Jonny SAMPLE
Discerning Misconceptions about the Index Annuity
1. "My Agent told me I was guaranteed 8% every year of the contract" Unless fixed rates are currently hovering at 8%, then your agent may have conflated the "rollup rate" in your income account value with the actual interest earnings on your principal. Here is how the annuity company guarantees your income benefit and how their calculation my have been miscommunicated to you.
Your Insurance Company internally calculates your future lifetime income guarantee based an internal calcualtor that they often call the "Income Benefit (or Income Account) Value". This calulator has nothing to do with your lump sum of money; it is only a calculator. The calculator consists of 3 components primarily:
1. Rollup Rate (8% example) each year multiplied by premium
2. Times Life Expectancy Factor (or Payout Rate) =
3. Income Benefit Amount
This Calculator is a GOOD THING and represents the mechanics of how ALL INSURERS calculate income benefits! But if someone is quoting you the rollup rate as your annual interest yield on your lump sum benefit, well, that's just not accurate.
START BY ORDERING a Company Illustration for an INDEXED ANNUITY to Determine if it is an appropriate GROWTH VEHICLE for your circumstances
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