You won't get any arguement from me about the quality of index annuities but I do want to state that a Monte Carlo simulation is the "be all, end all" with regard to determining if it is a good investment. Monte Carlo randomizes the return when in fact, most historical is not that random. Monte Carlo does not account for sub par trends in the market like we saw in the 70s (flat market for a decade) and in 2000-2002 (two years or significant negative performance). Monte Carlo would like split up the performance found between the years of 2000 and 2002 so it would not seem as bad.Also:15% and 20% of the premiumI don't like how this is worded. Premium could relate to a sales charge, which if it were a loaded fund, the company and agent gets about 80% of the premium. In the case of a variable annuity, agents get about 50% (on average) of the total M&E. Insurance companies (and agents) get about the same from fixed and immediate annuities as well. As far as I know, there is no upfront cost for a EIA so I don't see how 15-20% is that bad. Maybe I am missing something due to the use of the word premium.
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