How Do Carriers Price Indexed Annuities?
Do you know how an insurance company that issues annuities prices them? If not, don’t feel bad. Even some of the advisors who sell annuities don’t know exactly how the carriers make money. The biggest misconception is that many people believe that the insurance carrier invests the assets that they receive directly into the indexes that the Fixed Indexed Annuity (FIA) product offers, and then the carrier keeps the spread. In reality, the carrier usually never invests directly into the actual index. Instead, they are...
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