“The mule always appears to me a most surprising animal. That a hybrid should possess more reason, memory, obstinacy, social affection, powers of muscular endurance, and length of life, than either of its parents, seems to indicate that art has here outdone nature.”
Now: The Problems With Hybrid Annuities
It’s critical to take a moment to investigate both the pros and the cons of the hybrid annuity. As with anything, there are downsides to be aware of.
Income- You’re right, we listed this a one of the benefits of hybrid annuities too, however often we find that using an income rider on an index annuity is not the most efficient way to secure guaranteed income.
Complexity: Cap Rates, Participation Rates, Crediting Methods, Spreads:
All index annuities have a learning curve to overcome and hybrid annuities are no exception. It can sometimes be hard to individuals to see the benefits when grappling with unfamiliar terms and calculations.
But, lucky for you, we at Annuity Straight Talk have recorded a superb and concise index annuity training video– just sign up to the right and get started on your way to being an expert in no time. If you can get over the hump and understand how it all works, they really do offer a lot of benefits.
Perception Issues: Income Rider Account Value Vs Real Acct Value:
Perhaps our biggest issue when discussing Pros and Cons of Hybrid Annuities is one of perception and deceptive marketing by others.
If someone is telling you an annuity they offer is guaranteed to go up by some rate, like 8% per year roll up, they are lying to you. It’s deceptive marketing that gives these products a bad name.
Rather, the Income Account Value may be guaranteed to roll up at 8%… but that is not real money you could walk away with. If you don’t understand this concept yet, be sure to sign up and get our Hybrid Annuity Product Detail Report , and also, read up on Income Riders.
Final Negative: Long Surrender Periods- Hybrid annuities with lifetime income riders should be approached as a one way investment that you don’t plan to surrender. You should consider the money invested as a permanent investment in a future lifetime income stream. With that mindset, the long surrender is a non-issue, however if circumstances change, you should be aware that early surrender could be costly.
Hybrid Annuities: Pros And Cons Summary
How does it stack up for you with the Pros and Cons of Hybrid Annuities? Does the cap, participation, spread, and crediting method boggle the mind, or are you fine with the partial participation and see the benefit in downside protection?
Feel free to explore the rest of these pages on Hybrid Annuities, but sometimes it’s best to just give us a call to go over your situation. If you seek a qualified adviser well versed in Hybrid Annuities, please do not hesitate to contact us.