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How To Swap a new FIA for an existing FIA and Prosper

By , with Annuity FYI

The Annuity Rescue Program is an option to exit your current fixed index annuity (FIA) and replace it with a new one that offers a generous bonus and a far better index participation rate on a growth-oriented FIA or a much better guaranteed income payout rate on an income-oriented FIA.

These are challenging times in the interest rate environment and the impact registers negatively in the pocketbook, the financial markets and elsewhere. But while this is unnerving, it also can be an excellent opportunity for folks who bought a fixed index income annuity (FIA) — arguably the most popular annuity of all — in recent years.

What these people can do is capitalize on a so-called annuity rescue program, which is an option to exit your current FIA and replace it with a new FIA that offers a generous bonus and a far better index participation rate on a growth-oriented FIA or a much better guaranteed income payout rate on an income-oriented FIA. The bonuses in these new, select annuities would largely compensate for the surrender charge folks would have to pay to exit their annuity prematurely. Meanwhile, higher index participation rates or monthly payouts make the new FIA markedly more enticing.

The chief reason why offerings are more attractive today are the sky-high increases in interest rates, which pressure annuity purveyors to offer better deals to remain competitive against other investments,  such as bond mutual funds, which also offer much better terms these days.

The rescue program may be particularly compelling to investors who bought a growth FIA last year – a terrible one for the stock market. They got off to a squeamish start. They didn’t lose any money – FIAs are guaranteed not to lose financially. But they didn’t make any money, either, and investors may be unhappy with the performance. Mostly, 2022 was a reminder that markets go down, as well as up. 

The only way to rectify this is to pocket superior index gains in a good year. Or an investor can opt for bigger guaranteed income payouts vis-à-vis a new income FIA going forward.  “The annuities in the rescue program are not cheaper, but they produce better performance over their lifespan,” explains an annuity broker familiar with the rescue program.

One particularly attractive growth FIA in the rescue program is Athene Performance Elite, which offers a bonus of as much as 20%, depending on variables. Owners who invest in BNP Paribas Multi-Asset Diversified 5, a low-volatility index, enjoy an index participation rate of 290% – up from barely more than 200% a year ago and even less before that. Another option in this annuity is Nasdaq FC, which invests in both Nasdaq and cash. The index participation rate is currently 190% — up from 135% a year ago.

An attractive income FIA is Sentinel Security Life- Summit Bonus 10, which is currently paying the highest guaranteed lifetime income payout in a FIA ever. As an example, a married couple in Florida, each 65 years old, who invests $100,000 in this annuity and defer payouts for five years would receive $10,933 annually – up more than 40% from what they would have received two years ago. Today, the average competitor would pay roughly $1,000 less annually. Sentinel Security Life- Summit Bonus 10 also offers an initial bonus of 15%.

Those who purchase such a strong income annuity usually stick with it indefinitely because roughly an extra $1,000 year in and year out adds up to quite a bit over time.

Fresh and compelling financial-related opportunities crop up now and then and may have a relatively short lifespan. In the case of the rescue program, it will eventually be curtailed by declining interest rates. Based on the Fed’s latest meeting and discussion of rate drops in early 2024, interested investors should explore the annuity rescue program sooner rather than later.

Complete the form below or call 866-223-2121 to see if you are a good candidate for the Annuity Rescue Program.

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