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Index Annuity Returns

Actual 5 Year Index Annuity Returns Series
2012-2017 2011-2016 2010-2015 2009-2014
2008-2013 2007-2012 2006-2011 2005-2010 2004-2009 2003-2008
2002-2007 2001-2006 2000-2005 1999-2004 1998-2003 1997-2002

Newest to Oldest

Fixed Annuities Beat Fixed Income Reality (8/16)

FIA Managed Volatility Indices (8/14)

A Bayesian Look At Hyporthetical Returns (7/14)

Uncapped Does Not Mean Unlimited (5/14)

Barclays US Dynamic Balance Index vs Traditional (10/13)

Volatile 2011 FIA Returns (1/12)

Hurdle Crediting Method (1/11)

Index Annuities: A 249% Participation Rate (7/11)

What Performs Best In Volatile Times? (4/11)

FIA Relative Returns Have Seldom Been Higher (8/10)

Aviva BAA Hypothetical Performance (5/10)

Rainbow Method (5/10)

 


Newest to Oldest - continued

Never Use The Fixed Rate Bucket unless.... (04/10)

Which Crediting Method Works Best In A Bear Market? (9/09)

Balanced (equity-kicker) Crediting Strategies (5/09)

Rainbow Method (5/09)

Best Index Returns By Crediting Method (4/08)

Fixed Annuities Are Competitive With Taxable Bond Mutual Funds (2/08)

A Quasi-Hypothetical Look At Returns & Index Participation (2/07)

Range of 1st Year Index Annuity Returns by Crediting Method

 
Period Ending 
the last day of
Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method
  
Fixed Account
2015          
December 0% 0% 0% - 0.11% 0% 1.00% - 3.05%
November 0% - 0.62% 0% 0% - 1.69% 1.25% - 3.75% 1.00% - 3.05%
October 1.35% - 3.04% 0% 0% - 1.69% 1.25% - 3.25% 0.70% - 3.05%
September 0% 0% 0% - 3.99% 0% 1.00% - 2.75%
August 0% 0% 0% - 2.54% 0% 1.00% - 2.75%
July 0.90% - 6.25% 0% - 5.73% 1.00% - 6.37% 1.00% - 3.75% 1.00% - 2.75%
June 2.50% - 5.25% 0% - 2.75% 0% - 4.04% 2.25% - 4.75% 1.00% - 2.75%
May 2.50% - 6.50% 0% - 6.76% 2.08% - 5.58% 2.25% - 4.75% 1.00% - 3.05%
April 2.14% - 6.50% 0% - 7.81% 2.44% - 6.99% 1.95% - -5.75% 1.00% - 2.75%
March 2.30% - 6.50% 0% - 7.58% 2.14% - 6.87% 1.95% - 5.75% 1.05% - 2.75%
February 2.50% - 6.25% 0% - 10.01% 1.69% - 6.74% 1.50% - 4.75% 1.05% - 2.75%
January 2.00% - 6.25% 0% - 8.26% 2.00% - 6.04% 2.35% - 4.75% 1.00% - 2.30%

Period Ending 
the last day of
Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method
  
Fixed Account
2014          
December 3.00% - 6.45% 0% - 9.56% 1.82% - 5.20% 2.25% - 4.40% 1.00% - 2.8%
November 1.00% - 10.55% 0% - 12.63% 1.00% - 6.70% 1.75% - 4.75% 1.00% - 3.90%
October 1.00% - 7.25% 1.70% - 13.85% 1.00%   - 7.00% 2.35% - 4.00% 1.00%  - 3.90%
September 2.59% - 6.45% 1.70% - 17.29% 3.25%   - 7.00% 2.25% - 4.75% 1.00%  - 3.10%
August 2.10% - 6.12% 4.25% - 17.69% 3.00%  - 10.04% 2.10% - 6.12% 1.10%  - 3.10%
July 1.75% - 5.50% 0.12% - 10.48% 2.95%   - 5.07% 1.85% - 4.40% 1.10%  - 2.50%
June 1.75% -  5.95% 2.63% - 13.49% 1.88%  -  7.88% 1.70% - 4.95% 1.10%  - 2.60%.
May 2.00% -  5.50% 0% - 11.73% 2.00%  -  5.50% 1.70% - 4.00% 1.00% - 2.60%
April 2.00% -  5.50% 0.48%  - 11.31% 2.00%  -  6.78% 1.50% - 3.00% 1.00% - 2.75%
March  2.00% -  6.45% 0.51%  - 13.53% 1.93%  -  5.50% 1.50% - 2.65% 1.00% - 3.05%
February  1.00% -  6.50% 0.81%  - 16.83% 2.00%  - 11.55% 2.00% - 4.50% 1.00% - 3.50%
January  2.50% -  6.45% 4.92%  - 13.94% 1.70%  -  5.50% 2.25% - 2.80% 1.00% - 2.50%

