Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
You are right as the death benefits as stated are pretty standard.
Maybe you want to contact blueprintincome.com to share your insightful knowledge?
Thank you very much.
Maybe you want to contact blueprintincome.com to share your insightful knowledge?
Thank you very much.
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Sagicor has what appears to be a "limited time" special rate on its 3-year and 5-year MYGAs. The 3-year is paying 2.30% and the 5-year is paying 3.00%.
That 3.00% rate on the 5-year product is the highest rate available for a duration of less than 10 years for a company rated A- or higher by AM Best.
Based on communications I've received, it appears that this "special" rate expires on 6/30/21. And I've heard from a couple of annuity agents that those Sagicor products are "hot sellers" right now.
I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
That 3.00% rate on the 5-year product is the highest rate available for a duration of less than 10 years for a company rated A- or higher by AM Best.
Based on communications I've received, it appears that this "special" rate expires on 6/30/21. And I've heard from a couple of annuity agents that those Sagicor products are "hot sellers" right now.
I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
Last edited by Stinky on Sat Jun 05, 2021 10:44 am, edited 1 time in total.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I think your assessment is right on the money. Thank you for the “alert.”Stinky wrote: ↑Sat Jun 05, 2021 10:21 am I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Please post back as additional questions come into your mind.Clammypollack wrote: ↑Thu Jun 03, 2021 9:15 pmThank you! This is much appreciated.Stinky wrote: ↑Thu Jun 03, 2021 4:11 pmLet me suggest some questions for you.Clammypollack wrote: ↑Thu Jun 03, 2021 2:34 pm
The last four pages were very informative and educational regarding MYGA’s. I am grateful to those who shared this info. Has it occurred to you that there’s a big difference between reading a significant amount of information on a subject and asking what specific questions a veteran in this area would suggest that a novice ask a seller of the product?
1. Are you confident that you will be able to leave the funds deposited for the entire term of the MYGA? If you make withdrawals from the contract in excess of those permitted (if any), you will be subject to punishing surrender charges.
2. Do you understand guaranty funds, and know what the guaranty fund limits are for your state? You can go to https://www.nolhga.com/ for general guaranty fund info, and then click through on your state website. Make sure you read the FAQs for your state.
3. Do you understand the withdrawal provisions and death benefit provisions of the products that you're looking at? Some contracts allow a 10% annual withdrawal without surrender charges, and pay out the full account value at death while the contract is in force. Others do not allow any withdrawals until the contract is over without surrender charge, and pay out only the surrender value at death.
4. If you're buying in a taxable account, do you plan to make no withdrawals prior to age 59.5? If you do withdraw prior to that age, you'll be assessed a 10% tax penalty on the interest withdrawn, plus incurring regular taxable income.
5. Have you looked at the rating of the insurance company you're considering? In general, higher-rated companies pay a lower rate of interest than those with lower ratings.
Others can chime in with their questions.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs - Blueprint Income vs. Gainbridge vs. Canvas
Hi Stinky,
Thanks for all the info you have provided to help me learn about MYGA's.
Regarding State Guaranty Fund Limits, am I understanding correctly that these limits are relative to each individual company that you have contracts with? Meaning effectively that there is no guaranty limit, so long as your total exposure to any one company remains under your applicable limit amount of $250,000 or $300,000 or whatever the case may be?
I live in Kansas and so far have been unable to see the answer to this question clearly stated, at least to suit me.
Thanks again!
Mark
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
PFM,
“ Annuities
$250,000 in withdrawal and cash values
The maximum amount of protection for each individual, regardless of the number of policies or contracts,
is $300,000.”
https://www.kslifega.org/FAQ
“ Annuities
$250,000 in withdrawal and cash values
The maximum amount of protection for each individual, regardless of the number of policies or contracts,
is $300,000.”
https://www.kslifega.org/FAQ
Re: Purchasing MYGAs - Blueprint Income vs. Gainbridge vs. Canvas
PFM wrote: ↑Mon Jun 07, 2021 8:14 am Hi Stinky,
Thanks for all the info you have provided to help me learn about MYGA's.
Regarding State Guaranty Fund Limits, am I understanding correctly that these limits are relative to each individual company that you have contracts with? Meaning effectively that there is no guaranty limit, so long as your total exposure to any one company remains under your applicable limit amount of $250,000 or $300,000 or whatever the case may be?
I live in Kansas and so far have been unable to see the answer to this question clearly stated, at least to suit me.
Thanks again!
Mark
State guaranty fund laws vary. My state doesn’t have a “per-person” limitation. From HueyLDs comment above, it appears that Kansas does.HueyLD wrote: ↑Mon Jun 07, 2021 8:30 am PFM,
“ Annuities
$250,000 in withdrawal and cash values
The maximum amount of protection for each individual, regardless of the number of policies or contracts,
is $300,000.”
https://www.kslifega.org/FAQ
You could make double-sure by getting in touch with the Kansas guaranty fund.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs - Blueprint Income vs. Gainbridge vs. Canvas
Stinky,Stinky wrote: ↑Mon Jun 07, 2021 8:41 amPFM wrote: ↑Mon Jun 07, 2021 8:14 am Hi Stinky,
Thanks for all the info you have provided to help me learn about MYGA's.
Regarding State Guaranty Fund Limits, am I understanding correctly that these limits are relative to each individual company that you have contracts with? Meaning effectively that there is no guaranty limit, so long as your total exposure to any one company remains under your applicable limit amount of $250,000 or $300,000 or whatever the case may be?
I live in Kansas and so far have been unable to see the answer to this question clearly stated, at least to suit me.
Thanks again!
MarkState guaranty fund laws vary. My state doesn’t have a “per-person” limitation. From HueyLDs comment above, it appears that Kansas does.HueyLD wrote: ↑Mon Jun 07, 2021 8:30 am PFM,
“ Annuities
$250,000 in withdrawal and cash values
The maximum amount of protection for each individual, regardless of the number of policies or contracts,
is $300,000.”
https://www.kslifega.org/FAQ
You could make double-sure by getting in touch with the Kansas guaranty fund.
Thanks for your prompt reply.
Your suggestion to call and ask was good advice, as I did and found that in Kansas, as is the case in your State, there is no per-person limit, only a per-company limit of $250,000. Certainly good news, as I plan to purchase several. I had already read what HueyLD quoted from kslifega and found it to be ambiguous, because there was no mention of company.
Thanks again.
