Index Annuities vs. Variable Annuities

ComparisonAbout once a month an advisor asks me for “something that compares index annuities to variable annuities”.

Up to this point, I didn’t have much for direct comparison. I’ve archived a lot on both topics, but it wasn’t complete. But that changes today – because I’ve just been given a great 12 page white paper from Genworth about FIAs vs. VAs!
In the executive summary Genworth states:

Variable annuities have long been a common tool for financial professionals whose clients seek tax-deferred growth and guaranteed retirement income, with the opportunity to outperform inflation. Yet high market volatility and low interest rates continue to challenge accumulation and income objectives. That’s why some financial professionals are looking to fixed index annuities to protect portfolio value and create guaranteed income.

Nice huh? A couple key points…


Page 6 gives a great graphic you can use in appointments, seminars and a lot of other places on the “Potential Risk-Return Spectrum”. Don’t overlook this one!!!

Potential_Risk-Return_Spectrum


Page 7 gives a side-by-side comparison of FIAs and VAs, showing a balanced picture. You see the words “protect”, “lock in” and “guarantees” on the FIA side with words like “upside”, “volatility” and “exposure” on the VA side.

Annuity_Advantage_-_Side_by_Side

 


Lastly, page 8 provides ideas around index annuities fitting into an overall plan. Client one uses index annuities to guarantee income. Client two uses index annuities to increase growth potential.
Overall_Plan_-_2_Clients


We need better information on this topic floating around our industry…
If you’re looking for a well-balanced pieces on annuities, I’ve found a great one here & I’m would love to share the full report. Just comment below and I’ll get it right out.

Advise with Passion.
MJN