Annuity Guys®

Annuity Rates, Features & Ratings: America's trusted annuity resource. Compare best options for hybrid, index, fixed, variable & immediate annuity quotes.


Helping You Create Great Results Your Retirement Deserves!

Header Right Phone
  • Home
  • About Us
    • About Us
    • Contact Us
    • Site Terms & Disclosure
    • Privacy Policy
  • FAQs
    • Most Frequently Asked Annuity Questions
  • All Annuity Guys Videos
  • Annuity Types
    • Best Annuity Reviews
    • Market Free™ Annuities
    • Choosing an Annuity
    • Deferred Annuities
    • Hybrid Annuity Choices
      • Hybrid Annuity Pros&Cons
      • Hybrid Income Riders
      • Hybrid Annuity Guarantees & Strategies
    • Fixed Annuity Choices
      • Fixed Annuity Performance
      • Better Fixed Annuities
      • Fixed Deferred Annuities
      • Fixed Rate Annuities
      • Fixed Annuity Alternatives
      • Fixed Annuity Pros & Cons
      • Fixed Annuity Negatives
    • Index Annuity Choices
      • Fixed Index Annuity Features
      • Fixed Index Annuity Performance
      • Better Fixed Index Annuities
      • Fixed Index Annuity Alternatives
      • Fixed Index Annuity Pros & Cons
      • Fixed Index Annuity History
      • Fixed Index Annuity Negatives
    • Immediate Annuities
      • Immediate Variable Annuity
      • Immediate Fixed Annuities
    • Variable Annuities
      • Variable Annuity Features
      • Better Variable Annuities
      • Variable Annuities Disadvantages
      • Variable Annuity Alternatives
      • Variable Annuity Negatives
      • Variable Annuity Performance
    • Pre-Issued Annuities™
      • Hybrid Annuities versus Pre-Issued Annuities ™
    • Annuity Glossary
  • Articles
    • How Do MarketFree™ Annuities Work?
    • Are Annuities Safe?
    • Living Benefits
    • FIA Performance
    • Beware of FIAs?
    • Annuities & Retirement
    • Annuities & Estate Tax
    • Rollovers & Annuities
    • Annuities & Tax
    • Charity & Annuities
    • The Lost Decade
    • Best Annuity Videos
    • Social Security Benefits
  • Calculators
    • Retirement Planning Calculator — Basic
    • Retirement Shortfall Calculator — Basic
    • Immediate Annuity Calculator & Quotes
    • Fixed Index Annuity Calculator & Fixed Annuity Calculator
    • Variable Annuity Calculator & Hybrid Annuity Calculator
  • Blog
    • Annuity Guys® Weekly Annuity Video Blogs
  • Get Annuity Guys Help
    • Request Annuity Guys’ Planning Help Today
You are here: Home / Annuity Types / Hybrid Annuities Explained / Hybrid Annuity Guarantees and Index Strategies

Hybrid Annuity Guarantees and Index Strategies

Are Hybrid Annuities too Complicated?

A common complaint leveled at hybrid annuities is that they are too complicated and have too many moving parts. The Annuity Guys®, Dick and Eric, discuss why many folks in the media and investment world like to hobby-horse this point while missing the real reasons why these financial products work so well as a foundational allocation in thousands of retirement portfolios. The secret is “the non-moving parts otherwise known as contractual **guarantees.” [continued below video]

 

[embedit snippet=”video-specialist-button-hybrid”]

 
Contractual Guarantees – absolute **guarantees, no-moving parts.

Hybrid/Fixed Index Annuities – allow for upside potential of specified moving parts in addition to absolute contractual **guarantees.

Income Rider – addendum to an annuity contract **guaranteeing a future lifetime income plus additional benefits in some income riders (this is a contractual **guarantee).