Re: Purchasing MYGAs - Blueprint Income vs. Gainbridge vs. Canvas
Excellent! I agree that the website information is ambiguous. And I’m glad that you were able to get through to the guaranty fund quickly.PFM wrote: ↑Mon Jun 07, 2021 9:12 am Stinky,
Thanks for your prompt reply.
Your suggestion to call and ask was good advice, as I did and found that in Kansas, as is the case in your State, there is no per-person limit, only a per-company limit of $250,000. Certainly good news, as I plan to purchase several. I had already read what HueyLD quoted from kslifega and found it to be ambiguous, because there was no mention of company.
Thanks again.
Please post back if you have questions as you go through the purchase process.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
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Last edited by fatcoffeedrinker on Wed Mar 02, 2022 10:12 am, edited 1 time in total.
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I’m happy that you got your application in. Mine went in last week too, for the five year product.fatcoffeedrinker wrote: ↑Mon Jun 07, 2021 10:05 am Stinky, thanks. I had planned on buying the 3-year in July (rate is actually 2.25% in CA), but have now put my application in early based on your info. Rate is 30 bps better than next closest at 1.95%. Much appreciated.
I’ll continue to keep watching for “rate specials” and post about them when they occur. It’s kind of odd when a company increases its rate by 0.35% on only certain durations for a short period of time, but that’s what Sagicor appears to have done.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Do you have any qualms about locking in a rate for 3 or 5 years given the concerns with inflation picking up?
I have nearly all my retirement in low risk fixed return investments (TIAA, CDs, MYGAs and treasuries). I would love to put more in MYGAs and less in treasuries, but I worry about sudden unexpected inflation.
Anyone else have similar concerns? If not, why not?
I have nearly all my retirement in low risk fixed return investments (TIAA, CDs, MYGAs and treasuries). I would love to put more in MYGAs and less in treasuries, but I worry about sudden unexpected inflation.
Anyone else have similar concerns? If not, why not?
“If trouble comes when you least expect it then maybe the thing to do is to always expect it.” |
― Cormac McCarthy, The Road
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
This is a great question. Let me tell you the way that I think about the risk of rising interest rates as it relates to MYGAs.Toadvine wrote: ↑Tue Jun 08, 2021 2:25 am Do you have any qualms about locking in a rate for 3 or 5 years given the concerns with inflation picking up?
I have nearly all my retirement in low risk fixed return investments (TIAA, CDs, MYGAs and treasuries). I would love to put more in MYGAs and less in treasuries, but I worry about sudden unexpected inflation.
Anyone else have similar concerns? If not, why not?
Let's look at two investments that have the same duration - a five year MYGA and a five year Treasury note. As of 6/7/21, the five year Treasury has a yield of 0.79%, and will mature for par in five years. So, to the extent that a five year MYGA pays more than 0.79% (which almost all do), the MYGA will pay more interest over five years. Both instruments will pay me back, including interest, in five years.
Next, let's shift to a Treasury fund with the same duration (about 4.9) as a five year Treasury note or MYGA. Let's assume that the Treasury fund with the same duration as a five-year Treasury note also has the same yield of 0.79%. Per Blueprint Income, the best current rate for a five year MYGA from an A-rated company is 2.50%. Let's compare the results of the 0.79% Treasury fund to the 2.50% MYGA:
--- If market interest rates remain unchanged over the five year period, the MYGA will pay more interest - 2.50% vs. 0.79%.
--- If market interest rates rise over the five year period, the "interest earned" gap will narrow, and the Treasury fund will earn more interest while the MYGA earns its fixed 2.50%. But this increase in "interest earned" is offset by the decline in the value of the Treasury fund, since the price of a bond fund goes down as interest rates go up.
Let's take a reasonable worst case - the day after you purchase a 2.50% MYGA, Treasury rates rise from 0.79% to 2.50%. In that case, you will earn the same interest on the Treasury fund and the MYGA over the five year period. But, with the rise in interest rates, the Treasury fund decreased in value by roughly the change in interest rates multiplied by the duration; that is (2.50% - 0.79%) = 1.46% X 4.9 = 7.15%. Therefore, you'll suffer a principal loss with the bond fund that you won't suffer with a MYGA. In this case, the principal loss on the bond fund almost exactly offsets the increased interest on the bond fund.
If interest rates go up more slowly during the 5 year term, the advantage for MYGAs grows. For example, if the Treasury bond fund rate grew slowly to reach 2.50% at the end of five years, the cumulative interest earned on the bond fund won’t equal the cumulative interest on the MYGA. But the 7.15% principal loss on the bond fund at the end of the term will be unchanged.
MYGAs both "lock in" the interest rate credited, and guarantee the full repayment of principal at the end of the term. That guarantee of full principal repayment gives them an advantage over bond funds if you expect interest rates to increase.
I can't say that MYGAs will have such an advantage over bond funds forever. But all that I can do now is invest for the market conditions that exist now. And, with Treasury and other bond fund rates so low, MYGAs have an advantage because of both their higher credited rates and their principal guarantee.
Does this help you?
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Alternatively, if you think you may want to early withdraw some money from MYGAs, you can purchase MYGAs from companies that allow reasonable annual fee-free withdrawals and low surrender charges.
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Thank you for the detailed answer Stinky.
I thinking more about staying liquid in the event that inflation rises quickly. So rather than 5 year treasuries as an alternative to MYGAs I have short term treasuries and treasury backed MM funds. Which pay nothing right now. But if there were a large increase in rates i would be poised to jump in.
I thinking more about staying liquid in the event that inflation rises quickly. So rather than 5 year treasuries as an alternative to MYGAs I have short term treasuries and treasury backed MM funds. Which pay nothing right now. But if there were a large increase in rates i would be poised to jump in.
“If trouble comes when you least expect it then maybe the thing to do is to always expect it.” |
― Cormac McCarthy, The Road
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Staying “short” with a portion of your fixed income portfolio is an entirely rational choice.Toadvine wrote: ↑Tue Jun 08, 2021 10:48 am Thank you for the detailed answer Stinky.
I thinking more about staying liquid in the event that inflation rises quickly. So rather than 5 year treasuries as an alternative to MYGAs I have short term treasuries and treasury backed MM funds. Which pay nothing right now. But if there were a large increase in rates i would be poised to jump in.
