What Do Fixed Index Annuities, Equity Index Annuities and Hybrid Annuities Have in Common?
Annuity Reviews, Scam Alerts & Complaints!
Equity Index Annuities were introduced in 1995; they are defined as, a Fixed Index Annuity (FIA). Hybrid Annuity is simply a marketing term, it is, in fact, no specific annuity or brand of annuity at all! However, it is typically used to promote FIAs as safer, higher growth and income annuities for retirement. Fixed index annuities have been maligned as a gimmick and even targeted by false scam alerts when… [continued below video]
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. During this segment, Dick and Eric are referring to Fixed Annuities unless otherwise specified.
[continued] …in fact, they are nothing more than a safe fixed annuity with the ability to earn some extra interest by using a market index as a benchmark. These annuities have considerably fewer complaints than variable annuities#. In fact, many now consider hybrid index annuities as an optimal retirement solution, thus making it one of the most popular annuity’s purchased for retirement in recent years. Most of the complaints about hybrid annuities focus on their complexity; however, any financial product that’s able to solve multi-faceted retirement concerns is likely to have some degree of sophistication. Many of the advisors who criticize fixed index annuities have a practice focused on securities, and by offering critical reviews of annuities they hope to convince trusting investors to swallow to their heavily biased sales pitch.
Pros and Cons of Hybrid Annuities and Fixed Index Annuities
Hybrid annuities also referred to as hybrid income annuities are essentially a type of insurance contract allowing the account owner to allocate his or her assets into a fixed annuity with a market benchmark component, having an income rider or riders that give substantial present or future **guarantees to secure a variety of retirement objectives.
These annuities refer to a combination of several unique aspects of various types of annuities that have been combined. Technically, a hybrid annuity is a fixed indexed annuity with an innovative new generation income rider attached to it.
Some hybrid annuities can help to resolve the concerns with regard to other needs in addition to asset growth and retirement income––such as long-term care funding or wealth transfer to heirs––while still providing one with a secure income. These annuities are considered by many to be the answer to satisfying a combination of retirement objectives combined into one solution, thus having the potential to solve several issues in retirement.
Obtaining a hybrid annuity essentially works the same way that you choose any annuity, in that making an allocation begins by choosing the hybrid annuity after comparing rates, features and ratings that meet key retirement objectives and then funding the hybrid annuity contract with a licensed agent as the final step.
With some hybrids, if funds are required for needs such as long-term care, with certain hybrid annuities, owners can have access to withdrawals for that purpose by way of an accelerated cash account payout or a **guaranteed increased income payout, in some cases for as long as it is needed. However, if they do not need the funds for that purpose, they will receive their lifetime **guaranteed retirement income just as it was structured or use the annuity for moderate growth as a secure asset foundation to balance their portfolio. There are half truths rampant on the internet about hybrid annuities check out some facts and fiction that is often perpetrated below, here are some pros and cons.
Fixed Index Annuities Fact or Fiction / Hybrid Annuities Fact or Fiction… Know the Truth
As hybrid annuities are not an actual specific annuity (hybrid describes the combination of benefits offered by various types of different annuities combined into one), there are many misconceptions about how these annuities work as well as about how the benefits are received. Therefore, it is important to fully understand what fact is and what fiction is when it comes to hybrid annuities or hybrid income annuities.
Fact or Fiction? — If retirees use their annuity account value, they will not be eligible to receive any long-term care benefit dollars. — Fiction!
The truth is that on certain hybrid types––even if retirees use all of the account value in their hybrid annuity for **guaranteed retirement income needs––if they opted for the additional long-term care or income rider, then they will still be able to receive a certain dollar amount for a long-term care need as well. This essentially can be an answer that gives them the best of both worlds and a long-term care payout that’s **guaranteed.
Fact or Fiction? — If one dies before he or she has used his or her hybrid annuity funds, there will be nothing left for his or her heirs. — Fiction!
Unlike some other types of immediate annuities, with a hybrid annuity, should one pass away before using up his or her annuities cash value, his or her heirs typically will receive all of the remaining dollars with no penalties or surrender charges.
This can be extremely comforting for those who want their children or heirs to receive a substantial inheritance, yet also need the benefit of **guaranteed retirement income and funds for potential long-term care expenses.
