Annuity Return Estimator

Expected Annual Income from General Account's Assets

Declared Rate for Fixed Annuity

Expected Average Deferral Period (in years)
Ratio of Asset to Equity, ~ 10

Annualized 'all-in' Expenses per $100 of Premium, ~ $0.25

Annualized Acquisition Cost per $100 of Premium, amortized over policy duration, ~ $0.65

FIA Parameters

Expected Annual Payoff from Equity Options ~ 4%

Expected Annual Cost of Equity Options, ~2.25%


Fixed Annuity

Fixed Indexed Annuity

This tool can be used to estimate the returns earned by an Insurance company (Annuity Provider) from a block of Fixed or Fixed Indexed Annuities during the deferral period. We estimate the returns on a $100 'block' of FA or FIA premium, keeping expenses, credit income, option cost and option payoff constant through the annual renewals. Lapses are experienced as shown. The user can manipulate the market conditions (fixed rates, option costs, option payoffs, expenses, etc.) to mimic a particular macroeconomic environment, and obtain a good approximation of their company's returns on a block of annuities. NM= New Money; R1=First Renewal; R2=Second Renewal; PH=Policyholder; FA=Fixed Annuity; FIA=Fixed Indexed Annuity.
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