Wednesday, September 12, 2012
My last blog post was about Allstate's new Deferred Income Fixed Indexed Annuity product. Though I was critical of the video's presentation, I should clarify that this may still be a suitable financial product for some retirees. Often retirement income is more about avoiding the loss of capital than maximizing returns. What got my goat about the video was that the accompanying PR announcement explained the video as a simple and easy-to-understand description of the product. I found the video to be anything but with the convoluted explanation and no indication about how the fees would cause the contract value to deviate from the hypothetical guaranteed benefit base. I still don't know about fees as it isn't particularly convenient for me to call a sales agent on the phone during normal US business hours, being that I'm on the opposite side of the world. They don't seem to otherwise provide the information on the Internet.
Since then, Professor David Littell of the American College shared a link with me for a video interview he did with Curtis Cloke of the Thrive Income Distribution Solutions company. This video runs 40 minutes and provides an excellent explanation about how these sorts of deferred income fixed indexed annuities actually work. This video will be included as an educational resource in the new Retirement Income Certified Professional (RICP) designation now offered by the American College.
The embedded video "How Are Deferred Variable Annuities with Guaranteed Benefit Riders Used in Retirement Planning?" is below. Though the discussion is somewhat advanced and geared toward advisors, I think this is a much better educational video and it can be understood by sophisticated consumers as well.