A recent industry watchdog report indicated an increase of over 25% in premium in 2012 and a forecast of another 30% increase in 2013. Growth is being driven by products offering access to a larger stream of income that would not be found with other investment options. Income for life that is both safe and secure seems to be the driving force.
A recent article from Lincoln Financial Group CEO Dennis R Glass reaffirms that a large and probably long bull run is coming to the annuity and life insurance business. “You now have a good, growing stock market and slowly rising interest rates – that has to be the best economic climate for the life insurance industry,” Glass said last week, speaking during a conference call with analysts.
Inflation is the rise over time in the price of goods and services. Is a loaf of bread higher than it as the year you were born? Inflation is measured as a annual percentage, the same way interest rates are measured as a annual percentage. Is inflation a bad thing? Not necessarily. It means prices are rising because demand is rising, so it is the result of a growing economy. In a healthy economy, wages rise at the same rate as prices. So in a healthy economy, inflation always rises, meaning the same dollar amount is worth less five years from now. Sounds pretty healthy, doesn’t it? Inflation hurts interest rates because lenders know the longer it takes you to repay the loan, the less the money is worth.
Rather than being bound by the terms of the original contract and current tax code, beneficiaries may be able to exchange inherited contracts for newer, higher interest paying contracts, according to the IRS under Private Letter Ruling (PLR) 201330016. This indication of change by the IRS can benefit the beneficiary because newer contracts can have lower costs, higher interest or better features such as policy riders. (income riders)
The simple answer is this: it probably will never be repaid, it has been and probably always be part of our American heritage. The history of US Treasuries is fascinating story in and of itself. It began when our country began. US Treasuries go back to this country’s independence. The Revolutionary War was fought against Great Britain by the colonies as a united front but funded and manned by each individual state.
Private Equity Firms only know one thing, buy, dismantle, reap profits and move on. Their sites are set on our industry and they are coming. In fact, a few are already here, Athene, Guggenheim and others have already planted their flag. With the PE Firms will come new ways of doing things, new ways for Wall Street to invest in our products, things such as buying the investments side, slicing it up and reselling it to fixed interest investors. Who will win and who will lose?
The origin of annuities can be traced to the founding of the United States of America. The first recorded use of annuities was by the Presbyterian Church who used annuity concepts to provide for widows and retired ministers. Benjamin Franklin used annuities to provide for funds over a long period of time for his wife and for the cities of Boston and Philadelphia.
Buying a US Treasury EE Bond can be a great idea if you want your funds held long term and have no need for the funds prior to their 20 year maturity. EE Bonds offer fixed interest rates for the life of the bond. The maturity period for EE Bonds is 20 years, if you redeem the bond in the first 5 years of ownership, there is a penalty affixed. EE Bonds offer safety, market yield and tax deferred interest compounding.
What is the real benefit of Fixed Indexed Annuities? Your funds are fully guaranteed and are safe and secure. Your Fixed Indexed Annuity can only increase. Fixed Indexed Annuities are best suited for people who want to protect their original principal and provide for an increase in funds linked to a major index.
George Harmer, CPA, MBA From Kiplinger’s Retirement Report – May 2013 “There is no guarantee that an annuity ladder would provide more income than if you’d bought one annuity. But research indicates that laddering annuities might boost a nest egg.” “A study by MassMutual Financial group compared several retirement-income strategies including one portfolio made up Read more >>