Best to you.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I have submitted an application for the Sagicor 5-year product in the amount of 200k for myself, and am considering another for my wife in the same amount, as I see nothing else available that is comparable at this time. This would of course keep us well below our State's Guaranty Fund limit.Stinky wrote: ↑Sat Jun 05, 2021 10:21 am Sagicor has what appears to be a "limited time" special rate on its 3-year and 5-year MYGAs. The 3-year is paying 2.30% and the 5-year is paying 3.00%.
That 3.00% rate on the 5-year product is the highest rate available for a duration of less than 10 years for a company rated A- or higher by AM Best.
Based on communications I've received, it appears that this "special" rate expires on 6/30/21. And I've heard from a couple of annuity agents that those Sagicor products are "hot sellers" right now.
I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
I'm looking for advice from the more experienced investors here, and also from those more adept at evaluating the health of Insurance companies. Does anyone have any knowledge of Sagicor Life, good or bad?
Also interested in opinions on the movement of interest rates during the next five years.
Any help will be appreciated.
Thank you,
Mark
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I might also add, since it was the intended purpose of Stinky's great thread, that my experience with Blueprint has thus far been a positive one. I find their website to be informative and easy to use. I spoke with Chet on the phone a couple of times and he was helpful in answering my questions. Of course at this point I don't have anything to compare it with, as I went straight to Blueprint as a result of reading the comments in this thread.PFM wrote: ↑Wed Jun 09, 2021 9:10 amI have submitted an application for the Sagicor 5-year product in the amount of 200k for myself, and am considering another for my wife in the same amount, as I see nothing else available that is comparable at this time. This would of course keep us well below our State's Guaranty Fund limit.Stinky wrote: ↑Sat Jun 05, 2021 10:21 am Sagicor has what appears to be a "limited time" special rate on its 3-year and 5-year MYGAs. The 3-year is paying 2.30% and the 5-year is paying 3.00%.
That 3.00% rate on the 5-year product is the highest rate available for a duration of less than 10 years for a company rated A- or higher by AM Best.
Based on communications I've received, it appears that this "special" rate expires on 6/30/21. And I've heard from a couple of annuity agents that those Sagicor products are "hot sellers" right now.
I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
I'm looking for advice from the more experienced investors here, and also from those more adept at evaluating the health of Insurance companies. Does anyone have any knowledge of Sagicor Life, good or bad?
Also interested in opinions on the movement of interest rates during the next five years.
Any help will be appreciated.
Thank you,
Mark
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I’ve grabbed the Sagicor 5 year product also. Interestingly, this is the fastest issue process that I’ve had on a MYGA within an IRA. It only took five calendar days from the initial application through Blueprint online, through the application verification process, until Vanguard told me that they were sending money out. No company has been as fast.PFM wrote: ↑Wed Jun 09, 2021 9:10 am
I have submitted an application for the Sagicor 5-year product in the amount of 200k for myself, and am considering another for my wife in the same amount, as I see nothing else available that is comparable at this time. This would of course keep us well below our State's Guaranty Fund limit.
I'm looking for advice from the more experienced investors here, and also from those more adept at evaluating the health of Insurance companies. Does anyone have any knowledge of Sagicor Life, good or bad?
Also interested in opinions on the movement of interest rates during the next five years.
I’m relying a good bit on the AM Best assessment process. I’m familiar with how AM Best works, since I worked with them and other rating agencies during my career working for a life insurance company. Best takes their job seriously, assessing financial strength, operational performance, and enterprise risk management, among other items. Best tries to take a long view, making projections of earnings and capital several years into the future.
Here's an extract from the AM Best press release with the most recent affirmation of its rating of Sagicor, dated 9/20/2020. (Rating agencies are continuously monitoring companies, and formally review and issue press releases about every twelve months or so.) AM Best is rating the entire Sagicor group, which includes Sagicor Life Insurance Company as a key subsidiary:
"The ratings of Sagicor Life Inc. reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM). The ratings of Sagicor Life Insurance Company reflect its balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, neutral business profile and appropriate ERM. The ratings of Sagicor Life Jamaica Limited reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate ERM.
"While AM Best has concerns with regard to global economic headwinds impact to operating performance metrics for companies operating in the Caribbean, Sagicor’s corporate structure with more of an international footprint, along with the recent capital raise during the past year mitigates AM Best’s short-term outlook concerns for the Sagicor group of companies. AM Best will continue to track the economic conditions across the Caribbean and take any appropriate rating actions as developments change."
Here's a link to the full press release: http://news.ambest.com/presscontent.asp ... 1600182128
I personally view a company with an A- rating as being overwhelmingly likely to fully perform on a five year contract such as a MYGA. I feel comfortable in buying a 5-year MYGA from Sagicor.
As to future interest rates - who knows? I believe that I'm making a prudent investment in a five year MYGA at 3%, especially compared to a bond fund of similar duration.
--- If interest rates remain stable for the next few years, I win, because my MYGA has earned a spread over the bond fund.
--- If interest rates rise over the next five years, my MYGA will have a narrower spread over the bond fund, but I'll avoid the decline in principal that a bond fund will face when interest rates go up. I regard that as a "win" also.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
i was interested in the sagicor myga but after poking around, learned they are not licensed in ny:
https://www.sagicor.com/-/media/USA-Ass ... 9987347405
We currently are licensed and actively doing business in 45 states, plus the District of Columbia. The only states that we are not fully licensed in are New York, Connecticut, Alaska, Maine, and Vermont, but we do have third-party administration authority in Alaska, Connecticut, and Maine. Our two primary operations are in Scottsdale, Arizona and Tampa, Florida.
https://www.sagicor.com/-/media/USA-Ass ... 9987347405
We currently are licensed and actively doing business in 45 states, plus the District of Columbia. The only states that we are not fully licensed in are New York, Connecticut, Alaska, Maine, and Vermont, but we do have third-party administration authority in Alaska, Connecticut, and Maine. Our two primary operations are in Scottsdale, Arizona and Tampa, Florida.
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
That's unfortunate for you.gips wrote: ↑Thu Jun 10, 2021 2:31 am i was interested in the sagicor myga but after poking around, learned they are not licensed in ny:
https://www.sagicor.com/-/media/USA-Ass ... 9987347405
We currently are licensed and actively doing business in 45 states, plus the District of Columbia. The only states that we are not fully licensed in are New York, Connecticut, Alaska, Maine, and Vermont, but we do have third-party administration authority in Alaska, Connecticut, and Maine. Our two primary operations are in Scottsdale, Arizona and Tampa, Florida.