Fact or Fiction? — Because of the market indexing component, hybrid annuities are risky. — Fiction!
The facts are that hybrid index annuities offer interest crediting that is linked to the upside growth of popular stock indexes, without the downside risks of loss in those markets. Also, index annuities are insured and **guaranteed assets, and can be used as part of a predictable and comprehensive financial plan.
They are also excellent retirement and estate planning financial tools because they are built with contractual **guarantees. In fact, these types of annuities are quite suitable for the funds that should not be put at risk of market loss––such as allocations directed to a safe retirement account––since the principal is **guaranteed against stock market losses.
Fact or Fiction? — Hybrid fixed index annuities have high fees like variable annuities#. — Fiction!
No fee is one of the great advantages of hybrid annuities other than the income rider fee of typically less than 1 percent (which is optional) hybrid annuities have no fees or in rare cases have a very low fee known as a spread. A spread simply means that if there is no gain, there is no fee.
Fact or Fiction? — Hybrid annuities protect principal and lock in earnings. — Fact!
Never going backward with principal or earnings is a benefit that makes hybrid annuities so popular. This is because the chassis for a hybrid is a fixed annuity with a market indexing option also known as a fixed index annuity.
Fact or Fiction? — Hybrid annuities give the full upside of a popular market index with no downside risk — Fiction!
Unfortunately, overzealous insurance salespeople have misrepresented hybrid annuities as getting the full upside of the market. It is true however that there is no downside risk. Hybrid annuities have caps, averaging spreads and participation rates that limit upside gain in return for no downside risk. Ironically this does allow hybrid and other fixed annuities with indexing options to do better than the market indices they are indexed too when market conditions are volatile, flat or down over a period of several years.
Using OutCome Based Planning™ for Your Retirement
We practice and recommend a "Holistic - OutCome Based Planning™ process when considering annuities." This approach has the effect of balancing your overall portfolio so you can meet your retirement objectives by "first identifying the least amount of your investments or savings (if any) that should be considered for annuities." OutCome Based Planning™ analyzes and models multiple outcomes so you can clearly identify your best income and growth opportunities.
"The Annuity Guys will only call if you request help". Hence, when you are ready for specialized help we will be available."Working with an Experienced Fiduciary Financial Planner can help you Avoid a Trial & Error or Risk Based Retirement"
This type of approach does take considerably more time, effort and analysis which will show you mathematically the successful possibilities by comparing various outcomes rather than trying to sell or convince you of that "so-called one best solution." Clients frequently tell us that this process removes some of the confusion and emotion to help them objectively identify a better retirement plan; rather than just ending up with the most convincing salesperson or advisor.
When requesting help you can be assured of working with an experienced Annuity Guys' Retirement Planner who is independently insurance licensed and securities licensed as a fiduciary financial planner having access to the vast majority of annuity companies in helping you choose the best annuities using a holistic-outcome based planning approach. We consider the high quality advisor recommendations we make to our website visitors as a direct reflection back on our commitment to serve all client's with a high standard of excellence in financial planning for retirement.
Based on survey feedback on advisors from our website visitors, we eliminated about two-hundred local advisors and now only recommend a few that we consider experienced vetted Annuity Guys' Fiduciary Advisors. Many local advisors continue requesting us to recommend them as a vetted advisor. However, our reputation and future business is driven only by satisfied website visitors. So, unfortunately we've had to tell the vast majority of local advisors no, since we changed our business model four years ago. At that time we stopped trying to satisfy everyone with local advisors, we now primarily work with individuals who are comfortable using today's internet technology to their fullest advantage by working with a select group of vetted, experienced and knowledgeable Annuity Guys' Fiduciary Planners.
Selecting the Best Annuity & Retirement Income Advisor
Are you willing to work with one of our retirement and annuity advisors based on their experience and expertise as a first priority rather than being limited by a local or regional area? The good news is that technology has forever eliminated our geographical limitations and leveled the playing field for everyone! As a result of today's technological advances, all of us can now work confidently with experts in any field including personal finance. We are no longer confined by regional or local boundaries limiting our choices and ultimate success. A high quality advisor is now as close as a click or phone call away.