Features, Benefits, and Facts:

  1. Annuity Owner Remains in majority control of the annuity’s cash account value during the surrender term and has 100% control after the surrender term.
  2. Full account value of the cash account passes on to heirs with no surrender or penalty charge.
  3. Guaranteed growth in deferral **guaranteeing a minimum future income. Example: Initial Premium $100,000 + 5% bonus **guaranteed growth of 7.2 percent deferred for ten years = $210,000 income account value producing a of $12,600 per year at age 70 with a single life payout.
  4. Payout percentages from the income account are based on age and a single or joint income need. Example: age seventy single payout 6 percent or joint payout 5.5 percent
  5. Fees for riders can be based on the cash or income account value and are charged to the cash account. Fees typically range from half of one percent (.5%) to one and a quarter percent (1.25%). This does not reduce the **guaranteed growth of the income account.
  6. May have a death benefit allowing the income account if it is larger than the cash account to be distributed to heirs over a five-year period.
  7. May have an increasing income as an inflation hedge.
  8. May have a Long Term Care Benefit.

Index Strategy Moving Parts:

(Index examples: *S&P 500, *Dow Jones Industrial, *Trader Vic (Commodities), *Barclays Capital Aggregate US Bond, and literally any third-party index may be specified as a measure for crediting interest).

 
Google, Yahoo & Bing value your rating, So please, Click a Star below to Rate Us…

Five indicates very helpful information!

Uncapped Index – the full percentage of earnings growth on an index to be applied as interest to the cash account value and income account value.

Cap – limits the percentage of earnings growth on an index to be applied as interest to the cash account value and income account value.

  • Positive Example:  3% Cap *S&P index is up 10% for the year interest credited is 3%.
  • Negative Example:  3 % Cap *S&P index is down 10% for the year interest credited is 0%.

Spread – a fee based on a percentage subtracted first, only when index earnings exist. Any earnings are applied as interest to the cash account value and income account value. If there are no earnings the spread is never applied.

  • Positive Example: 3% Spread *S&P index is up 10% for the year interest credited is 7%.
  • Negative Example:  3% Spread *S&P index is down 10% for the year interest credited is 0% the spread is no longer applicable.

Participation – allows a percentage of index growth to be applied as interest to the cash account value and income account value.

  • Positive Example:  30% Participation *S&P index is up 10% for the year interest credited is 3%.
  • Negative Example:  30% Participation *S&P index is down 10% for the year interest credited is 0%.

Average – allows the average index growth to be applied as interest to the cash account value and income account value over a specified period of time.

  • Positive Example:  *S&P index is at 100 at the beginning of the year and it fluctuates up and down between 110 and 100 for the year with six months of the index being at 110 and six months at 100. The average annual interest credited is 5%.
  • Formula:  (110+100+110+100+110+100+110+100+110+100+110+100)=1260/12=105-100 = 5%
  • Negative Example: *S&P index is at 100 at the beginning of the year and it fluctuates up and down between 100 and 90 for the year with six months of the index being at 100 and six months at 90. The average annual interest credited is 0%.
  • Formula:  (90+100+90+100+90+100+90+100+90+100+90+100)=1140/12=95-100 = -5%

Capped Monthly Sum or Average – allows for adding together each months index growth limited by a cap to the upside with no limit to the downside in any month being subtracted from the cumulative total. Cumulative earnings to be applied as interest to the cash account value and income account value over a specified period of time.

  • Positive Example: *S&P index is up 12% for the year, however; six months were 0% earnings and six months were 2% earnings each. The monthly cap is 1%, the annual interest credited is 6%.
  • Formula: (0% x 6 months = 0%)+( 1% x 6 months = 6%) = 6%
  • Negative Example:  *S&P index is up 12% for the year, however; six months were negative 2% earnings and six months were 4% earnings each. The monthly cap is 1%. The annual interest credited is 0%.
  • Formula: (-2% x 6 months = -12%) + ( 1% x 6 months = 6%) = -6%

Blend – combining a specified percentage of account value to an uncapped index for earnings growth with a specified percentage of account value based on a fixed interest portion. Then add all gains and any losses to determine the interest to be applied to the cash account value and income account value.

  • Positive Example: *S&P index is up 10% for the year; 50% of the blend is an uncapped index and 50% of the blend is a fixed rate of 2%. The annual interest credited is 6%.
  • Formula: (10% x 50% = 5%)+( 2% x 50%= 1%) = 6%
  • Negative Example: *S&P index is down 10% for the year; 50% of the blend is an uncapped index and 50% of the blend is a fixed rate of 2%. The annual interest credited is 0%.
  • Formula: (-10% x 50% = -5%)+( 2% x 50%= 1%) = -4%
[embedit snippet=”video-specialist-button-hybrid”]

 
Fees – are typically associated with optional riders. Fees are subtracted from cash value accounts not affecting income **guarantee accounts. Fees may reduce principal in years with no interest earnings. (some rider fees are specified as a spread and do not lower cash account value in years with no interest earnings).

