See my post about Aspida from about a week ago.
viewtopic.php?p=6791259#p6791259
Note that Aspida MYGA products are currently not available in many of the most populous states.
See my post about Aspida from about a week ago.
My understanding is CDs can be kept or broken without penalty, though perhaps it depends on bank
As with a lot of insurance policies, it depends.
I believe that the beneficiary will receive the proceeds at the death of the MYGA annuitant. For many products, the death benefit is the full account value including accrued interest. But for some products, the death benefit is the surrender value, and an extra cost rider must be added to the contract to get the full account value at death.
Yes, I believe that you’re interpreting it correctly.peke9898 wrote: ↑Tue Aug 02, 2022 6:38 am The below is from https://www.malifega.org/FAQ
Annuities
$250,000 in the present value of annuity benefits including net cash surrender and net cash withdrawal values. With respect to each payee of a structured settlement annuity (or beneficiary or beneficiaries of the payee if deceased) $250,000 in the present value of annuity benefits in the aggregate, including net cash surrender and net cash withdrawal values.
MYGA of $250,000 per person per company is the maximum amount that is guaranteed by MA Guaranty Association. Am I looking at the correct amount?
Thank You!Stinky wrote: ↑Tue Aug 02, 2022 7:05 amYes, I believe that you’re interpreting it correctly.peke9898 wrote: ↑Tue Aug 02, 2022 6:38 am The below is from https://www.malifega.org/FAQ
Annuities
$250,000 in the present value of annuity benefits including net cash surrender and net cash withdrawal values. With respect to each payee of a structured settlement annuity (or beneficiary or beneficiaries of the payee if deceased) $250,000 in the present value of annuity benefits in the aggregate, including net cash surrender and net cash withdrawal values.
MYGA of $250,000 per person per company is the maximum amount that is guaranteed by MA Guaranty Association. Am I looking at the correct amount?
$250k of annuity surrender value per person per company.
I like 3 years at 4.6
If it is not clear from the website, ask the agent. At Blueprint, I have emailed them and received prompt replies.webtrojan wrote: ↑Tue Aug 02, 2022 12:19 pm Looking at a Brighthouse 5 year MYGA on Blueprint. In looking at the product information under Riders and Features, how do you know which features are included in the annuity at no additional charge and ones that available for purchase? For instance, the Death Benefit. Is it included in the product or not?
Yes, I will definitely do that. Thanks!indexfundfan wrote: ↑Tue Aug 02, 2022 12:29 pmIf it is not clear from the website, ask the agent. At Blueprint, I have emailed them and received prompt replies.webtrojan wrote: ↑Tue Aug 02, 2022 12:19 pm Looking at a Brighthouse 5 year MYGA on Blueprint. In looking at the product information under Riders and Features, how do you know which features are included in the annuity at no additional charge and ones that available for purchase? For instance, the Death Benefit. Is it included in the product or not?
Look at the “Death Benefit Provisions” section on the Blueprint website. It tells you what is in the “base” contract with the credited rate shown on the site.webtrojan wrote: ↑Tue Aug 02, 2022 12:19 pm Looking at a Brighthouse 5 year MYGA on Blueprint. In looking at the product information under Riders and Features, how do you know which features are included in the annuity at no additional charge and ones that available for purchase? For instance, the Death Benefit. Is it included in the product or not?
Thanks, yes, I never even paid attention to those illustrations.indexfundfan wrote: ↑Tue Aug 02, 2022 8:32 pm It's APY. Just take a look at any of the illustrations on Blueprint. E.g. $100,000 with Americo 7-yr @4.5%. The illustration shows an ending value of $136,086.
With a calculator $100,000 x (1.045)^7 = $136,086.18.
Insurance companies don’t think in terms of APY or APR. They think in terms of simple interest.aXlniM5gE9rBs wrote: ↑Tue Aug 02, 2022 8:50 pm It makes sense insurance companies would want to cite the highest rate. I asked Blueprint if APR or APY was being cited for a specific annuity, and was told how the interest is credited, but was not told if the advertised rate is APY or APR.
