How to choose the right policy for your situation and get the strongest financial guarantees.
All of these policies will have time frames associated with them such as 4, 7, or 10 years. If you cancel before the time frame is up the insurance company will charge you a penalty. Generally the longer the time frame the more financial incentives the companies will give such as higher caps and bigger bonuses. However, it is important to look closely at bonus because sometime higher bonuses can mean lower caps and higher surrender charges.
Most policies allow you to take out up to 10% per year starting after 12 months in most policies, since you are tying up money for a specific time you want to make sure you have other money that is liquid and available for emergencies. If you exceed the 10% withdrawal provision the insurance company will charge you a surrender charge.
Again, if you cancel before your time frame is up they will charge you a surrender penalty as well. Charges can start as highs as 18% and decrease each year. So, if you cancel early you will lose money. It is very important to match the policy with the particulars of your financial situation and make sure it is appropriate.
As side note: there are very good index annuites with short time frames such as 5 years. If you are a senior or retiree beware of long surrender periods. Stay with 5 year terms unless you have a very specific situation that warants a longer term.
Other downsides: You have a maximum cap on gains or the insurance company deducts a spread from any gain.
Way the caps and surrender period with what we consider the upsides:
- Guarantee your principal against market losses
- Lock In any indexed interest you gain each year
- Automatically reset your index position on your anniversary to take advantage of market rebounds
- Charge you no fees or set up charges in most cases unless you are adding riders- Call for more details: 480-970-5663
Guarantees
The companies we use have some of the highest financial ratings available. They are required by law to maintain legal reserve requirements. At Equity 4 Profit, we are one of the few independent agencies and we are not captive to any one company. We simply look at all the policies on the market and see which ones perform best. Financial and ratings info on specific companies we use are available on request. Just give us a call or email us and we can send them out to you.
The important thing to do is have liquid funds available for emergencies and to match the time frame of the policy with your individual situation. We are experts in helping you do this. If you haven’t already, take a few minutes and watch this short video.
If you have questions or would like a no-obligation, no-cost review you can call us at 480-970-5663 or send us an email.