Here are a few Index Strategies using various time periods and combinations of the components discussed above:

Annual Point-to-Point with a Cap

Annual Point-to-Point Average with a Spread

Annual Point-to-Point Monthly Average or Monthly Sum with a Cap

Annual Point-to-Point with a Participation Rate

Biennial Point-to-Point with a Biennial Cap

Quadrennial Point-to-Point with a Quadrennial Blend

Five Year Point to Point with an Uncapped Non-Correlated Commodity Index

Hybrid Case Study I

Hybrid Annuity Case Studies

[embedit snippet=”hybrid-annuity-live-demo-invite”]

*Disclosure: All examples are hypothetical for conceptual for educational purposes.The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. TVI, TVI Index, Trader Vic Index, EAM Partners L.P., and EAM are trademarks of EAM Partners L.P. (“EAM”). The Trader Vic Index™ was created and is owned by EAM. EAM developed, maintains and is the sole party responsible for the methodology that is employed in connection with the Trader Vic Index™. The Barclays Capital U.S. Aggregate Bond Index is comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate, and mortgage-backed securities. Barclays Capital and Barclays Capital U.S. Aggregate Bond Index are trademarks of Barclays Capital Inc. (Barclays Capital). NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.

Learn the Truth About Hybrid Annuities: Read More…

 

Hybrid Income Annuities & Hybrid Income Annuity Riders: Read More…

 

Hybrid Annuities or a Hybrid Income Annuity; Learn the Pros and Cons: Read More…

 

692
SHARES
ShareTweetGoogleLinkedinPinterestSkypeStumbleuponTumblrDeliciousDiggRedditMail

 

Empowering Annuity Reference Book

 
DOWN-LOAD NOW - FREE!
  • Annuity Guys Reference Book - 250 pages of Annuity Facts

  • "The New Retirement"
    Annuity Reference Book 
    Free Instant Download
  • Confidential - Easy Opt Out
 

  • Are Annuities Improving With The Economy?

    Are Annuities Improving With The Economy?

    Annuities have been on a significant growth upswing since the equities market started tanking in 2008. So if annuities were …Read More »
  • China Tariffs – Market Corrections – Effects on Index Annuities

    China Tariffs – Market Corrections – Effects on Index Annuities

    Market’s are so unpredictable that “the experts” are frequently – DEAD WRONG! Unfortunately, you rarely here about their failed predictions, …Read More »
  • Is Strong Growth from Annuities Likely in The Looming Bear Market?

    Is Strong Growth from Annuities Likely in The Looming Bear Market?

    Strong growth is a matter of perspective, and when your basis of comparison is a decrease of 20 to 30 …Read More »

Revealing Fun Video: Fiduciary Advisors Vs. Annuity Salesmen
MUST KNOW FACTS 90% of
ANNUITY ADVISORS AVOID TELLING!
  • *FIDUCIARY RETIREMENT REVIEWS
    Second Opinions Improve Retirements
     
    "For Your Retirement's Success"
     Choose a *Fiduciary Advisor who gives you Full Disclosure of Cost & Selection.
     
    Material Fact 1:
      About 90% of advisors ARE NOT REQUIRED by law to do what is best for their clients!
     
    Material Fact 2:
     Fiduciary Advisors ARE REQUIRED by law to do what's best for their clients! 
     
      Hence, clients of a fiduciary can know that their advisor chose the highest legal standard required by law to work strictly for their highest good.
     
     We estimate Fiduciaries are less than 10% of total U.S. financial service providers. Fiduciaries are held to the highest client legal standard of financial planning and investment advice.
     
     The other 90% are sales oriented advisors, brokers, bank reps, registered reps. & insurance agents, selling products on a much lower suitability legal standard, not necessarily what's best for their client!
     