Insurance is primarily regulated at the state level. Life insurers who want to sell in state "X" need to be "licensed" to sell in that state, and generally need to comply with state "X's" regulations for business sold in that state.
Regulations are generally similar from state to state, but there are important variations. One of the states that historically has had the most restrictive regulations is New York. For a variety of reasons including regulations, many companies choose not to either not write business, or otherwise restrict their business, in New York. This has led to consumers in New York often having less choice in insurance products, and paying higher prices or yielding lower returns than in other states.
If I look at the Blueprint site for a $100,000 MYGA, I see that residents of Texas have 155 product choices available to them. Other large states have a good range of choices, including Florida at 132 and California at 94. However, residents of New York have only 22 choices available to them, and the most attractive rate is 2.05% on a 7-year MYGA from a company with a rating of B+. The best interest rate in New York from a company in the "A" range is 1.80%.
MYGAs are clearly less attractive to New York residents than to those in all other states.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Stinky said: “ If I look at the Blueprint site for a $100,000 MYGA, I see that residents of Texas have 155 product choices available to them. Other large states have a good range of choices, including Florida at 132 and California at 94. However, residents of New York have only 22 choices available to them, and the most attractive rate is 2.05% on a 7-year MYGA from a company with a rating of B+. The best interest rate in New York from a company in the "A" range is 1.80%.”
Very interesting indeed.
The irony is that NY Life is probably among the most famous life insurers in this country. Here is a serious question:
Is NY Life licensed to do business in New York State?
Very interesting indeed.
The irony is that NY Life is probably among the most famous life insurers in this country. Here is a serious question:
Is NY Life licensed to do business in New York State?
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Yes, New York Life Insurance Company is domiciled (that is, incorporated) in New York State, so it writes business there. There are several other historic life insurance companies, including Metropolitan, Equitable, and MONY, that are domiciled in New York State.
Interestingly, even New York Life has chosen to form subsidiary life insurance companies that are not domiciled in New York State, including New York Life and Annuity (domiciled in Delaware). I expect that the NYL group finds it useful to have some companies that are not directly subject to NY State regulation.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs - Blueprint Income vs. Gainbridge vs. Canvas
Upstream Life, who was recently downgraded and placed on "negative watch" by AM Best, is significantly reducing its rates on newly-issued MYGAs effective 6/14/21. For example, the rate for a 5 year MYGA that allows interest withdrawals is reducing from 2.75% to 2.20%, a decrease of 0.55%. It looks like the other MYGAs offered by the company are seeing rate decreases of a similar magnitude.Stinky wrote: ↑Fri May 28, 2021 3:15 pm Upstream Life, which is a company whose MYGA products are available in a limited number of states, has had its AM Best rating downgraded from B++ to B+, a one notch downgrade. Additionally, its ratings were put on “negative watch”. The press release follows:
https://www.businesswire.com/news/home/ ... plications
The language in the press release sounds to me like Upstream had a fairly major failure in its enterprise risk management function, which led to a significant decrease in its capital adequacy ratios.
Coupled with the rating downgrade, I would expect that rate reduction will significantly decrease the flow of new business to Upstream. In turn, this should allow Upstream management to focus on the issues identified by AM Best. Additionally, writing new annuity business generally causes a "loss" at the time of issue under the very conservative regulatory accounting, and the reduction in new business flow (if it happens) should reduce the "new business strain" on the company.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Well, the 3% rate is only available to $100,000 or greater in initial premium.Stinky wrote: ↑Sat Jun 05, 2021 10:21 am Sagicor has what appears to be a "limited time" special rate on its 3-year and 5-year MYGAs. The 3-year is paying 2.30% and the 5-year is paying 3.00%.
That 3.00% rate on the 5-year product is the highest rate available for a duration of less than 10 years for a company rated A- or higher by AM Best.
Based on communications I've received, it appears that this "special" rate expires on 6/30/21. And I've heard from a couple of annuity agents that those Sagicor products are "hot sellers" right now.
I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
The rate for $50,000 - 99,999 is 2.6%
And the rate for $15,000 - $49,999 is 2.15%.
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
A MYGA newbie question pls.
In 2008-2009, the bonds of number of good companies had top ratings from Standard & Poor’s, Moody’s, and Fitch. None the less, many turned to junk status in the Great Recession.
Similarly, AM Best ratings might lend comfort, but I assume they are not a guarantee. What happens to the promised annuity payment if a provider goes out of business? Thx.
“My opinions are just that - opinions.”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
If your insurance company were to become insolvent, your state life and health guaranty fund would step in.Gaston wrote: ↑Wed Jun 16, 2021 7:41 pmA MYGA newbie question pls.
In 2008-2009, the bonds of number of good companies had top ratings from Standard & Poor’s, Moody’s, and Fitch. None the less, many turned to junk status in the Great Recession.
Similarly, AM Best ratings might lend comfort, but I assume they are not a guarantee. What happens to the promised annuity payment if a provider goes out of business? Thx.
Each insurance company licensed in a particular state is required to be a member of that state’s guaranty fund. In the case of an insolvency, the guaranty fund has the ability to assess member companies to make up a shortfall.
Following is a link to the National Organization of Life and Health Guaranty Associations, whose members are the state guaranty funds: https://www.nolhga.com/policyholderinfo/main.cfm
Coverage limits vary by state. Many states cover up to $250k of annuity surrender benefits, but some states cover less. It is important that you review and understand the coverage limits of your state guaranty fund. Find the website of your state fund and read it carefully.
In the 2008-9 financial crisis, many life insurance companies felt financial stress. But I am aware of only one life insurer of any significant size, Shenandoah Life, that went into receivership. I believe that all policyholders of Shenandoah were made whole eventually, but some claims were delayed.
Post back with questions.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Thank you, this was helpful. In my state it looks like there are insurance guarantee organizations, to which individual insurance companies must belong. If one goes belly up, the guarantee organization steps in to make good on the claims. Sound right?Stinky wrote: ↑Wed Jun 16, 2021 8:03 pm Following is a link to the National Organization of Life and Health Guaranty Associations, whose members are the state guaranty funds: https://www.nolhga.com/policyholderinfo/main.cfm
The guarantee organizations look to be private, non-profit trade groups; as such, they do not reflect a commitment from the state government to step in with funding if help is needed. Also sound correct?
