Legacy Marketing Group, an insurance marketing organization, recently brought Sheryl Moore to Phoenix to brief affiliated financial professionals on the state of the indexed market.
Moore — the president of Wink Inc., a financial services data company, and the head of Moore Market Intelligence, a firm that tracks the indexed insurance product markets — has access to broad, deep indexed annuity product databases that stretch back for years.
Here are five glimpses of the indexed annuity insights in the databases, drawn from a slidedeck Moore used in the presentation.
1. The typical contract sold is getting bigger.
Wink figures show that the typical premium increased to about $121,000 per contract in 2017, from about $54,000 in 2008.
2. In recent years, commission rates have been falling.
The typical Indexed annuity commission fell close to 6.1% in 2017. That’s down from about 6.2% in 2016, and down from more than 6.6% in 2014.
3. The typical return cap has been increasing.
Wink records show the typical cap was about 4.8% in 2017. That’s up from 3.6% in 2016.
4. The typical surrender charge period is 10 years.
Wink records show that about 44% of indexed annuity sales involve contracts with 10-year surrender charge period. Only 0.1% are for products with surrender charge periods of four or fewer years; 2.5% are for products with surrender charge periods of 15 or more years.
5. The S&P 500 index is still the dominant index.
In the third quarter of 2018, about 52% of indexed annuity sales involved use of the S&P 500 stock index. The only other individual investment index with a sales share over 1% was the Nasdaq-100 index, with a 1.8% share.
— Read 6 Questions for Sheryl Moore, a Life and Annuity Tracking Rockstar, on ThinkAdvisor.