Thanks.
Well, the contract I received had a multi-paragraph description, as to how the interest is calculated and credited/compounded daily, that is what prompted my inquiry.Stinky wrote: ↑Tue Aug 02, 2022 9:11 pmInsurance companies don’t think in terms of APY or APR. They think in terms of simple interest.aXlniM5gE9rBs wrote: ↑Tue Aug 02, 2022 8:50 pm It makes sense insurance companies would want to cite the highest rate. I asked Blueprint if APR or APY was being cited for a specific annuity, and was told how the interest is credited, but was not told if the advertised rate is APY or APR.
Thanks.
A $100,000 MYGA at a 3% quoted interest rate will earn $3,000 in the first year.
What could be simpler?
HueyLD wrote: ↑Wed Aug 03, 2022 8:34 am You missed my point of “regulatory.”
As an example, APY came into existence because bankers were using whatever yield numbers they chose without regard to how the interest was calculated. And in those days, NationsBank (who acquired BofA and took the BofA name) was the biggest offender. They advertised a rate of 5% but it was 5% on 88% of the balance which they did not disclose in their ads. After a while and many complaints, the banking regulators stepped in and prescribed a specific APY formula which every bank/CU must disclose whenever the word “rate” was used.
Anyway, it was a history that I was involved in implementing as a banker and it was quite a task to reprogram everything.
O.k., enough of banking history.
Of course the annuity is a contract, and the insurer calculates the daily value, based on the terms of the contract. The insurer has to choose its calculation method, before selling the annuity.Chardo wrote: ↑Wed Aug 03, 2022 5:56 pm The interest on a MYGA is a simple annual amount. If you imvest 100k at 4%, you will have 104k at the end of the contract year. The following year you will get 4% of 104k. Throughout they year, the carrier can choose how to allocate the amount and value the contract each day.
The net result is, the interest rate is calculated, and compounded daily. That prompted my question, is the quoted rate the simple interest rate, or the A.P.Y.What is the Interest Crediting Method?
Interest is credited to the Contract Value daily. It is calculated as:
(1) The Contract Value after any transaction occurring since the prior daily interest calculation; multiplied by
(2) The daily interest rate; calculated as [(1 + applicable annual interest rate) ^ (1 / days of the year) - 1]
Good to see that Aspida is now approved in Texas. I know that the company is licensed in 48 states (all but CT and NY), and I expect that they’ve filed their MYGA policy form in all licensed states. TX must have just approved the policy form.webtrojan wrote: ↑Fri Aug 05, 2022 1:35 pm Aspida MYGAs (rated A-) apparently are now available for Texas residents -- they just recently are listed on Blueprint website. They offer no withdrawal, interest only withdrawal, or 10% withdrawal options, with reduction in interest rates for the ability to withdraw. They seem to have the highest rates out there. However, their Death Benefit Provision is stated as:
Death Benefit Provisions:
Should you pass away before the end of your contract, the cash surrender value of the annuity, will be passed to your beneficiary without any charges or fees. A death benefit rider can be added at an additional cost to allow your beneficiary to receive the full account value, including interest.
With Gainbridge, Canvas, Brighthouse, and most of the others, the full account value including accumulated interest is passed to the beneficiary and not an additional charge.
Am I understanding this correctly? Wouldn't this be a major consideration to not considering Aspida? Any idea how much a rider would be to add this option?
Stinky wrote: ↑Fri Aug 05, 2022 1:42 pmGood to see that Aspida is now approved in Texas. I know that the company is licensed in 48 states (all but CT and NY), and I expect that they’ve filed their MYGA policy form in all licensed states. TX must have just approved the policy form.webtrojan wrote: ↑Fri Aug 05, 2022 1:35 pm Aspida MYGAs (rated A-) apparently are now available for Texas residents -- they just recently are listed on Blueprint website. They offer no withdrawal, interest only withdrawal, or 10% withdrawal options, with reduction in interest rates for the ability to withdraw. They seem to have the highest rates out there. However, their Death Benefit Provision is stated as:
Death Benefit Provisions:
Should you pass away before the end of your contract, the cash surrender value of the annuity, will be passed to your beneficiary without any charges or fees. A death benefit rider can be added at an additional cost to allow your beneficiary to receive the full account value, including interest.