"There is no room for trial and error when it comes to choosing MarketFree® Annuities or a Successful Retirement Planner."
"There are no undo buttons in retirement so it is vitally important that you do it right the first time!"
We are fortunate to have a select few who we believe are truly the highest qualified advisors out of about two hundred licensed insurance agents that we eliminated. Your survey feedback is what helps us make these tough decisions. Our advisors have an independent financial practice, specializing in annuities and retirement planning, which helps ensure that you are given the best options available for your retirement planning.
"It takes an experienced expert to know how to structure annuities for income, inflation, growth, return of principal, and tax advantage."
"Anyone can sell you an annuity; however, it takes a truly qualified and experienced advisor to know how to structure them for income, inflation, growth, return of principal, and tax advantage. Typically, there is not just one that can accomplish all of these objectives. It is how an advisor structures multiple annuities in balancing your total portfolio that makes it possible to achieve your most important retirement objectives."
Why Searching for the Best Annuities on Your Own Can be so Frustrating...
Almost everyone nowadays turns to the internet for answers on everything - from buying new widgets to researching just about everything under the sun; and finding the best annuity is no exception!At first, it may seem that researching will be straightforward but the more time you spend researching them, the more frustrating it can be. Why is this? First of all, it does not take long to realize that gimmicks abound - such as warnings and alerts from salesmen who just want your attention so they can sell you one or the "too good to be true" claims of 8% to 14% **guaranteed interest and of course the claim that you can get the full market upside with no downside risk! If you have done any research you have heard all of these claims in advertising which are mostly half truths and not fully explained.So how can you find the best annuities on the internet? The truth is... you can't! And what is even more frustrating is all the conflicting points of view from so called experts. There are well over 6,000 different annuities - all designed for different reasons, so is it any wonder that the deck is stacked against the average researcher or do-it-yourselfer. Add to that the fact that they pay high enough commissions to attract a plethora of both good and bad agents. This does not make annuities good or bad; they are simply a financial tool that truly benefit those who use them correctly.How can you find the best annuities for your unique situation?- Use the internet cautiously;
- Work with a vetted and experienced specialist;
- Do not settle for that one dubious best plan. Compare multiple Outcome Based Plans to decide on the one that is truly best for you;
- Be keenly aware of scare tactics and hyperbole - avoid those advisors and websites;
- Avoid websites that are focused on rushing free reports, rates and quotes to get your contact information they are rushing you to speak with them, instead, take your time and choose someone you are more comfortable with that works on your time-table;
- Know the Five Vital Factors (listed above) that an experienced specialist must answer before helping you select the best options for your situation;
- Watch this telling video "Avoid Annuity Gimmicks, Amateurs and Charlatans"...
** 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.
They 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 our website visitors. Dick Van Dyke semi-retired from his Investment Advisory Practice in 2012 and now focuses on this website. He still maintains his insurance license in good standing and assists his current clients.
Our 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.)
Site Terms & Disclosure
- All tools, videos or information visible on this website's pages, television, or other media are for educational and conceptual purposes only.
- Tools, videos or information are not to be considered investment advice, insurance recommendations, tax or legal advice.
- It is recommended that site visitors should work with licensed professionals for individualized advice before making any important or final financial decisions on what is best for his or her situation.
- Website comments are not considered investor testimonials those shown only relate to an insurance agent referral service, customer service, or satisfaction with the purchase of insurance products and are never based on any investment or securities advice or investment or securities performance.
- Please be aware that your feedback and compliments may be shared with our visitors or those that may be interested in our services we will never give out your full name or full address or phone number without your permission. By sending us your feedback & comments you agree to allow us full use in sharing your comments with others in public forums. Thank you for sharing.
- Media logos are not any type of endorsement, they only imply that one or more of the Annuity Guys have written for, been quoted by, or appeared on the listed news outlet, broadcast or cable channels, or branded programs for non-advertising and/or advertising purposes, to offer educational and conceptual information about retirement issues.
- Income is guaranteed by annuitization or income riders that may have additional costs or fees.