“My opinions are just that - opinions.”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Both of your statements are correct.Gaston wrote: ↑Wed Jun 16, 2021 8:27 pmThank you, this was helpful. In my state it looks like there are insurance guarantee organizations, to which individual insurance companies must belong. If one goes belly up, the guarantee organization steps in to make good on the claims. Sound right?Stinky wrote: ↑Wed Jun 16, 2021 8:03 pm Following is a link to the National Organization of Life and Health Guaranty Associations, whose members are the state guaranty funds: https://www.nolhga.com/policyholderinfo/main.cfm
The guarantee organizations look to be private, non-profit trade groups; as such, they do not reflect a commitment from the state government to step in with funding if help is needed. Also sound correct?
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Just thought I would mention that for investments below $100k, Gainbridge currently also offers a 3% rate (minimum investment $1000). Gainbridge has a credit rating a notch lower (AM BEST B++) compared to Sagicor.HueyLD wrote: ↑Mon Jun 14, 2021 12:46 pmWell, the 3% rate is only available to $100,000 or greater in initial premium.Stinky wrote: ↑Sat Jun 05, 2021 10:21 am Sagicor has what appears to be a "limited time" special rate on its 3-year and 5-year MYGAs. The 3-year is paying 2.30% and the 5-year is paying 3.00%.
That 3.00% rate on the 5-year product is the highest rate available for a duration of less than 10 years for a company rated A- or higher by AM Best.
Based on communications I've received, it appears that this "special" rate expires on 6/30/21. And I've heard from a couple of annuity agents that those Sagicor products are "hot sellers" right now.
I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
The rate for $50,000 - 99,999 is 2.6%
And the rate for $15,000 - $49,999 is 2.15%.
The application process at Gainbridge is completely electronic, and can pull funds directly out from your bank account. Gainbridge only offers MYGAs for non-qualified (taxable) funds only. The withdrawal penalty starts at 3% (plus the market value adjustment) instead of the usual 9% or 10% .
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Blueprint Income’s website is now showing that the Sagicor rates mentioned above are reducing by 0.25% on June 30. They recommend applying before June 27.Stinky wrote: ↑Sat Jun 05, 2021 10:21 am Sagicor has what appears to be a "limited time" special rate on its 3-year and 5-year MYGAs. The 3-year is paying 2.30% and the 5-year is paying 3.00%.
That 3.00% rate on the 5-year product is the highest rate available for a duration of less than 10 years for a company rated A- or higher by AM Best.
Based on communications I've received, it appears that this "special" rate expires on 6/30/21. And I've heard from a couple of annuity agents that those Sagicor products are "hot sellers" right now.
I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
As HueyLD noted upthread, the rates quoted apply to deposits of $100k or more.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Last week I bought a 5 year Sagicor annuity and the process went really smooth. I started it on the weekend and received an email that I would get a call; I got emails instead which was fine. From start to finish (finish is when acknowledge that it is set up) it took a week. $ came from a CD that matured at .05% interest.
How can you tell what the level of state protection - is? $250K per person regardless of # of companies vs $250K per person per insurance company.
The examples are similar to this: 3 contracts, same company totally $300K...... Not 2 or more contracts with different companies with no company exceeding the $250K limit.
How can you tell what the level of state protection - is? $250K per person regardless of # of companies vs $250K per person per insurance company.
The examples are similar to this: 3 contracts, same company totally $300K...... Not 2 or more contracts with different companies with no company exceeding the $250K limit.
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Are you referring to the website of a specific state guaranty fund? If so, which state? Many states appear to have different provisions.BarbK wrote: ↑Wed Jun 23, 2021 5:09 pm How can you tell what the level of state protection - is? $250K per person regardless of # of companies vs $250K per person per insurance company.
The examples are similar to this: 3 contracts, same company totally $300K...... Not 2 or more contracts with different companies with no company exceeding the $250K limit.
If you have questions about the coverage afforded by your state guaranty fund, I’d suggest that you get in touch with the guaranty fund after reading their website.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Florida - I've looked at their website and even some other states to compare if they are worded differently. I know in Florida, agents selling annuities won't even discuss that there is a state guarantee fund so maybe that is why it is so ambiguous on the state guarantee site.Stinky wrote: ↑Wed Jun 23, 2021 5:16 pmAre you referring to the website of a specific state guaranty fund? If so, which state? Many states appear to have different provisions.BarbK wrote: ↑Wed Jun 23, 2021 5:09 pm How can you tell what the level of state protection - is? $250K per person regardless of # of companies vs $250K per person per insurance company.
The examples are similar to this: 3 contracts, same company totally $300K...... Not 2 or more contracts with different companies with no company exceeding the $250K limit.
If you have questions about the coverage afforded by your state guaranty fund, I’d suggest that you get in touch with the guaranty fund after reading their website.
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
The following link contains a summary of the guaranty funds in different states. Click on your state to go directly to your state.BarbK wrote: ↑Wed Jun 23, 2021 5:22 pmFlorida - I've looked at their website and even some other states to compare if they are worded differently. I know in Florida, agents selling annuities won't even discuss that there is a state guarantee fund so maybe that is why it is so ambiguous on the state guarantee site.Stinky wrote: ↑Wed Jun 23, 2021 5:16 pmAre you referring to the website of a specific state guaranty fund? If so, which state? Many states appear to have different provisions.BarbK wrote: ↑Wed Jun 23, 2021 5:09 pm How can you tell what the level of state protection - is? $250K per person regardless of # of companies vs $250K per person per insurance company.
The examples are similar to this: 3 contracts, same company totally $300K...... Not 2 or more contracts with different companies with no company exceeding the $250K limit.
If you have questions about the coverage afforded by your state guaranty fund, I’d suggest that you get in touch with the guaranty fund after reading their website.
https://www.annuityadvantage.com/resour ... ociations/
By the way, from the guaranty fund rules, agents are prohibited from mentioning / marketing the state guaranty fund. Here's what the FAQ says
The law prohibits insurance agents and companies from using the existence of FLAHIGA for the purpose of sales, solicitation or inducement to purchase any form of insurance covered by FLAHIGA. The guaranty association is not and should not be a substitute for your prudent selection of an insurance company that is well managed and financially stable. Agents are prohibited by statute from using this Web site or the existence of the guaranty association as an inducement to purchase insurance.
