Rate Change Update

Rate Change Update

February 14, 2018
Share |

This post is an update to my last post regarding "Reducing Risk in A Volatile Market"  The A+ rated insurance company I was referring to just announced a rate change to their fixed indexed annuity. The new participation rate that links you to the J.P Morgan Mozaic II Index allows you to be linked to 160% now (age 65 and under) of what the index gains without the risk minus a 1% spread.

This is called a participation rate so if the index gained 10% the contract would gain 16% minus the 1% spread. One way to figure out how much you should allocate to something with a guarantee of principal is to use your age as a percentage and that's the percentage that should be in things that have guarantees of principal or income or both.

This is a great vehicle for someone who is not seeking income but wants to preserve principal and still participate on the upside of the market. There is no other fee if no rider is added. If you're over 65 then the participation rate is now 150% and the surrender period would be shorter. The rate change becomes effective 02/15/2018.

This strategy is one of the best ways to participate in the growth of the market without the risk associated with it.  Contact my office for more information.