You may have heard about bonuses on Indexed Annuities and they sound too good to be true right?  A lot of people think of them as “free money.” 

Today we will dive into the details on what these bonuses really are so you can understand their value.

As I’m sure you have learned in life, nothing is ever really free. A majority of upfront bonuses come with an annual fee for the life of the policy.  Indexed annuities typically have the highest upfront bonuses.

You want to make sure that you are not buying into a dream but rather a reality that works best for you and your situation.

You want to be sure that annuities you purchase do what you and your family need them to do.  You don’t want to base your purchase on something that MIGHT happen but you aren’t sure about.  Your contractual guarantees will outline what the annuity WILL DO, anything else is not included there as a guarantee.

With that being said, an upfront bonus is just one part of the contractual calculation that you need to take into account when deciding if that particular annuity fits your specific situation.

Let’s talk about an example of this so you can understand better.  When you are looking to calculate a future income stream using an income rider and an upfront bonus, there are many parts to arrive at that contractually guaranteed calculation.  Some of those parts include:

• Upfront Bonus percentage
• Income Rider guaranteed annual percentage growth
• How many years you are going to defer before taking income
• Your date of birth
• The date of birth of the person you might be setting up a joint income stream (i.e. spouse)
• The actuarial percentage that is applied to the total by the annuity company when you take income

Make sense now that it is laid out like that?

If you think that the bonus on the indexed annuity you are looking at is too good to be true, it is.  Upfront bonuses are typically vested, which means that in order to get all of that bonus you will have to stay for the full surrender period of about 10 years for an indexed annuity.

Buying an annuity for the bonus would be like buying a car for the stereo system, or a house for the siding.  You wouldn’t do it then because it makes no sense and you shouldn’t do it for an annuity either.

Upfront bonuses can be a positive if looked at as just one of many parts of the contractually guaranteed calculations needed to make an informed decision.  You need to review everything involved and decide based on your needs if this is a fit for you.  A bonus is just that…a bonus.

 “Get a list of the hottest deals offering high rates of return with safety and security.”

John Bulbrook, Bulbrook Drislane – IN-FORCE ™ Secondary Market, Finance and Investments, Secondary Market, Annuities, Fixed Term Annuities, Life Insurance, Structured Settlements, Previously Owned Annuities, Pre Owned Annuities, Immediate Annuities, Factored Structured, Settlement Secondary Market Annuity, Aftermarket annuity, Inforce fixed term annuities, Inforce fixed term annuity, Inforce annuity, Deferred Variable Annuity, Inherited Annuity, Equity Annuities, Straight Life Annuity, Non Qualified Annuity, Mutual Fund Settlement, 20 Year Annuity, 10 Year Annuity, 5 Year Annuity – Click here for his Facebook,Twitter, LinkedIn, Google Plus