What a great catch! Thanks for finding these references.Looks to be the one-year point-to-point with performance trigger interest crediting method. Note that the trigger rate can change each year of the five year term.
https://gafg.widen.net/s/lmnhzjw2bq/fia ... nt-trigger
If you are a financial professional (wink wink), you can see the current rate sheet here.
https://www.globalatlantic.com/professi ... ion-ii/all
Ron
Let's look first at the second link, which is the "financial professional" sheet for current rates. If you page down to the “Performance Trigger” crediting strategy, you’ll see that the current rate as of 5/20/24 for the “one year point to point with performance trigger” was 9.00% for a 5 year surrender charge period and a premium amount of $100k or higher. So that APPEARS to confirm what OP was told - growth of S&P gives 9% credit, decline gives 0% credit.
While we’re at it, let’s look in on this same page at the bottom. The “fixed rate” for this product (5 years, $100k plus) is 4.90%.
Now let’s turn to the first link. On the first page, in blue print, it clearly says “Trigger rates are declared in advance and are guaranteed for the entire one year term strategy, but may change for future strategy terms. So this is a one year strategy - no guarantees thst the 9% will continued beyond the first policy year.
Going back to the rate sheet - it is typical for life insurers to set interest and crediting rates so they are indifferent as to which rate is chosen. Looking back on the second link, that infers that a 9% trigger rate is equivalent to a 4.90% fixed rate.. In other words, the insurer will make the same margin, and you will get the same yield over time, if you choose the 9% trigger or the 4.90% fixed rate.
Now, for the important question. Why would you choose a product that gives you 4.90% fixed rate, with no guarantee after the first policy year, when the same company will give you 5.30% for the full 5 years on their MYGA, with rates fully guaranteed? It sounds like a bad choice to buy the indexed annuity over the MYGA.
And the even more important question - why would the agent recommend the indexed annuity, and not the MYGA? There’s a great chance that he’ll make 2x-4x more commission on the indexed annuity than on the MYGA.
In summary, the indexed annuity is a horrible, terrible, no good, very bad choice for you. The interest rate you’ll earn over time is lower than on a MYGA, because the agent makes more commission. And as I said above, you can get higher rates than Global Atlantic from other companies with the same rating.
Run away. Ran away fast. And stop talking to the salesman who is feeding you such garbage.
Post back with questions.
Statistics: Posted by Stinky — Tue Jun 04, 2024 4:29 am