5 Indexed Annuity Secrets

Legacy Marketing Group, an insurance marketing organization, recently brought Sheryl Moore to Phoenix to brief affiliated financial professionals on the state of the indexed market.

Moore — the president of Wink Inc., a financial services data company, and the head of Moore Market Intelligence, a firm that tracks the indexed insurance product markets — has access to broad, deep indexed annuity product databases that stretch back for years.

Here are five glimpses of the indexed annuity insights in the databases, drawn from a slidedeck Moore used in the presentation.

1. The typical contract sold is getting bigger.

Wink figures show that the typical premium increased to about $121,000 per contract in 2017, from about $54,000 in 2008.

2. In recent years, commission rates have been falling.

The typical Indexed annuity commission fell close to 6.1% in 2017. That's down from about 6.2% in 2016, and down from more than 6.6% in 2014.

3. The typical return cap has been increasing.

Wink records show the typical cap was about 4.8% in 2017. That's up from 3.6% in 2016.

4. The typical surrender charge period is 10 years.

Wink records show that about 44% of indexed annuity sales involve contracts with 10-year surrender charge period. Only 0.1% are for products with surrender charge periods of four or fewer years; 2.5% are for products with surrender charge periods of 15 or more years.

5. The S&P 500 index is still the dominant index.

In the third quarter of 2018, about 52% of indexed annuity sales involved use of the S&P 500 stock index. The only other individual investment index with a sales share over 1% was the Nasdaq-100 index, with a 1.8% share.

— Read 6 Questions for Sheryl Moore, a Life and Annuity Tracking Rockstar, on ThinkAdvisor.

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5 Indexed Annuity Secrets

1. The typical contract sold is getting bigger.

2. In recent years, commission rates have been falling.

3. The typical return cap has been increasing.

4. The typical surrender charge period is 10 years.

5. The S&P 500 index is still the dominant index.

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5 Indexed Annuity Secrets

1. The typical contract sold is getting bigger.

2. In recent years, commission rates have been falling.

3. The typical return cap has been increasing.

4. The typical surrender charge period is 10 years.

5. The S&P 500 index is still the dominant index.

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