Annuity123 is dedicated to providing Americans with unbiased information about retirement, answering the tough questions you want to know.

With hundreds of articles on every retirement planning topic you can think of, peace of mind is just a click away.

How Exactly Do Hybrid Annuities Work?

Rob Brinkman

Just what is this hyped up “Hybrid” Annuity that so many annuity agents and financial advisors are talking about?  The term ‘hybrid annuity’ is often used to describe a Fixed Index Annuity (FIA).  In this video, Rob Brinkman explains how a Fixed Annuity chassis is used as a platform for the “Hybrid” Annuity, and how the insurance company provides its Index Annuity owners with the opportunity to participate in market upswings while being protected from market downturns with the use of options.

The following FAQs are addressed in this educational video below:

  1. What is a Hybrid Annuity? (15 second mark)
  2. What Risks are present in Variable, Hybrid, and Fixed Annuities? (45 second mark)
  3. How do Fixed Annuities earn interest? (2 minute mark)
  4. Why a Hybrid Annuity is a mix between Variable and Fixed? (2:40 mark)
  5. How option purchases work in Hybrid Annuities? (3:45 mark)
  6. Why these Fixed Index (aka – “Hybrid”) Annuities are so popular? (5:48 mark)

To learn more from this annuity professional, click here (Rob Brinkman).

About the Author:

Rob Brinkman began his investment career in 1987, one month after the infamous October stock market crash.  “In the wake of that kind of financial devastation, one learns the importance of a conservative approach to money management”, Rob was quoted in the local Texas newspaper that next week.

Over the past 26 years Rob has become one of the industry’s most respected advocates for conservative, safe investing.  As an executive for one of the country’s largest investment/insurance firms, Rob designed and implemented annuity platforms for clients such as Merrill Lynch, Raymond James and UBS.  In his private practice, Rob works with individuals who are in or nearing retirement, assisting them in asset preservation and income generation.  His ‘white board’ educational videos have become the internet standard for both basic understanding of investment fundamentals, as well as advanced investment strategies.

A123 Pro Question Button

 

Annuity123 does not offer insurance, investment, or tax advice.  You should always seek the guidance of qualified and licensed professionals concerning your personal insurance, investment, or tax matters.  Annuity123 is simply a platform allowing retirement planning professionals to help educate the community on various retirement planning topics.  Annuity123 does not directly support or take responsibility for ensuring the accuracy of the content displayed in the articles themselves or any feedback that may get added in the Comments section from the community.

1 Comment

  • John Olsen says:

    I believe that the term "hybrid annuities" should not be applied to Index Annutiies. Why? Two reasons:

    First, "hybrid" suggests that an index annuity is part one thing and part another, in this case, part "variable" and part "fixed". That is not so. An index annuity that has not been registered as a Variable product is ALWAYS a FIXED annuity. It has the central elements of fixed annuities – a guarantee of principal and a guarantee of a minimum interest crediting rate.

    Second, "hybrid" is also used to describe deferred annuities with Long Term Care benefits, and that usage makes sense. Such a contract is part deferred annuity and part long term care insurance.

    The interest crediting of an index annuity is NOT a "hybrid". Why? Because, while the interest rate credited is, indeed, linked to the growth in the value of an external equity index (often, the S&P500), that linkage always operates as a "ratchet"; that is, positive growth of the index in Year N will generate index-linked interest, declines in the index value NEVER generate losses to the annuity cash value. This is precisely why many in our industry, including Yours Truly, prefer the term "fixed index annuity" to describe these contracts.

Leave a Reply

Your email address will not be published.