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Author: mj2boogie Two stars, 250 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 438  
Subject: Index Annuities Date: 10/17/2007 1:16 AM
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I am talking to a financial advisor about an index annuity with Allianz called the Endurance 15 (a new annuity which is similar to their MasterDex10 annuity, but supposedly better). He says it is a great deal. The details as I understand are:
- Surrender period 10 years
- Take the payments as either as a lump sum or as a "enhanced withdrawal benefit" monthly annuity with a bonus over a 10 year period.
- Bonus amount is 20% (if I sign up by October 29, 15% bonus after that).
- Interest rate cap is 2.8% per month or can have an annual cap approx 7%; Participation Rate is 100%.
- Can be tied to S&P 500, Nasdaq 100, FTSE 100, Blended, or Fixed interest only, and can distribute percentges of the annuity across a variety of these investments.
- Can be done with qualified or non-qualified funds (I am considering opening this annuity with qualified funds from a part of my pension lump sum).
- Can add additional money for up to three years to the annuity and get the same 20% bonus
- I can take out up to 10% of the principal each year if I want to (not sure how / if that would be taxed if principal was from a qualified fund).
- Upon death, beneficiaries could collect over a 5 year period, starting immediately.
- There are no fees or expenses; the amount I put in, plus the bonus (assuming I take the "enhanced withdrawal benefit") would not be reduced; I assume they make their money by using the Interest Rate Cap.

Is anyone familiar with this annuity? Though I have read many of the postings about annuities and understand (I think) the pros & cons (provide for tax-deferred investment growth and a "guaranteed" income for life in retirement; somewhat lower return on investment than the market, restricted investment choices, growth is taxed at ordinary income tax rates on withdrawal, lacks liquidity), this one is being pitched as a great deal.

Any information or analysis would be helpful.
Other relevant info: I am 57, spouse 50, both retired; both have significant savings in 401k funds (all in equities); I have the lump sum (high 6 figures); spouse has an annuity she can start collecting anytime, but it is heavily discounted if she takes it early, so she probably won't; we have other significant outside savings in individual equities (many of the MFSA picks, which have done well!!) and mutual funds; other small assets and a reasonable amount of cash on hand; no debt. Just looking for the best plan for investing my lump sum, which I will receive in about a month...
Thank for any help!
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