With Gainbridge, Canvas, Brighthouse, and most of the others, the full account value including accumulated interest is passed to the beneficiary and not an additional charge.
Am I understanding this correctly? Wouldn't this be a major consideration to not considering Aspida? Any idea how much a rider would be to add this option?
I have already asked Blueprint about the rider charge to make the death benefit be the full accumulated value. The answer is a 0.10% reduction to the credited rate in all years. So the top rate, which is 4.80% for a seven year MYGA with no free withdrawals, would be 4.70% with the rider.
I’m definitely considering Aspida when I have a MYGA maturing in September.
I agree that Brighthouse makes a lot of sense for you.webtrojan wrote: ↑Fri Aug 05, 2022 2:12 pmStinky wrote: ↑Fri Aug 05, 2022 1:42 pmGood to see that Aspida is now approved in Texas. I know that the company is licensed in 48 states (all but CT and NY), and I expect that they’ve filed their MYGA policy form in all licensed states. TX must have just approved the policy form.webtrojan wrote: ↑Fri Aug 05, 2022 1:35 pm Aspida MYGAs (rated A-) apparently are now available for Texas residents -- they just recently are listed on Blueprint website. They offer no withdrawal, interest only withdrawal, or 10% withdrawal options, with reduction in interest rates for the ability to withdraw. They seem to have the highest rates out there. However, their Death Benefit Provision is stated as:
Death Benefit Provisions:
Should you pass away before the end of your contract, the cash surrender value of the annuity, will be passed to your beneficiary without any charges or fees. A death benefit rider can be added at an additional cost to allow your beneficiary to receive the full account value, including interest.
With Gainbridge, Canvas, Brighthouse, and most of the others, the full account value including accumulated interest is passed to the beneficiary and not an additional charge.
Am I understanding this correctly? Wouldn't this be a major consideration to not considering Aspida? Any idea how much a rider would be to add this option?
I have already asked Blueprint about the rider charge to make the death benefit be the full accumulated value. The answer is a 0.10% reduction to the credited rate in all years. So the top rate, which is 4.80% for a seven year MYGA with no free withdrawals, would be 4.70% with the rider.
I’m definitely considering Aspida when I have a MYGA maturing in September.
Stinky - Thanks for your reply! You have been so very helpful in this thread. I would consider Aspida now with the rider. However, I would take the additional .10% reduction as well to be able to withdraw the interest in case I need to take some into income for a particular year. So that would make their 5 year MYGA approx. 4.45.% (4.35% if you chose the 10% withdrawal option rather than just the interest earned option). The 5 year Brighthouse is 4.3% with the death provision and 10% withdrawal ability, so I'm considering that one too. Aspida has only $2.3B vs Brighthouse $227B assets under management. I would think that a plus for "A" rated Brighthouse? I already have Gainbridge and Canvas annuities.
Thanks again for your contribution to this informative thread!
It is also available for me now. Looking at the 7-yr jumbo (<$100k), the rates areStinky wrote: ↑Fri Aug 05, 2022 1:42 pm Good to see that Aspida is now approved in Texas. I know that the company is licensed in 48 states (all but CT and NY), and I expect that they’ve filed their MYGA policy form in all licensed states. TX must have just approved the policy form.
I have already asked Blueprint about the rider charge to make the death benefit be the full accumulated value. The answer is a 0.10% reduction to the credited rate in all years. So the top rate, which is 4.80% for a seven year MYGA with no free withdrawals, would be 4.70% with the rider.
I’m definitely considering Aspida when I have a MYGA maturing in September.
It is the latter.
Thanks. I got the same info from my CPA.
