A problem is that each company sets different terms for their index
products, and they change these terms frequently. There is great
variance between companies and between products in many regards -
max/min % gain, guarantee of principal, amount that market must go up
before gains begin, fees, market index used, and then there is the
problem of measuring "gain." Some companies deliberately set their
"returns" a little higher, but they later drive a hard bargain over
payout options and annuitization. I believe that they have mostly
fallen out of favor, thankfully, but I remember "two-tiered"
annuities, where your money compounded at an exaggerated rate ...
until you wanted to withdraw it, and then they re-calculated your
gains using a much lower interest rate. I have seen statements that
say "accumulation value $100,000 distribution value: $50,000." So
the client has $100,000. Unless she wants the money, and then she has
$50,000. What a deal. |
