1 / 18

UNDERSTANDING EQUITY INDEX ANNUITIES

UNDERSTANDING EQUITY INDEX ANNUITIES. Let’s think back to 1999 …. A. Consumers expected CD’s to return how much … 8% ? B. Consumers expected Mutual funds to return how much … 30% ?. What would consumers say was driving the market during those years?. Was it … GREED?.

caitir
Download Presentation

UNDERSTANDING EQUITY INDEX ANNUITIES

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. UNDERSTANDING EQUITY INDEX ANNUITIES

  2. Let’s think back to 1999 … • A. Consumers expected CD’s to return how much … 8% ? • B. Consumers expected Mutual funds to return how much … 30% ?

  3. What would consumers say was driving the market during those years?

  4. Was it … GREED?

  5. The wide difference in gains made it reasonable to take the risk of being in the market. I I CD’s – 8% MF’s – 30%

  6. Now let’s look at 2006… • A. Consumers expect CD’s to return how much … 4% ? • B. Consumers expect Mutual funds to return how much … 8% ?

  7. What would consumers say was driving this market?

  8. Was it … FEAR?

  9. Is there enough difference between returns to justify taking the additional risk of being in the market I I CD’s – 3% MF’s – 8%

  10. What if we could show you a way to eliminate the Fear, and feed your need for Greed?

  11. Equity Index annuities provide upside market potential, without the downside risk. • Most EIA’s protect against loss in the bad years ( FEAR ) • EIA’s also offer participation in market gains in the good years ( GREED )

  12. A simple example • When the market rises, you get about 60% of the gains. • When the market falls, you stay even.

  13. EIA’s perform very well in difficult conditions • A good strategy for consumers who can’t take risk in the market, • For consumers with low-risk tolerances • For consumers with retirement fund accounts

  14. A five year S&P 500 loss • September 30, 1998 – S&P closes at 1017.01 • September 30, 2003 – S&P closes at 995.97 • Representing an overall loss of 2% for the period

  15. Index Annuities performed competitively in the worst Bear Market since the Depression

  16. A Sample EIA Grew 40% *Based on an annual point to point strategy with a 60% participation rate. In other words when the market rises you get 60% of the gain. Based upon the following S&P 500 values: Sept 1998 – 1017, Sept 1999 – 1282, Sept 2000 – 1436, Sept 2001 – 1040, Sept 2002 – 815, Sept 2003 - 995

  17. The annual reset annuities did exactly what they were supposed to do • Participated in the index advances in 1998 and 1999 • Protected that interest gain when the market declined in 2001 and 2002 • Then reset at the index’s lower levels – to take advantage of the index’s climb in 2003

  18. When the market goes up – consumers win.When the market goes down – consumers don’t lose.

More Related