withdrawn.Are there any other flexibilities during the term of the annuity?
Yes. The investor on an annual basis can change from one index to another or select the guaranteed fixed account.Why are EIA's superior to other annuities i.e. fixed annuities and variable annuities?
Simple! No other annuity product offers a 100% guarantee of principal with a meaningful upside if it exceeds 3% compounded annually. Since it is an insurance product, only agents with an insurance license can sell the product. The EIA cannot be sold by stockbrokers with only a securities license. Many insurance agents are reluctant to sell this annuity product in that its commission, paid by the insurance company, is much lower than other insurance products available.Answers courtesy of Fend
Recommended Annuity Websites
Principal Financial Group - The Principal Financial Group is a nationally known provider of 401k plans, mutual funds, retirement plans, investments, life insurance, health insurance, and on-line banking. Online customer service, education.
BenefitsLink - BenefitsLink.com is for people and companies involved in providing employer-sponsored employee benefit plans, including for-profit, non-profit and governmental plan sponsors, whether or not regulated by ERISA.
Variable Annuities Online - Annuity quotes, annuity rates, deferred annuity quotes for fixed equity indexed annuities. Learn about fixed indexed annuities and evaluate hypothetical returns with fixed indexed hypothetical calculator.
Reviewed Annuity Sites on the Internet
Brentmark
Software
- www.brentmark.com/
Brentmark Software develops software for estate, retirement and financial planning professionals. Products include Pension &
Roth IRA Analyzer, RetireNow, Estate Planning Tools, Estate Planning QuickView, PFP Notebook, Stock Options Risk Analyzer, College Planning Tools, Investment Scenario Generator, Charitable Financial Planner, IRS Factors Calculator, Savings Bond Toolkit, Pension Distributions Planner, Pension Distributions Calculator and Minimum Distributions Calculator.
Clarity Software, LLC
-www.pendcalc.com/
PenD'Calc is Retirement, Distribution & Estate Planning Software.
Since 1987 PenD'Calc R&EP™ Software has been performing retirement accumulation, pension distribution and estate planning calculations for advanced planners. (R&EP™ stands for Retirement and Estate Planning.) PenD'Calc Software is a scalable integrated retirement distribution and estate planning software system which focuses on modeling the singular and/or combined impact of various planning options unique to qualified dollar assets on retirement income, estate taxes, and beneficiary income streams.
StockBroker
Fraud
Securities Fraud can be defined as the broker putting his or her own interests ahead of the client. This is known as a Breach of Fiduciary Duty. Here are the questions to ask to determine if securities fraud has happened to you.
Visit our Shopping Guides and Credit Card Fraud sections for useful information.
Certifications