       Fiduciaries also must disclose conflicts of interest that could potentially bias their advice, such as; selling products that pay them higher commissions having higher fees or costs, and their lack of investment product access limiting their client's opportunities, to name a few.
     
    Choosing your advisor can have
    "The Largest Single Impact on
    Your Retirement's Success or Failure"


  • What Percentage of Your Portfolio Allocation Should Be Annuities?

    What Percentage of Your Portfolio Allocation Should Be Annuities?

    Want to know just how much of your retirement nest egg you should consider for placement into annuities? The U.S. …Read More »
  • High Annuity Fees & High Annuity Commissions – Hear the Inside Truth

    High Annuity Fees & High Annuity Commissions – Hear the Inside Truth

    We’ll just give it to you straight – some annuities pay high commissions and some of them have high annuity …Read More »
  • Are Annuity **Guarantees on Their Way Down?

    Are Annuity **Guarantees on Their Way Down?

    “It was the best of times, it was the worst of times.” Dickens often quoted opening to the Tale of …Read More »
  • Are Fixed Index Annuities Best for Retirees?

    Are Fixed Index Annuities Best for Retirees?

    “Sometimes you eat the bear; sometimes the bear eats you.” – AnonymousHow would you like to make a portion of …Read More »
  • Buy an Annuity Now or Will Rates Rise?

    Buy an Annuity Now or Will Rates Rise?

    All things come to him who waits- provided he knows what he is waiting for… Prior to the Corona-virus it …Read More »
  • What is the Best Annuity?

    What is the Best Annuity?

    Are you trying to figure out which annuity will offer the best way to grow your money and safely generate …Read More »
  • Choosing a Great Retirement Advisor for Financial Planning

    Choosing a Great Retirement Advisor for Financial Planning

    Remember the yellow page ads from years ago – “Let your fingers do the walking, it’s a snap!”The yellow pages …Read More »
  • Are Annuity Surrender Charges a Deal Breaker?

    Are Annuity Surrender Charges a Deal Breaker?

    The last time you bought a new car, how much of a factor in your purchase decision was the vehicles …Read More »

View Our Newest Videos! Subscribe Now
  • Annuity Guys Videos - Annuity Answers
  • New Annuity Guys Videos
    Our Entertaining & Informative
     Saturday Morning Video Blog
  • Timely Retirement & Annuity Issues - Easy Opt Out

  • I Don’t Have a Pension – Do I need an Annuity?

    I Don’t Have a Pension – Do I need an Annuity?

    If you are asking this question rest assured you are in good company. Today’s retirement landscape is the result of …Read More »
  • Avoid Annuity Gimmicks, Amateurs, & Charlatans!

    Avoid Annuity Gimmicks, Amateurs, & Charlatans!

    Everyone loves a good practical joke – until the joker happens to be the salesperson that just sold you an annuity …Read More »
  • Annuity Scams – Fear Factor or Reality?

    Annuity Scams – Fear Factor or Reality?

    The Internet is full of warnings and alerts about annuity scams that create the appearance of  industry run amok with …Read More »
  • China Tariffs – Market Corrections – Effects on Index Annuities

    China Tariffs – Market Corrections – Effects on Index Annuities

    Market’s are so unpredictable that “the experts” are frequently – DEAD WRONG! Unfortunately, you rarely here about their failed predictions, …Read More »
  • Fixed Index Annuity & Hybrid Annuity Info

    MarketFree® Fixed Index Annuity Case Study…Case Study:  In November of 2006, Jan and Steve, a couple concerned about the security of …Read More »
  • Why are Hybrid Annuities so Popular?

    Why are Hybrid Annuities so Popular?

    What made fixed index annuities and hybrid annuities the fastest growing annuity type on the market according to a LIMRA …Read More »
  • Does Your State Have Good Annuities?

    Does Your State Have Good Annuities?