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I've looked at the Florida guaranty association website, https://www.flahiga.org/FAQ. Here's relevant text from the answer to question #8:BarbK wrote: ↑Wed Jun 23, 2021 5:22 pmFlorida - I've looked at their website and even some other states to compare if they are worded differently. I know in Florida, agents selling annuities won't even discuss that there is a state guarantee fund so maybe that is why it is so ambiguous on the state guarantee site.Stinky wrote: ↑Wed Jun 23, 2021 5:16 pmAre you referring to the website of a specific state guaranty fund? If so, which state? Many states appear to have different provisions.BarbK wrote: ↑Wed Jun 23, 2021 5:09 pm How can you tell what the level of state protection - is? $250K per person regardless of # of companies vs $250K per person per insurance company.
The examples are similar to this: 3 contracts, same company totally $300K...... Not 2 or more contracts with different companies with no company exceeding the $250K limit.
If you have questions about the coverage afforded by your state guaranty fund, I’d suggest that you get in touch with the guaranty fund after reading their website.
The total annuity cash surrender protection per owner per member company is $250,000. That per person limit is a maximum that applies without regard to the number of annuity contracts. As a result, if an individual owned three deferred $100,000 annuities with the same insolvent insurance company, FLAHIGA would pay a maximum total of $250,000 in cash surrender values.
So that indicates to me that your policy(ies) with Sagicor are covered up to $250k of surrender value. If you also purchased MYGAs from other companies, you would have coverage up to $250k for each company.
As I said in a previous answer, each state has different guaranty fund limits. It's important to check out the website of your state guaranty fund.
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I hold 3 MYGA’s.
2 Are A+ Rated.
1 is A++
I will not buy a MYGA with a rating below A+. For me the reason I bought the MYGA was to increase my yield will minimal risk. I would worry about a company less than A+
2 Are A+ Rated.
1 is A++
I will not buy a MYGA with a rating below A+. For me the reason I bought the MYGA was to increase my yield will minimal risk. I would worry about a company less than A+
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
There are a number of folks like you who buy MYGAs from only highly-rated companies.antiqueman wrote: ↑Wed Jun 23, 2021 10:06 pm I hold 3 MYGA’s.
2 Are A+ Rated.
1 is A++
I will not buy a MYGA with a rating below A+. For me the reason I bought the MYGA was to increase my yield will minimal risk. I would worry about a company less than A+
I received a report on life insurance industry sales of MYGAs in the first quarter of 2021. New York Life, rated A++, is the top MYGA seller, with a market share of 19%.
New York Life has the highest rating from AM Best (A++), and is among the most-highly rated companies in any industry per S&P, Moody's, etc. Their current rates per Blueprint Income are 1.55% for a 3-year MYGA, 1.60% for 5 years, and 1.70% for 7 years for a deposit of $100k or more. These rates are much higher than are available on bank CDs, which some insurers view as the primary competition for their MYGA products.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
From what I can see, Fidelity sells MYGAs from only A+ and better rated companies, that seems to be their cutoff point.
The best 3 Yr rate I see right now is 1.75% from Mass Mutual which is rated A++, substantially higher than current CD rates...
The best 3 Yr rate I see right now is 1.75% from Mass Mutual which is rated A++, substantially higher than current CD rates...
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I am now helping my MIL and FIL with their finances and was considering MYGAs. Unfortunately, they are not available at all for him at age 91, and choices are limited for her at age 88, soon to be 89. This site:
https://www.annuityadvantage.com/annuit ... 4&years=10
lists maximum issue age for those who might be in a similar situation. Every company is different, but it appears that for shorter lengths, <5 years, age 90 is the most common maximum issue age, and for longer terms, e.g. 10 years, age 85 is more typical.
Wrench
https://www.annuityadvantage.com/annuit ... 4&years=10
lists maximum issue age for those who might be in a similar situation. Every company is different, but it appears that for shorter lengths, <5 years, age 90 is the most common maximum issue age, and for longer terms, e.g. 10 years, age 85 is more typical.
Wrench
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
SlowPoke,
North American (A+) is 1.85% for three years. Reliance Standard (A++) is 2.25% if you can go 5 years.
North American (A+) is 1.85% for three years. Reliance Standard (A++) is 2.25% if you can go 5 years.
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Sorry for the beginner question related to State Guaranty protection.Stinky wrote: ↑Wed Jun 23, 2021 5:16 pmAre you referring to the website of a specific state guaranty fund? If so, which state? Many states appear to have different provisions.BarbK wrote: ↑Wed Jun 23, 2021 5:09 pm How can you tell what the level of state protection - is? $250K per person regardless of # of companies vs $250K per person per insurance company.
The examples are similar to this: 3 contracts, same company totally $300K...... Not 2 or more contracts with different companies with no company exceeding the $250K limit.
If you have questions about the coverage afforded by your state guaranty fund, I’d suggest that you get in touch with the guaranty fund after reading their website.
If you buy your MYGA while living in one state and then move to another state during the term, which guaranty fund protects you and how do you verify this beforehand?
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
That's actually a very good question.RubyTuesday wrote: ↑Thu Jun 24, 2021 9:35 am Sorry for the beginner question related to State Guaranty protection.
If you buy your MYGA while living in one state and then move to another state during the term, which guaranty fund protects you and how do you verify this beforehand?
Here's what the FAQ section of my home state's (Alabama) guaranty fund web page says. You should look at your state's web page to see what it says. If you have continuing questions, get in touch with your home state guaranty fund.
If I move to another state after purchasing a policy, will I still have guaranty association coverage? If so, who will provide it?
If you purchased a policy from a company that is a member insurer of the state guaranty association where you reside, you will have coverage. Guaranty association protection is generally provided by the association in your state of residence at the date of the liquidation order regardless of where your policy was purchased. Policyholders who reside in states where the insolvent insurer was not licensed are covered, in most cases, by the guaranty association of the state where the failed company was domiciled.
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
So if I’m reading this correctly, you will likely be covered in this order:Stinky wrote: ↑Thu Jun 24, 2021 9:51 amThat's actually a very good question.RubyTuesday wrote: ↑Thu Jun 24, 2021 9:35 am Sorry for the beginner question related to State Guaranty protection.
If you buy your MYGA while living in one state and then move to another state during the term, which guaranty fund protects you and how do you verify this beforehand?
Here's what the FAQ section of my home state's (Alabama) guaranty fund web page says. You should look at your state's web page to see what it says. If you have continuing questions, get in touch with your home state guaranty fund.
If I move to another state after purchasing a policy, will I still have guaranty association coverage? If so, who will provide it?