- http://www.annuityguys.net & http://www.annuityguys.com forward to https://annuityguys.org. - Further all disclosures and information are to be considered as one and the same for any and all URL forwards, and these same disclosures and information also apply to all YouTube videos featuring Dick & Eric where ever they are viewed.
- MarketFree™ Annuity Definition: Any fixed annuity or portfolio of fixed annuities that protects principal / premium and growth by remaining market risk free.
- Market Free™ (annuities, retirements and portfolios) refer to the use of fixed insurance products with minimum guarantees that have no market risk to principal and are not investments in securities.
- Market Gains are a calculation used to determine interest earned as a result of an increasing market related index limited by various factors in the contract. These can vary with each annuity and issuing insurance company.
- Premium is the correct term for money placed into annuities principal is used as a universal term that describes the cash value of any asset.
- Interest Earned is the correct term to describe Market Free™ Annuity Growth; Market Gains, Returns, Growth and other generally used terms only refer to actual Interest Earned
- Market Free™ Annuities are fixed insurance products and only require an insurance license in order to sell these products; they are not securities investments and do not require a securities license.
- No Loss only pertains to market downturns and not if losses are incurred due to early withdrawal penalties or other fees for additional insurance benefits.
- Annuities typically have surrender periods where early or excessive withdrawals may result in a surrender cost.
- Market Free™ Annuities may or may not have a bonus. Some bonus products have fees or lower interest crediting and when surrendered early the bonus or part of the bonus may be forfeited as part of the surrender process which is determined by each contract.
- MarketFree™ Annuities are not FDIC Insured and are not guaranteed by any Government Agency.
- Annuities are not Federal Deposit Insurance Corporation (FDIC) insured and their guarantees are based on the claims paying ability of the issuing insurance company.
- State Insurance Guarantee Associations (SIGA) vary in coverage with each state and are not to be confused with FDIC which has the backing of the federal government.
- This website is not affiliated with or endorsed by the Social Security Administration.
- *"Best” refers only to the opinion of Dick, this site's author; or the opinion of Dick & Eric in videos and is not considered best for all individuals.
- *"APO” refers only to the Annual Pay-Out of annuities in the guaranteed lifetime income phase. *APO is NOT an annual yield or an annual rate of interest.
- AnnuityRateWatch.com, is only a linked to subscription service, which is not affiliated with this site, it supplies and updates all Annuity Rates, Features Ratings, Fees and Riders. AnnuityRateWatch.com's information is available in the public domain and accuracy is not verified or guaranteed since this type of information is always subject to change.
- Dick helps site visitors when help is requested. Dick may receive a referral fee as compensation from an advisor for a prospective client referral. This helps compensate Dick for time spent assisting site visitors and maintaining this educational website.
- Eric Judy is both insurance licensed and securities licensed. Eric offers securities as an investment adviser representative through Client One Securities, LLC.
- Eric purchases prospective client referrals from Annuity Guys Ltd. and may be compensated by commission for helping prospective clients purchase. Eric may also recommend these prospective clients to an advisor and earn a referral fee or a referral commission split.
- Vetted advisors refers to advisors that are insurance licensed and recommended based on referral experience from satisfied clients.
- Any recommendation of an advisor is only one aspect of any due diligence process. Each site visitor must accept full individual responsibility for choosing a licensed insurance agent/advisor.
- In the event that a recommended licensed advisor/agent is not considered satisfactory, Eric will make reasonable efforts to recommend other advisors one at a time in an attempt to satisfy a site visitors planning or purchasing needs.
- Dick is the website author and editor, Annuity Guys Ltd. is the website owner; Eric is a guest video commentator. Videos gathered from other public domain sources may also be used for educational and conceptual purposes.
- There is NO COST to site visitors when they are given an advisor referral or recommendation.
- By giving the us your contact information such as email, phone number, address and etc. you are giving your permission to be contacted or sent additional relevant information about annuities, retirement and related financial information. We have a NO SPAM policy.
- Accuracy of website information is strived for but is not guaranteed.
- Freedom from virus or malware is strived for but is not guaranteed. Website visitors accept any and all risk associated with damage to any computer for any reason when using this website and hold this website harmless from any liability.
- Use this website like the vast majority of websites at your own risk. No risk or liability of any type are accepted by any business entity or any of the information providers for this website.