Thanks for this info. I didn't even consider the death benefit when I applied for the Aspida MYGA. I'm still in the free-look period, so I can still back out to get the death benefit.Stinky wrote: ↑Fri Aug 05, 2022 1:42 pm I have already asked Blueprint about the rider charge to make the death benefit be the full accumulated value. The answer is a 0.10% reduction to the credited rate in all years. So the top rate, which is 4.80% for a seven year MYGA with no free withdrawals, would be 4.70% with the rider.
I’m definitely considering Aspida when I have a MYGA maturing in September.
You’re thinking the right way on the math. Yes, the insurance company expects to make money on the riders, and you’ve just demonstrated that.discman017 wrote: ↑Mon Aug 08, 2022 4:12 pmThanks for this info. I didn't even consider the death benefit when I applied for the Aspida MYGA. I'm still in the free-look period, so I can still back out to get the death benefit.Stinky wrote: ↑Fri Aug 05, 2022 1:42 pm I have already asked Blueprint about the rider charge to make the death benefit be the full accumulated value. The answer is a 0.10% reduction to the credited rate in all years. So the top rate, which is 4.80% for a seven year MYGA with no free withdrawals, would be 4.70% with the rider.
I’m definitely considering Aspida when I have a MYGA maturing in September.
I got the 4.6% rate on the seven-year contract, with 10% annual withdrawal allowance.
Looking at an actuarial table, it seems like the probability that I'll die in the next seven years is somewhere around 3%. (Never really looked at this stuff before. Kinda sobering.)
If I die, the death benefit pays out a higher value. Maybe 7% higher or so, depending on when I die. Does that seem about right as a rough estimate?
If so, the expected value of the death benefit is around 3% x 7% = 0.21%. And the cost is 0.1% every year, or a bit over 0.7% compounded. So it sounds like it's not worth it for me.
Just trying to do some rough calculations to see if I should back out and switch to the contract with the death benefit rider. I'm thinking not, but I'd appreciate any input. Thanks in advance!
Excellent. Yes, that's my situation. Spousal continuation makes the death benefit even less attractive. So I'll stick with what I have.Stinky wrote: ↑Mon Aug 08, 2022 4:29 pm An additional benefit on the Aspida contract that I’ve confirmed with the folks at Blueprint - if your beneficiary is your spouse, he/she can keep the contract to maturity and avoid surrender charges that way. They won’t get the money quickly after your death, but they will get full accumulated account value when the contract expires.
Relative to 1035 exchanges, I will share my experience. I have two old whole life insurance policies. I no longer need life insurance (and probably never did need these policies, but that's another story). I did not want to cash them out because of tax consequences from the income. A 1035 exchange to a MYGA seemed like a perfect solution. Higher return, tax deferral, and the ability to withdraw a portion without penalty annually if I need it (I'm over 59.5). So ~3 months ago, I initiated a MYGA with Americo. To make a long story short, they botched the exchange. Neither life insurance company ever received the request, which I did not learn until ~3 weeks into it. Americo says they will not call the companies to follow up. I have to do that. By that point, rates had gone up anyway, so I just cancelled the deal. So it worked out in my favor, though I was annoyed at the time.
Just received my contract document and thought I'd share the relevant section regarding spousal continuation. This is definitely a nice feature:Stinky wrote: ↑Mon Aug 08, 2022 4:29 pmAn additional benefit on the Aspida contract that I’ve confirmed with the folks at Blueprint - if your beneficiary is your spouse, he/she can keep the contract to maturity and avoid surrender charges that way. They won’t get the money quickly after your death, but they will get full accumulated account value when the contract expires.
Most companies seem to allow spouse beneficiaries to assume the contract.discman017 wrote: ↑Tue Aug 09, 2022 3:57 pm Just received my contract document and thought I'd share the relevant section regarding spousal continuation. This is definitely a nice feature:
Can a surviving spouse continue this Contract?
If the sole Beneficiary is the surviving spouse of the Owner, the surviving spouse may receive the Death Benefit under
one of the Annuitization Options described below, or may continue this Contract as the new Owner, subject to all its
terms and conditions. If the deceased person was an Annuitant and if the surviving spouse continues this Contract, the
surviving spouse will become the new Annuitant, replacing any other surviving Annuitant.
