It Is Time to Look Closely at Hybrid Annuities and Fixed Index Annuities

Those of you who are retired right now (and those soon to be retired) may be aggressively planning for your retirement yet are considering less aggressive options to help improve your retirement savings stability. This has led to a huge opportunity for financial advisors of all sorts (including stock brokers) to recommend fixed index annuities or hybrid annuities in order to give you an additional form of upside growth potential and create guaranteed income in the future.

The sale of fixed indexed annuities/ hybrid annuities were the highest ever in the 1st quarter of 2012. We believe this trend will continue thanks to the following:

  • Most American's perspective on risk vs safety & protection of principal is migrating toward a much more conservative tone.
  • Due to market volatility (and the existing of so many variable annuity companies from the marketplace), the VA capacity has shrunk throughout this extended low-interest rate environment.
  • This makes the principal guarantee, realistic upside growth potential and guaranteed cash flow for life options available on Fixed Index Annuities much more attractive to both consumers, financial advisors and securities representatives.

Let’s now look at safety and protected accumulation. With interest rates as low as they are now and coupled by the historic levels of money just sitting on the sidelines, many financial advisors and brokers are concerned with just how to safely put your money to work for you, without the inherent principal risks involved with bonds and bond funds should interest rates start to go up. We suggest that brokers and financial advisors explore Fixed Index Annuities as a preferred alternative to help you grow your assets without risking your principal in the market. Because earnings are linked to an equity index, the upside growth potential may be very good compared to the other conservative options, and your principal is always protected from any downside market risk.

In order to receive more education, insights and training we suggest you work with our firm’s annuity experts, request a couple illustrations to get started, and see how these strategies can perform in both down and up markets.

And what about you guaranteed cash flow & income you ask? While most brokers and financial advisors are generally aware of the cash flow offered through variable annuities that are purchased with lifetime withdrawal benefit riders, it remains a fact that fewer have been taught how many Fixed Index Annuity's income riders could generate guaranteed cash flow compared to their variable annuities. Learning all the subtle (and sometimes not so subtle) nuances within these customized riders can add tremendous value to you. Indeed, because of the lack of principal volatility within fixed indexed annuities, many of their income riders generate greater cash flow and guaranteed income. This may allow you to allocate a smaller portion of your total assets to generate a larger guaranteed flow of income as a cushion.

Don’t view fixed index annuities as complicated or scary. The reality is that the best of these products are simple to explain and easy to understand. With a bit more investigation and a deeper understanding, you will discover that Fixed Index Annuities are quite appealing to you and may be just what you need.