32 ID Trends NAILBA
Annuity Trends from page 31
Lowering liquidity
Speaking of liquidity … it is expensive . And nowhere has it become more apparent than in the penalty-free withdrawal amount that is offered on fixed and indexed annuities . Historically speaking , 10 % penalty-free withdrawals have been an annuity mainstay . No more . Five percent penalty-frees are becoming more prevalent now , and some insurance companies are splitting the difference at 7 % or 8 % penalty-frees .
Minimum guaranteed surrender values ( MGSVs ) on indexed annuities ensure that a secondary guarantee is paid on the annuity , in the event of death or cash surrender . Generally speaking , the
MGSV available on indexed annuities today is [ 0.15 % -3.00 %] interest , credited on 87.50 % of the premiums paid . So in addition to the 0.00 % floor , an indexed annuity will pay no less than a return of the premiums paid ( in the event of cash surrender or death ), after a 14-year period . Over the past decade or so , fixed annuities ’ MGSVs have been a floor of 1.00 % -2.00 %. Now , we are seeing fixed annuities with MGSVs that mimic those on an indexed annuity : [ 0.15 % -3.00 %] interest on 87.50 % of the premiums paid .
Annuity Trends continued on page 34
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4.8 % Career
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Indexed annuity sales by distribution channel |
64.8 % Independent Agent |
10.6 % B / D : Independent |
0 % Direct response
3.2 %
B / D : Full service national
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16.4 % Bank |
. 2 %
Registered investment advisor
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Indexed annuity sales |
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$ 20,000 |
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( in millions ) |
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$ 15,000 |
|
|
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$ 10,000 |
|
|
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$ 5,000 |
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$ 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022