It may be a law that the spouse is able to continue the contract after the annuitants death; I do not know that for sure.aXlniM5gE9rBs wrote: ↑Wed Aug 10, 2022 7:27 pm I asked Aspida and Blueprint several times to explain why non-spouse beneficiaries cannot simply continue the contract, and never got a specific answer. Is it because of a law? Or is it a company rule? If the company could continue the contract, I don't know why they would not simply let it continue.
That's the obvious plan.
I.R.C. § 72(s)(3) Special Rule Where Surviving Spouse Beneficiary — If the designated beneficiary referred to in paragraph (2)(A) is the surviving spouse of the holder of the contract, paragraphs (1) and (2) shall be applied by treating such spouse as the holder of such contract.Stinky wrote: ↑Wed Aug 10, 2022 7:59 pmIt may be a law that the spouse is able to continue the contract after the annuitants death; I do not know that for sure.aXlniM5gE9rBs wrote: ↑Wed Aug 10, 2022 7:27 pm I asked Aspida and Blueprint several times to explain why non-spouse beneficiaries cannot simply continue the contract, and never got a specific answer. Is it because of a law? Or is it a company rule? If the company could continue the contract, I don't know why they would not simply let it continue.
A collected surrender charge is a revenue (and profit) item for the insurance company. As demonstrated upthread, the value of the surrender charge waiver if the beneficiary is not the spouse is very small - well less than the 0.10% cost for the rider to waive it.
That being said, Aspida is currently showing the highest credited rates on the Blueprint site. And a teensy, tiny part of that high credited rate is being supported by the non waiver of surrender charges at a non spouse death.
So it IS the law that a spouse can continue an annuity contract.7eight9 wrote: ↑Wed Aug 10, 2022 9:21 pm
I.R.C. § 72(s)(3) Special Rule Where Surviving Spouse Beneficiary — If the designated beneficiary referred to in paragraph (2)(A) is the surviving spouse of the holder of the contract, paragraphs (1) and (2) shall be applied by treating such spouse as the holder of such contract.
https://irc.bloombergtax.com/public/usc ... section_72
The Aspida MYGA pays 4.8%, or 4.6% with 10% annual withdrawal, or 4.5% with both the annual withdrawal and death benefit rider.aXlniM5gE9rBs wrote: ↑Wed Aug 10, 2022 8:54 pmA possible 70 basis points over a cd is literally not worth it.
I looked at the W&S MYGA on Blueprint. It should allow for 10% penalty-free withdrawal each policy year. Not sure why it was denied, unless the policy you bought was a different one.IowaFarmBoy wrote: ↑Thu Aug 11, 2022 12:51 pm I apologize if this has already been covered but I ran into something interesting recently. (I didn't take time to read all 17 pages of this thread.)
I purchased two MYGAs through Fidelity by doing a transfer from my traditional IRA about two years ago. They paid 1.3 and 2%. When rates increased this year, I requested a partial surrender of the amount that I could withdraw without penalty to be transferred back to my IRA at Fidelity so that I could invest it in Treasuries paying a higher rate. The Mass Mutual transfer went through but the Western & Southern transfer was refused because the apparently only allow a partial exchange if my account is currently in the one year renewal period. I couldn't find a definition for "one year renewal period" that was clearly spelled out online but I assume that means after maturity.
Not a huge deal, especially since this increase in rates is somewhat unusual but wanted to mention it as another piece of information about these products.
I think the issue was that I wanted to transfer it back to my IRA. If I had just wanted a check, I think it would have gone through.indexfundfan wrote: ↑Thu Aug 11, 2022 1:05 pm I looked at the W&S MYGA on Blueprint. It should allow for 10% penalty-free withdrawal each policy year. Not sure why it was denied, unless the policy you bought was a different one.
And yes, according to the brochure below, the "one year renewal period" happens after the policy has reached maturity.
https://public-static-content.blueprint ... ochure.PDF