2014

  annual point-to-point   trigger method   monthly or daily average   monthly cap

This chart shows the range of actual first year index annuity returns for 12 month periods ending at the end of each month of the year. The results include almost every index annuity on the market in 2011.How to read this: Looking at January, the worst annual pt-to-pt annuity (blue) returned 0%, the best 2.6% for the year, and all of the other annual pt-to-pt product returns were in between. Monthly cap (green) returns and averaging (yellow) had zero returns regardless of product and Trigger (red) are stated rates returned if the index does not decline and returned 3.5% to 4.3% depending on the annuity.  

Period Ending 
the last day of
Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method  
Fixed Account
2013          
December 2.50% - 7.40% 5.87% - 20.70% 1.59% - 7.35% 2.35% - 5.00% 1.00% - 3.00%
November 2.00% - 5.50% 5.60% - 18.92% 2.00% - 6.39% 2.50% - 4.50% 1.00% - 3.00%
October 2.00% - 5.50% 6.16% - 16.47% 2.45%   - 6.25% 2.50% - 4.50% 1.00%  - 3.05%
September 1.10% - 5.10% 1.38% - 11.50% 2.00%   - 5.00% 2.50% - 3.50% 1.00%  - 3.00%
August 2.00% - 5.50% 1.38% - 10.95% 2.00%   - 6.25% 2.50% - 3.50% 1.00%  - 3.05%
July 2.00% - 6.25% 5.51% - 15.60% 2.00%   - 6.25% 2.50% - 3.00% 0.80%  - 3.05%
June 0.80% -  7.45% 5.51% - 14.66% 0.49%  -  9.10% 2.50% - 3.50% 1.00% - 3.10%.
May 2.00% -  6.20% 8.01% - 20.16% 2.31%  -  5.20% 2.50% - 3.50% 1.00% - 3.10%
April 2.00% -  5.35% 2.50% -  9.57% 0%  -  3.33% 2.50% - 3.50% 1.00% - 3.00%
March  1.00% -  5.50% 0%  -  8.06% 0%  -  1.37% 2.50% - 3.50% 1.00% - 3.10%
February  2.00% -  7.50% 0%  -  3.57% 0%  -  3.57% 2.50% - 3.00% 1.00% - 3.75%
January  2.25% -  6.10% 0%  -  6.23% 0%  -  6.82% 2.50% - 3.00% 1.00% - 3.00%

2012


Range Of 2012 1st Year Real World Index Annuity Returns

  

  annual point-to-point   trigger method   monthly or daily average   monthly cap

This chart shows the range of actual first year index annuity returns for 12 month periods ending at the end of each month of the year. The results include almost every index annuity on the market in 2011.How to read this: Looking at January, the worst annual pt-to-pt annuity (blue) returned 0%, the best 2.6% for the year, and all of the other annual pt-to-pt product returns were in between. Monthly cap (green) returns and averaging (yellow) had zero returns regardless of product and Trigger (red) are stated rates returned if the index does not decline and returned 3.5% to 4.3% depending on the annuity.  

Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method  
Fixed Account
December  2.00% -  6.50% 0%  - 10.54% 2.00%  -  7.50% 2.50% - 4.00% 1.00% - 2.55%
November  2.00% -  6.00% 0%  -   7.31% 1.51%  -  7.50% 2.50% - 3.20% 1.00% - 2.50%
October  0.89% -  5.92% 0%   2.20%  -  7.77% 3.00% - 4.30% 1.10% - 4.00%
September  2.00% -  7.25% 0%  - 15.53% 2.05%  -  7.65% 3.15% - 3.85% 1.00% - 3.60%
August  2.20% -  8.05% 0%  -   5.93% 0%  -  6.00% 3.15% - 3.85% 1.00% - 3.85%
July  1.69% -  6.25% 0% 0%  -  0.88% 3.50% - 4.60% 1.25% - 2.90%
June 0% -  3.14% 0% 0% 3.50% - 4.60% 1.00% - 2.90%
May 0% 0% 0% 0% 1.00% - 3.75%
April 0% -  4.15% 0% 0% 3.90% - 4.15% 1.00% - 3.75%
March 1.25% -  6.23% 0% 0% 4.00% - 5.00% 1.30% - 3.10%
February 0% -  2.90% 0% 0% 4.00% - 5.00% 1.00% - 3.30%
January 0% -  2.04% 0% 0% 3.90% - 4.60% 1.10% - 3.90%
2011
  annual point-to-point   trigger method   monthly or daily average   monthly cap
Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method  
Fixed Account
December  0% 0% 0%  -  1.80% 0% 1.10% - 3.80%
November  1.00%  -  5.63% 0% 1.82%  -  5.75% 3.00% - 4.00% 1.10% - 4.00%
October  0.89%  -  5.92% 0% 2.20%  -  7.77% 3.00% - 4.30% 1.10% - 4.00%
September 0% 0% 2.23% - 10.38% 0% 1.10% - 3.80%
August  2.42%  -  8.45% 0%  -  8.06% 3.00% - 10.53% 3.60% - 5.00% 1.50% - 4.45%
July  3.00%  -  8.45% 0%  -  9.00% 3.00% - 10.27% 4.05% - 5.60% 1.45% - 4.45%
June  1.00%  -  9.65% 0% - 15.14% 4.25% - 14.99% 4.30% - 6.00% 1.75% - 4.45%
May  3.00%  -  9.65% 0.43%  - 12.18% 2.62% - 9.00% 4.60% - 5.75% 1.60% - 4.45%
April  4.00% - 11.60% 0%  - 3.65% 0% - 0.68% 4.60% - 5.75% 1.50% - 4.65%
March  3.00% - 11.45% 0%  - 1.67% 0% - 1.22% 4.60% - 5.75% 2.00% - 5.20%
February  4.00% - 11.45% 0%  - 4.88% 0% - 5.94% 4.60% - 5.75% 1.75% - 5.20%
January  3.00% - 12.40% 0%  - 9.80% 1.94% - 7.31% 4.60% - 5.75% 2.00% - 4.25%
2010
Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method  
Fixed Account
December  3.20% - 11.70% 0%  - 3.74% 0% -  2.23% 5.10% - 5.75% 2.00% - 4.70%
November  1.55%  -  7.75% 0% 0% -  3.00% 5.10% - 6.00% 2.00% - 3.80%
October  2.84% -  9.50% 0%  - 0.81% 2.55% -  8.02% 4.60% - 5.75% 2.00% - 3.50%
September  1.11% -  7.96% 0% 0% -  5.05% 4.10% - 6.00% 2.00% - 3.80%
August  0.70% -  2.81% 0% 0% -  8.17% 4.10% - 6.25% 2.10% - 3.75%
July  2.89% - 10.50% 0%  - 4.18% 1.39% - 10.39% 4.10% - 7.75% 2.75% - 3.95%
  annual point-to-point   trigger method   monthly or daily average   monthly cap
June  4.00% - 10.00% 0%  -  4.18% 4.00% - 18.02% 4.10% - 7.80% 1.85% - 4.25%