    There’s no place like home… but when it comes to annuities, your Home State may not be the best place for …Read More »
  • Relying on Annuities for Retirement Pensions

    Relying on Annuities for Retirement Pensions

    The private sector has been bailing on providing pensions for employees over the last few decades. Now, it appears legislation to …Read More »
Get Newly Released Annuity Guys® Videos on Saturday Mornings
  • Annuity Guys Videos - Annuity Answers
  • New Annuity Guys Videos
    Our Entertaining & Informative
     Saturday Morning Video Blog
  • Timely Retirement & Annuity Issues - Easy Opt Out

  • Fixed Index Annuity & Hybrid Annuity Info

    MarketFree® Fixed Index Annuity Case Study…Case Study:  In November of 2006, Jan and Steve, a couple concerned about the security of …Read More »
  • Choosing an Immediate Annuity

    Choosing an Immediate Annuity

    In the golden era of career based retirements, everyone could count on a company paycheck for life in retirement. Unfortunately, in …Read More »
  • Hybrid Annuities as an Inflation Hedge

    Hybrid Annuities as an Inflation Hedge

    Inflation – this one word strikes terror in the hearts of many retirees on a fixed income.Never to fear, we have a cost of …Read More »
  • Do Annuities Answer High Retirement Costs, Best?

    Do Annuities Answer High Retirement Costs, Best?

    The closer you are to retiring, the easier it is predicting how much income you will need in retirement to be comfortable and enjoy the …Read More »
  • Can Annuities Protect Your Spouse if You Die First?

    Can Annuities Protect Your Spouse if You Die First?

    All kidding aside, when you stated your wedding vows, you likely stated something similar to “I take you to be my …Read More »
  • Why Should Anyone Rely on an Annuity?

    Why Should Anyone Rely on an Annuity?

    By protecting your income foundation with an annuity or annuities — and including Social Security and/or a pension as non-commercial …Read More »
  • Are Annuities Improving With The Economy?

    Are Annuities Improving With The Economy?

    Annuities have been on a significant growth upswing since the equities market started tanking in 2008. So if annuities were …Read More »
  • Is an Old Variable Annuity Better than a New Hybrid?

    Is an Old Variable Annuity Better than a New Hybrid?

    “Don’t buy an annuity! The **guarantees they offer are often unnecessary and costly.” – has turned into “that annuity sure …Read More »
  • Millions of Pensions Dumped – Can Annuities Fill the Gap?

    Millions of Pensions Dumped – Can Annuities Fill the Gap?

    Every time you turn on the news it seems we are bombarded with information on pension reform or the scaling back …Read More »
  • Can a Hybrid Annuity Uncapped Index Pay Higher Interest?

    Can a Hybrid Annuity Uncapped Index Pay Higher Interest?

    Should annuity buyers be giddy because they can own an annuity with no limiting upside cap and of market loss? Well, maybe, …Read More »

 

Empowering Annuity Reference Book

 
Start Reading Now - Instant Download
  • Annuity Guys Reference Book - 250 pages of Annuity Facts

  • "The New Retirement"
    Annuity Reference Book 
    Free Instant Download
  • Confidential - Easy Opt Out
 
Comprehensive Site Terms and Disclosure | Privacy Policy | Copyright © 2021 Annuity Guys®


  ** Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Annuities are not FDIC insured and it is possible to lose money.
Annuities are insurance products that require a premium to be paid for purchase.
Annuities do not accept or receive deposits and are not to be confused with bank issued financial instruments.
During all video segments, Dick and Eric are referring to Fixed Annuities unless otherwise specified.


  *Retirement Planning and annuity purchase assistance may be provided by Eric Judy or by referral to a recommended, experienced, Fiduciary Investment Advisor in helping Annuity Guys website visitors. Dick Van Dyke semi-retired from his Investment Advisory Practice in 2012 and now focuses on this educational Annuity Guys Website. He still maintains his insurance license in good standing and assists his current clients.
Annuity Guys' vetted and recommended Fiduciary Financial Planners are required to be properly licensed in assisting clients with their annuity and retirement planning needs. (Due diligence as a client is still always necessary when working with any advisor to check their current standing.)



  # Investors should consider the investment objectives, risks, charges and expenses of a variable annuity and its underlying investment options. The current prospectus and underlying prospectuses, which are contained in the same document, provide this and other important information. Please contact an Investment Professional or the issuing Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.


  ^ Investors should consider investment objectives, risk, charges, and expenses carefully before investing. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.


  ^ Eric Judy offers advisory services through Client One Securities, LLC an Investment Advisor. Annuity Guys Ltd. and Client One Securities, LLC are not affiliated.


692 SHARES