Explaining Annuity Filters Under the FIA Marketplace

Think of our marketplace like an online shopping site for retirement products. Just like you use filters on Amazon to find a specific product, I use these filters to find the right annuity for you based on your needs.

2. Explain the Common Filters

Walk them through the most used filters, starting with the most straightforward.

• Term (Surrender Period): This is the length of time your money is committed to the annuity. If we choose a 7-year term, it means you'll have to pay a penalty if you pull out too much money before those 7 years are up.
• Bonus Premium: Some annuities offer a bonus—an extra percentage of money added to your initial investment. I can filter for products that have this feature. A bonus is a great way to jump-start your account value and accelerate your accumulation, helping you get to your financial goals faster. It's also a common strategy some people use to help pay for a surrender charge if they need to get out of an old annuity and into a new one.

• Free Withdrawals Allowance: This is how much of your money you can take out each year without a penalty. I'll help you choose a percentage, like 10%, to make sure you have some access to your money if you need it.

  Free withdrawal on account value vs. premium: This is a key difference.

  • Premium: You can withdraw a percentage of the original amount you put in, every year. This is great for stability because the amount stays the same.
  • Account Value: You can withdraw a percentage of the current value of your account, including any growth. This means you can potentially take out more money if the annuity has grown a lot.

3. Break Down the "Add-Ons" (Riders and Waivers)

Explain that riders are optional benefits and use a simple metaphor for waivers.

• Rider Types: These are optional benefits we can add for an extra fee. We can filter for ones that provide specific protections.
  • Lifetime Income: This rider guarantees you'll receive a paycheck for the rest of your life.
  • Lifetime Income with Doubler: This can double your income stream if you need long-term care.
  • Death Benefit: This ensures a specific amount of money goes to your family if you pass away.
  • Increasing Income: This is a benefit that grows over time to help your income keep up with the cost of living.
• Waivers: Think of these as "get-out-of-jail-free" cards. They let you take out your money without a penalty under specific circumstances, like a terminal illness or being confined to a nursing home.
• ROP (Return of Premium): This is a guarantee that you'll get back at least the amount of money you initially put into the annuity, no matter how the market performs.

4. Explain the Technical Stuff (For Indexed Annuities)

This section is for explaining the mechanics of Fixed Indexed Annuities (FIAs). Frame these filters as the "safety guards" that protect their money while allowing for growth.

• Premium Flexibility: This determines how and when you can pay into the annuity.
  • Single Premium: You make one payment to start the annuity.
  • Product Life: You can add more money over the entire life of the contract.
• MVA (Market Value Adjustment): A behind-the-scenes adjustment that can change your withdrawal amount based on what's happening with interest rates in the wider economy.
• Averaging Type & Reset Periods: The insurance company uses an index (like the S&P 500) to calculate your interest, but they don't just use a single day's value. We can filter for different methods that smooth out the market's ups and downs. A common strategy is an annual reset, which "locks in" your gains each year so you don't have to worry about a previous year's gain being lost.

• Index Age: This shows how long a specific investment strategy has been around. A longer history (like 25 years) gives us a better idea of how the strategy has performed in different markets, both good and bad.

  Cap, Participation Rate, and Spread: These are the three main ways the company limits your potential earnings in exchange for protecting your principal.

  • Cap: A limit on how much you can earn in a given year. For example, if the cap is 5%, that's the maximum interest you can earn, even if the index grows more.
  • Participation Rate: The percentage of the index's gain you get. For example, if the index grows by 10% and the participation rate is 50%, you get 5% of that growth.
  • Spread: A percentage that is subtracted from the index's gain. For example, if the index grows by 10% and the spread is 2%, you earn 8%.
• Strategy: This filter lets you see the specific method used to calculate your interest. For example, Point-to-Point compares the index value at the beginning and end of the term.

Disclaimer

This document is for educational purposes only and is not a substitute for direct product training. You are responsible for ensuring that all information you provide to clients is accurate and sourced directly from the annuity carrier. You are not to rely solely on this guide for your product knowledge. You must consult the official brochures, product guides, and your upline for clarification on all annuity products and their features. By using this guide, you acknowledge are responsible for all client-facing representations.