Annuities Performance Analysis

This document provides a step-by-step process to effectively use the Performance Analyzer calculator on Annuities Genius. It covers essential concepts such as index strategies, crediting methods, and how to analyze annuity performance. By following these instructions, you will be able to determine the best annuity options for your clients based on current index values and available crediting options.

Step 1

Welcome, Annuities Genius subscribers. Today, you will learn how to utilize the Performance Analyzer calculator on Annuities Genius.

Step 2

Before delving into the tool, it's important to understand indexes and crediting methods in the context of annuities. Refer to an actual annuity brochure for a clearer explanation.

Step 3

This brochure is available on the platform and provides insight into index strategies and crediting options for the product. An index typically refers to stock market benchmarks like the S&P 500 or NASDAQ.

Step 4

There are numerous indexes, such as those by Barclay's and Morgan Stanley. These indexes track the performance of a group of stocks or other fixed income instruments like bonds.

Step 5

Annuities do not offer raw index returns. Clients won't experience direct market fluctuations. Annuities usually have a 0% floor, ensuring no financial loss.

Step 6

In exchange for this protection, clients may not receive full market upsides. Insurance companies implement crediting methods—rate limits on indexed returns. Options include strategies like a one-year point-to-point strategy with maximum rate caps and participation rates.

Step 7

Clients encounter spreads, a type of fee, and unique crediting methods like performance triggers. In the Performance Analyzer, the focus is on annuity strategy returns, not raw index returns, indicating actual index credit clients might receive.

Step 8

Through the Performance Analyzer, compare returns across various strategies, primarily Fixed Index Annuities (FIAs). The platform covers every FIA account available.

Step 9

You can search for the best client options, considering caps, participation rates, spreads, and crediting rules. This reveals actual credited interest—not just raw index returns. Each line represents an annuity account, showing the insurance carrier, annuity product, and account specifics.

Step 10

For example, observe the five-year Invesco account.

Step 11

Scroll to find more accounts, such as an American Equity product named AssetShieldBonus 10 with EBLR.

Step 12

This account is a two-year NASDAQ Premier point-to-point with a participation rate and fee.

Step 13

On the right, view the index return.

Step 14

This represents the annualized growth rate over the last 10 years.

Step 15

Click the button for detailed output.

Step 16

It displays hypothetical annualized return of allocation strategies, considering compounding effects.

Step 17

Expect similar analyses in official FIA illustrations from insurance companies. Note: this doesn't account for rider charges, account fees, or premium bonuses.

Step 18

The tool applies current caps, spreads, par rates, and other rates.

Step 19

Current rates are applied to index values from the past decade. Remember, there are no guarantees.

Step 20

These variables change over time.

Step 21

Both index performance and rates fluctuate, affecting future outcomes. The tool offers clients a basic estimate.

Step 22

Upon accessing the tool, start by selecting a client. This can be done in the tool or at the screen's top.

Step 23

Select a different client to see their information in the filters. With over 3,500 results, refine the options for a concise list. Check filters for annuity type.

Step 24

Keep it as FIA, avoiding RILAs. Use the past 10 years of index returns ending on December 31st of last year, the standard measure. There's an option for more recent returns by including months till the previous month’s end.

Step 25

For more recent returns, include them in the 10-year frame, although standard practice is recommended. Some results may use hypothetical data for newly established indexes.

Step 26

Toggle the switch to exclude newer indexes from the list, focusing on actual results.

Step 27

This provides actual historical results, not theoretical data.

Step 28

Set a minimum carrier rating, such as A- AM best rating.

Step 29

On the left screen, further narrow down annuity strategy, crediting options, index, and product features to suit client needs.