If you purchased a policy from a company that is a member insurer of the state guaranty association where you reside, you will have coverage. Guaranty association protection is generally provided by the association in your state of residence at the date of the liquidation order regardless of where your policy was purchased. Policyholders who reside in states where the insolvent insurer was not licensed are covered, in most cases, by the guaranty association of the state where the failed company was domiciled.
1) by guaranty association in your current state, if the company is a member insurer/licensed to cover in that state
2) by guaranty association in the failed company’s state of domicile.
So if that’s the case understanding the guaranty association of future state and company’s state of domicile in addition to my current state of domicile would be important.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
Missouri’s association page provides no information (that I can find) on limits, coverages, etc. Just a horrible website:Stinky wrote: ↑Thu Jun 24, 2021 9:51 amThat's actually a very good question.RubyTuesday wrote: ↑Thu Jun 24, 2021 9:35 am Sorry for the beginner question related to State Guaranty protection.
If you buy your MYGA while living in one state and then move to another state during the term, which guaranty fund protects you and how do you verify this beforehand?
Here's what the FAQ section of my home state's (Alabama) guaranty fund web page says. You should look at your state's web page to see what it says. If you have continuing questions, get in touch with your home state guaranty fund.
If I move to another state after purchasing a policy, will I still have guaranty association coverage? If so, who will provide it?
If you purchased a policy from a company that is a member insurer of the state guaranty association where you reside, you will have coverage. Guaranty association protection is generally provided by the association in your state of residence at the date of the liquidation order regardless of where your policy was purchased. Policyholders who reside in states where the insolvent insurer was not licensed are covered, in most cases, by the guaranty association of the state where the failed company was domiciled.
https://www.mo-iga.org/
I went to the MO Dept of Insurance and also cannot find anything easily available.
https://insurance.mo.gov/
So resorting to the relevant MO statutes, I believe it works the same in MO as you described:
From MO 376.715-376.758:
376.715. Citation of law, purpose. — 1. Sections 376.715 to 376.758 shall be known and may be cited as the "Missouri Life and Health Insurance Guaranty Association Act".
2. The purpose of sections 376.715 to 376.758 is to protect, subject to certain limitations, the persons specified in subsection 1 of section 376.717 against failure in the performance of contractual obligations, under life, health, and annuity policies, plans, or contracts specified in subsection 2 of section 376.717, because of the impairment or insolvency of the member insurer that issued the policies or contracts.
3. To provide this protection, an association of member insurers is created to pay benefits and to continue coverages as limited herein, and members of the association are subject to assessment to provide funds to carry out the purpose of sections 376.715 to 376.758.
376.717. Coverages provided, persons covered — coverage not provided, when — maximum benefits allowable. — 1. Sections 376.715 to 376.758 shall provide coverage for the policies and contracts specified in subsection 2 of this section:
(1) To persons who, regardless of where they reside, except for nonresident certificate holders under group policies or contracts, are the beneficiaries, assignees or payees, including health care providers rendering services covered under health insurance policies or certificates, of the persons covered under subdivision (2) of this subsection; and
(2) To persons who are owners of, certificate holders, or enrollees under such policies or contracts, other than structured settlement annuities, who:
(a) Are residents of this state; or
(b) Are not residents, but only under all of the following conditions:
a. The member insurers which issued such policies or contracts are domiciled in this state;
b. The persons are not eligible for coverage by an association in any other state due to the fact that the insurer or health maintenance organization was not licensed in such state at the time specified in such state's guaranty association law; and
c. The states in which the persons reside have associations similar to the association created by sections 376.715 to 376.758;
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I agree that the Missouri guaranty association website is pretty awful. Most state life and health guaranty fund websites have a similar look and feel, as if they worked from a master template, but Missouri went in a different direction.RubyTuesday wrote: ↑Thu Jun 24, 2021 10:46 am Missouri’s association page provides no information (that I can find) on limits, coverages, etc. Just a horrible website:
https://www.mo-iga.org/
I went to the MO Dept of Insurance and also cannot find anything easily available.
https://insurance.mo.gov/
So resorting to the relevant MO statutes, I believe it works the same in MO as you described:
From MO 376.715-376.758:
376.715. Citation of law, purpose. — 1. Sections 376.715 to 376.758 shall be known and may be cited as the "Missouri Life and Health Insurance Guaranty Association Act".
2. The purpose of sections 376.715 to 376.758 is to protect, subject to certain limitations, the persons specified in subsection 1 of section 376.717 against failure in the performance of contractual obligations, under life, health, and annuity policies, plans, or contracts specified in subsection 2 of section 376.717, because of the impairment or insolvency of the member insurer that issued the policies or contracts.
3. To provide this protection, an association of member insurers is created to pay benefits and to continue coverages as limited herein, and members of the association are subject to assessment to provide funds to carry out the purpose of sections 376.715 to 376.758.376.717. Coverages provided, persons covered — coverage not provided, when — maximum benefits allowable. — 1. Sections 376.715 to 376.758 shall provide coverage for the policies and contracts specified in subsection 2 of this section:
(1) To persons who, regardless of where they reside, except for nonresident certificate holders under group policies or contracts, are the beneficiaries, assignees or payees, including health care providers rendering services covered under health insurance policies or certificates, of the persons covered under subdivision (2) of this subsection; and
(2) To persons who are owners of, certificate holders, or enrollees under such policies or contracts, other than structured settlement annuities, who:
(a) Are residents of this state; or
(b) Are not residents, but only under all of the following conditions:
a. The member insurers which issued such policies or contracts are domiciled in this state;
b. The persons are not eligible for coverage by an association in any other state due to the fact that the insurer or health maintenance organization was not licensed in such state at the time specified in such state's guaranty association law; and
c. The states in which the persons reside have associations similar to the association created by sections 376.715 to 376.758;
That being said, I think that you’re looking at things correctly. I believe the there is a “model bill” establishing guaranty funds that has been adopted by most state legislatures. The intent of the “model bill” was to provide general consistency in guaranty fund provisions across the country. It appears that Missouri adopted this part of the “model bill” consistently with many other states.
