Posted by "Deposit 25, interest rate 1.x%, and an account opening bonus of $1000"Is this kind of bank reserve advertisements, is it often seen, and it's very exciting? Whether you're heart-warming or not, I'm thinking about it every day.
It was not until later that after taking 0.01% of bank interest for many years, I learned that the interest rate of annuity accounts issued by life insurance companies is usually higher, and it is unambiguous to send out account opening incentives.
However, there are many types of annuity accounts in the U.S. market, and there are even more products. Before we start, we have to get a rough idea.What does the "interest rate" mean for different types of annuities in the United States?Does interest rate refer to the rate of return?And how to find annuity insurance products with the best "interest rate".
1. The "interest rate" of fixed-rate annuities
Fixed interest rate annuityGive a "fixed" interest rate. "X-year annuity account base interest rate is 2.0%, bonus bonus 1%*", this is a common promotional advertisement for life insurance companies to attract depositors.
eg A certain annuity product provides 25% income reward (2020/12/14)
Fixed-rate annuities are very similar to bank time deposits.Interest rate becomes the main contrast factor.
If we openedFixed interest rate annuity account, The funds in the account will be compounded according to the agreed "annual interest rate".
in"What is Fixed Annuity?"In the article, we gave a detailed explanation.
2. The "interest rate" of index annuities
The account opening promotional advertisements for this type of annuity account are usually, "Deposit $10,000, guaranteed to increase to $20,000*","10% of the principal for opening an account*"and so on.
Index annuityThe value-added "interest rate" is divided into a guaranteed interest rate andCapped interest rate, The annual income is not fixed.The actual rate of return in the annuity account will not be lower than the guaranteed interest rate or higher than the capped interest rate.
eg Different capped yields in an index annuity product (2020/12/14)
Simply put, we have traded part of the income potential, in exchange for the insurance company to bear all the risks of the stock market decline.
According to different insurance companies and insurance products, the spread between the guaranteed interest rate and the capped interest rate is usually between2% to 5%between.As of January 2022, index annuity accounts linked to SP1, the market averageThe capped rate of return is 3.5%.
If we want a better interest rate range, some insurance companies allow us to pay the cost to buy this higher income possibility.
3. Interest rates of securities investment annuities
This type of annuity account is a securities derivative product and is subject to dual supervision by the Financial Supervision Bureau and the Insurance Bureau.
Since our premiums go directly to the stock market, therefore,Securities Investment AnnuityNo guaranteed rate of return can be provided.The annual rate of return of this type of annuity account is directly determined by the trend of the underlying stock market and the actual annual return.
This type of annuity account usually buys mutual funds, which is why the securities investment annuity is also called "fund insurance" and "fund annuity".Account income rises and falls with the current market fluctuations. The actual rate of return in the account each year is directly related to the investment objects we choose in the annuity account.
Because of this feature, when we receive a copySecurities Investment AnnuityIn the account opening quotation and proposal, the value on the file will review the past "annual" income situation, and predict the possible return based on historical market performance for the reference of the insured.
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4. Interest rate of spot annuity (income annuity)
For those who start withdrawing money immediatelyImmediate income annuity, Its interest rate is determined according to the age, gender, and payment cycle of the insured person at that time.Although we start to receive the money immediately, we will also receive a portion of the interest income.
选择Immediate income annuityIf it is, the implicit interest rate is not the core factor we consider.The key is to see how much money you can get each year.
It is generally believed that in a higher interest rate environment, immediate annuities will provide higher income.
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Article summary
These four categoriesAnnuity products, Corresponding to the different investment risk tolerance of the insured, and different usage scenarios, "High-risk, high-yield expectations"The same principle applies to annuity insurance.
"Fixed rate" annuitiesThe risk is the lowest, but the rate of return is also the lowest. Its rate of return means that the money we deposit in the annuity will continue to compound with a fixed "interest".So it is often usedAsset hedging.
"Index" annuityThe risk is in the middle, and it is generally believed that the rate of return is higher than the "fixed rate" annuity.Its interest rate refers to the rate at which our account funds will increase in value based on the increase in the market index. The interest rate is not fixed, but the rate of return is guaranteed to be above 0%.usuallyThe actual annual rate of return is as low as 0% and the highest is determined based on the functions of different products, and the income is uncertain.
"Securities Investment" AnnuityThe risk is higher and is generally considered to have the highest profit potential.Its interest-bearing interest rate refers to the rate of return when our funds directly enter the selected securities fund and follow the rise and fall of market fluctuations. Therefore, there is a possibility of loss of principal.The benefits are uncertain.
According to our age, asset portfolio, and risk tolerance, we can determineWhich type of annuityMore suitable for yourself.Subsequently,Through comparison and understandingDifferent credit levelsInsurance company, the interest rate of this type of annuity account,It will eventually help us find annuity products suitable for ourselves and our family members. (End of full text)
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*Marketing advertisements are colloquial descriptions, not actual promises. For the specific annuity deposit reward system, please refer to the specific English descriptions of each product of the insurance company.
