When I coached college football years ago, the young players often wanted to stand out, to be different and unique, and have some sort of distinction from the other players. Some would wear their uniforms differently, with multicolored socks or flashy undershirts. Some would do crazy things with their hair, like shave it off, grow an extra-long beard, or let their really long hair flow out of their helmet. Although any one of these features would get a player noticed, my coaching experience taught me that performance is what truly sets players apart. Strong, steady, consistent performance and making good plays will always separate one player from another.
Equity-indexed annuities are very similar. Performance, not marketing, is what usually sets one annuity contract apart from another. Being unique is typically a matter of timing and ability. If you are researching indexed annuities, then their features and benefits may seem new to you, but indexed annuities have been available for many years. In 1995, indexed annuity sales were $100 million, a mere blip on the annuities market landscape. Fast-forward 19 years, and total annuity sales are over $230 billion, according to LIMRA Secure Retirement Institute.
Specific riders may make an annuity exceptional. Yet, when one feature is successful, most (if not all) companies will quickly follow suit with a similar feature. Income riders, wellness or long-term care riders, and enhanced death benefit riders, are all available with most annuity contracts. With hundreds of options available to you, the individuality of each annuity you research can quickly become overwhelming, especially with the slick marketing that some companies use.
Sometimes what makes an annuity contract unique is its simplicity. “New and distinctive” annuity contracts are introduced regularly to the market. Sometimes the “new” contract offers a position or feature that benefits you, the client, specifically. Unfortunately though, too many times “new” really just means new marketing, and upon closer research, that’s pretty simple to determine. In the end, indexed annuity contracts are all very similar.
Here are five things to look at that set annuity contracts apart from each other:
- Strength of the insurance company carrying the annuity.
- Opportunity for growth: What are the caps, or is it uncapped? If it is uncapped, what index is uncapped?
- Fees: What are the fees paying for? Do you need those features?
- Additional riders: long-term care, critical illness, wellness, income, death benefit riders, etc.
- Advisor: the ability of an advisor to educate, communicate, research, and offer multiple options, that will suit your specific needs.
So, what is unique about an indexed annuity? You! You are one of a kind, and your purpose could be very different from other users. Your financial goals, risk tolerance, and timing are all unique to your own situation. And your understanding of all these options is solely yours to comprehend and understand. Identifying what you want your assets to do for you is specific to you. The size of your portfolio is not unique; identifying the proper tools to help you meet your goals is unique.
There are some inventive and resourceful ways to utilize the indexed annuity tool. For details, call me at (303) 749-5853 or email Rich@RetirePR.com. And if you are a business owner, there are additional innovative wealth building tools available for you.
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