Today's Top Ten Fixed Annuity Rates (MYGA)
Comparing a Pre-Issued Annuity ™ To a Hybrid Annuity
Both of these annuities are unique in what they accomplish and occasionally in some ways may overlap each other with similar results. The Pre-Issued Annuity ™ is better suited to a higher yield than standard fixed annuities or fixed index annuities – frequently referred to as hybrid annuities. The hybrid annuity on the other hand is better suited than the Pre-Issued Annuity ™ at providing a pension styled income that can never be outlived. Hybrid Annuities protect better against longevity risk and when left in deferral typically produce a higher future income with **guarantees for the security of never running out of future income.
Hybrid Annuity Advantages:
- Flexibility in design during the initial set up.
- An income rider option that **guarantees contractual future lifetime income for a single or joint payout.
- Accelerated (typically 5%-8%) growth of the income account in deferral to maximize future lifetime income payouts.
- Potential inflation hedge of annually increasing income.
- Typically, 10 percent annual penalty-free withdrawals.
- Majority control of approximately 90% of the full account value with a declining surrender charge bringing 100% control typically over a ten-year period of time.
- All unused cash account value transfers to heirs.
Pre-Issued Annuity ™ Advantages:
- Typically a high Annual Percentage Yield of 5% to 8%
- Predictable future income or lump sum payments.
- Payment stream is transferable to heirs.
- Allows income based on yield with original principal remaining intact.
Hybrid Annuity and Pre-Issued Annuity ™ Shared Advantages:
Safety — each are typically backed by highly rated insurance companies and tightly regulated by state insurance commissions with **guarantee associations.
- IRA compatible.
- Can be inherited.
- Non securities correlated assets
- Remove market volatility
- Tax deferred growth on any remaining balance.
- Give Peace of Mind in Retirement
Hybrid Annuity Disadvantages:
- Cash account produces a low annual percentage yield typically 2%-4%.
- Indexing can limit growth of the cash account to zero in years that the securities market is flat or down.
- Once the annuity leaves the deferral stage to begin the income stage the higher roll-up growth in the income account ends.
- Income Rider Fees typically range from .5 % to about 1.5%
- Surrender fees are typically as high as 10%, not counting the return of any added bonus.
- Surrender fees typically decline over a ten-year period before coming to an end.
Pre-Issued Annuity ™ Disadvantages:
- Lack of liquidity beyond the scheduled payment stream or future lump sum payouts.
- When liquidated prior to maturity losses can be substantial.
- Lack of flexibility to structure as needed. It must be accepted as offered.
- Involves a court order process which commonly takes up to ninety days.
- Escrow is required of approximately 10% to 20% when committing to a particular Pre-Issued Annuity ™
- It is possible to have the court order process fail and have to start anew after your escrow is refunded.
- High yielding life contingent contracts may be paid in full principal and yield due to date if the annuitant dies prematurely. The balance of funds will need to be reallocated to reach the originally desired objectives.
- An expert attorney should be retained to assure a successful and accurate transfer of ownership.
- To many highly compensated salespeople lacking the expertise or resources needed to deliver the best available choice.
Hybrid Annuity and Pre-Issued Annuity ™ Shared Disadvantages:
- Limited Liquidity.
- No FDIC protection.
- Best results only happen when held to maturity with Pre-Issued Annuities ™ or beyond with Hybrids.