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I agree.Stinky wrote: ↑Thu Jun 24, 2021 11:00 amI agree that the Missouri guaranty association website is pretty awful. Most state life and health guaranty fund websites have a similar look and feel, as if they worked from a master template, but Missouri went in a different direction.RubyTuesday wrote: ↑Thu Jun 24, 2021 10:46 am Missouri’s association page provides no information (that I can find) on limits, coverages, etc. Just a horrible website:
https://www.mo-iga.org/
I went to the MO Dept of Insurance and also cannot find anything easily available.
https://insurance.mo.gov/
So resorting to the relevant MO statutes, I believe it works the same in MO as you described:
From MO 376.715-376.758:
376.715. Citation of law, purpose. — 1. Sections 376.715 to 376.758 shall be known and may be cited as the "Missouri Life and Health Insurance Guaranty Association Act".
2. The purpose of sections 376.715 to 376.758 is to protect, subject to certain limitations, the persons specified in subsection 1 of section 376.717 against failure in the performance of contractual obligations, under life, health, and annuity policies, plans, or contracts specified in subsection 2 of section 376.717, because of the impairment or insolvency of the member insurer that issued the policies or contracts.
3. To provide this protection, an association of member insurers is created to pay benefits and to continue coverages as limited herein, and members of the association are subject to assessment to provide funds to carry out the purpose of sections 376.715 to 376.758.376.717. Coverages provided, persons covered — coverage not provided, when — maximum benefits allowable. — 1. Sections 376.715 to 376.758 shall provide coverage for the policies and contracts specified in subsection 2 of this section:
(1) To persons who, regardless of where they reside, except for nonresident certificate holders under group policies or contracts, are the beneficiaries, assignees or payees, including health care providers rendering services covered under health insurance policies or certificates, of the persons covered under subdivision (2) of this subsection; and
(2) To persons who are owners of, certificate holders, or enrollees under such policies or contracts, other than structured settlement annuities, who:
(a) Are residents of this state; or
(b) Are not residents, but only under all of the following conditions:
a. The member insurers which issued such policies or contracts are domiciled in this state;
b. The persons are not eligible for coverage by an association in any other state due to the fact that the insurer or health maintenance organization was not licensed in such state at the time specified in such state's guaranty association law; and
c. The states in which the persons reside have associations similar to the association created by sections 376.715 to 376.758;
That being said, I think that you’re looking at things correctly. I believe the there is a “model bill” establishing guaranty funds that has been adopted by most state legislatures. The intent of the “model bill” was to provide general consistency in guaranty fund provisions across the country. It appears that Missouri adopted this part of the “model bill” consistently with many other states.
And checking out the NC guaranty association (considering NC for next home) looks like they use the same language as AL.
If I move to another state after purchasing a policy, will I still have guaranty association coverage? If so, who will provide it?
If you purchased a policy from a company that is a member insurer of the state guaranty association where you reside, you will have coverage. Guaranty association protection is generally provided by the association in your state of residence at the date of the liquidation order regardless of where your policy was purchased. Policyholders who reside in states where the insolvent insurer was not licensed are covered, in most cases, by the guaranty association of the state where the failed company was domiciled.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I spoke to Blueprint rep today and was still able to apply for the 3% 5 year rate. They stated the application must be in Sagicor's hands before the end of June. You then have 60 days to fund it. Supervisor emailed me and stated I will meet the deadline. If anyone is still interested you *may* be able to snag this deal tomorrow as I completed my application in one day.Stinky wrote: ↑Wed Jun 23, 2021 4:18 pmBlueprint Income’s website is now showing that the Sagicor rates mentioned above are reducing by 0.25% on June 30. They recommend applying before June 27.Stinky wrote: ↑Sat Jun 05, 2021 10:21 am Sagicor has what appears to be a "limited time" special rate on its 3-year and 5-year MYGAs. The 3-year is paying 2.30% and the 5-year is paying 3.00%.
That 3.00% rate on the 5-year product is the highest rate available for a duration of less than 10 years for a company rated A- or higher by AM Best.
Based on communications I've received, it appears that this "special" rate expires on 6/30/21. And I've heard from a couple of annuity agents that those Sagicor products are "hot sellers" right now.
I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
As HueyLD noted upthread, the rates quoted apply to deposits of $100k or more.
Francis
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Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
I’ll be making a presentation on MYGAs at the next Birmingham Boglehead meeting on Zoom. Sunday, August 8, 4pm Central time.
All are welcome to join the meeting. To get login information, send an email to birminghambogleheads@gmail.com, or private message me.
I’ll bump this message a time or two before the meeting date.
All are welcome to join the meeting. To get login information, send an email to birminghambogleheads@gmail.com, or private message me.
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Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: Purchasing MYGAs (multi year guaranteed annuities) - mega thread
fsrph wrote: ↑Mon Jun 28, 2021 7:00 pmI spoke to Blueprint rep today and was still able to apply for the 3% 5 year rate. They stated the application must be in Sagicor's hands before the end of June. You then have 60 days to fund it. Supervisor emailed me and stated I will meet the deadline. If anyone is still interested you *may* be able to snag this deal tomorrow as I completed my application in one day.Stinky wrote: ↑Wed Jun 23, 2021 4:18 pmBlueprint Income’s website is now showing that the Sagicor rates mentioned above are reducing by 0.25% on June 30. They recommend applying before June 27.Stinky wrote: ↑Sat Jun 05, 2021 10:21 am Sagicor has what appears to be a "limited time" special rate on its 3-year and 5-year MYGAs. The 3-year is paying 2.30% and the 5-year is paying 3.00%.
That 3.00% rate on the 5-year product is the highest rate available for a duration of less than 10 years for a company rated A- or higher by AM Best.
Based on communications I've received, it appears that this "special" rate expires on 6/30/21. And I've heard from a couple of annuity agents that those Sagicor products are "hot sellers" right now.
I know from personal experience that a "hot" product in a market like MYGAs can draw a significant amount of sales in a short period of time. I wouldn't be surprised if Sagicor filled up its quota of sales and reduced rates before 6/30/21 (of course, that's pure speculation on my part).
As HueyLD noted upthread, the rates quoted apply to deposits of $100k or more.
Francis
As mentioned above, I applied for Sagicor 5 year MYGA thru Blueprint. Blueprint notified me my application was complete and was sent to Sagicor before the end of June (for the 3% rate). Said the policy should be issued shortly. I haven't heard a thing from Blueprint or Sagicor since then. This is my first MYGA, some questions. Is this wait normal? Who will contact me next, Sagicor? I didn't plan to fund the policy till the end of July, so I can wait. Am I supposed to send the money before I see the policy? That doesn't seem right. Thanks.
Francis
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