Index annuities performed competitively in spite of
enduring the worst bear market since the Depression. There were
fourteen carriers available five years
ago offering index annuities that today have
completed their index period or posted five years of interest
crediting. Ten of these provided Jack Marion, President of Advantage
Group, a watch dog of financial products, with copies of 2003
documentation, for those who had purchased index annuities as close
to 30 September 1998 as possible. He compared the total return of
these annuities with various other vehicles for the same period.
Below is the results.
Although some annuities had higher total returns than others did,
let’s focus on the success of the index annuity concept and not
individual results. The bottom line is index annuities went through
their baptism by fire during this period and all
performed as they were designed to do. The annual reset (lock in
last year gains) did exactly what they were suppose to do –
participate in the index advances in 1998 and 1999, protect the
interest credited
during the index declines in 2001 and
2002. And then reset at the indices’ lower levels to take advantage
of the index climb in 2003. The average total returns were 35.67%.
It is interesting to note that
all of the index annuities
posted higher returns than index funds for the
same period and two of the index products bested returns of the
nation’s largest bond fund. The average index annuity total return
at 33.7% was considerably higher than the average stock mutual fund
or variable annuity equity sub-account returns. Which is probably
not surprising when the swings of the stock market are considered,
but the average index annuity return was better than typical bond
vehicles during a reportedly strong bond market, and was also almost
50% higher than the return of the average certificate of deposit.
Eliminating losses
produces the same benefits as reinvested dividends or
better. Don’t be fooled by rates of return with other investment
vehicles. This return bar shows the average gain
ABOVE principle that was invested!
Indexed annuities are not “in” the stock market but are “linked” to
indices such as the S&P500, DJIA, NASDAQ and many others depending
on the company. This is a sure way for someone to not worry about
their money while markets swing, up or down. With these annuities
you cannot loose your principle it
is guaranteed to earn nearly 3% while still participating in the
upside of the market. Some companies even offer up to 36% of the
markets upside!
Don’t worry about liquidity. In most cases you can
remove 10% annually, take loans, and if in a nursing home your money
is surrender charge free to you. There is not enough space to review
all the details here, but speak with an advisor like myself who can
provide more than one option when it comes to preserving your hard
earned money. The first index annuity was purchased almost nine
years ago. During their brief existence the stock market has
produced years of irrational returns and historical losses, not a
gentle environment for a nine-year-old. In spite of this, index
annuities are building a tangible record of performance and
protection. Although the future path of the market has yet to be
walked, index annuities have proven they offer safety in bad times
and extraordinary potential in good.
Spend some time with a “specialist” who can go over the many
solutions that Equity Index Annuities offer. Call me, or email me
for your free consultation with no obligation on your part, I
promise.
Remember: “The Journey to a friends house
is never too long”. Danish Proverb.
FREE -
Term Quote - Click Here
Got a Question?
Don Loper
Toll Free 1-866-636-7614
E-Mail:
dloper@cfiemail.com
Office of Supervisory Jurisdiction:
Centaurus Financial., 110 Schiller Street, Suite 210, Elmhurst, IL. 60126
Phone 1-(630) 530-0345.
Securities offered through: Centaurus Financial, Inc.,
333 City Blvd West, Suite 2010,
Orange, CA 92868, Member SIPC & FINRA (Previously NASD)
Phone 1-(714)456-0852,
http://www.centaurusfinancial.com
Securities offered through Centaurus Financial, Inc., a registered
broker/dealer and a
member of FINRA & SIPC. This is not an offer to sell
securities, which may be done only after proper
delivery of a prospectus and client suitability has been reviewed and determined.