May  4.00% - 11.00% 0%  - 10.71% 4.00% - 16.55% 4.10% - 7.70% 1.00% - 4.00%
April  4.00% - 16.18% 3.35%  - 20.23% 4.00% - 17.11% 4.10% - 7.80% 2.25% - 4.40%
March  4.30% - 18.03% 3.35%  - 28.38% 4.05% - 24.13% 4.40% - 7.80% 2.20% - 4.75%
February  4.05% - 22.60% 3.35%  - 28.38% 4.00% - 36.03% 4.80% - 7.80% 2.15% - 5.25%
January  4.75% - 13.51% 0.18%  - 14.56% 5.05% - 17.35% 5.05% - 7.80% 2.15% - 5.25%
2009
Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method  
December  4.75% - 12.00% 0%  - 1.96% 0% - 5.01% 5.05% - 8.60%
November  4.75% - 11.50% 0%  - 2.72% 0% - 3.86% 5.05% - 9.05%
October  2.44% -   6.96% 0% 0% 5.05% - 7.35%
September  0% 0% 0% 0%
August  0% 0% 0% 0%
July  0% 0% 0% 0%
June  0% 0% 0% 0%
May  0% 0% 0% 0%
April  0% 0% 0% 0%
March  0% 0% 0% 0%
February  0% 0% 0% 0%
January  0% 0% 0% 0%
2008
December  0% 0% 0% 0%
November  0% 0% 0% 0%
October  0% 0% 0% 0%
September  0% 0% 0% 0%
August  0% 0% 0% 0%
July  0% 0% 0% 0%
June  0% 0% 0% 0%
May  0% 0% 0% 0%
April  0% 0% 0% 0%
March  0% 0% 0.40% -  2.70% 0%
February  0% 0% 0% -  4.26% 0%
January  0% 0% 0% -  2.43% 0%
2007
Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method  
December  0.38% -  3.53% 0%  -  1.74% 2.72% -  4.22% 4.90% - 6.70%
November  0% -  5.75% 0.87%  -  3.87% 3.81% -  5.23% 5.75% - 6.70%
October  4.75% - 10.00% 6.92%  -  9.92% 1.00% -  6.48% 5.10% - 6.70%
September  4.75% - 12.30% 7.43%  - 11.83% 6.00% -  8.76% 4.65% - 6.70%
August  4.75% - 11.35% 7.43%  - 11.19% 7.80% - 10.22% 4.65% - 7.55%
July  4.75% - 10.00% 8.15%  - 12.28% 5.45% - 11.45% 4.65% - 6.70%
June  4.75% - 13.10% 11.87%  - 15.44% 4.18% - 10.84% 4.65% - 6.70%
May  4.75% - 15.31% 15.73%  - 17.78% 2.42% -  9.32% 4.65% - 6.90%
April  3.28% -   8.25% 8.55%  - 11.24% 1.25% -  4.29% 4.65% - 6.70%
March 3.63% -   8.50% 7.77%  -   9.51% 1.52% -  4.45% 4.65% - 6.50%
February  4.93% -   7.75% 7.88%  -   9.46% 1.68% -  5.99% 4.65% - 5.20%
January  5.50% - 10.50% 10.54%  - 11.85% 0.92% -  5.02% 4.75% - 5.30%
2006
Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method  
December  5.50% - 10.20% 11.10%  - 12.99% 2.56% -  7.01% 4.75% - 5.30%
November  6.05% - 10.20% 1.69%  -  5.49% 1.31% -  4.45% 4.85% - 5.30%
October  4.75% -  8.20% 8.19% - 12.19% 4.14% -  7.50% 4.45% - 5.30%
September  4.36% -  7.75% 4.42%  -  7.22% 1.46% -  4.78% 4.85% - 5.65%
August  3.42% -  6.84% 3.11%  -  5.66% 1.29% -  4.75% 4.80% - 5.65%
July  1.89% -  3.44% 0.49%  -  1.79% 0% -  2.60% 4.50% - 5.50%

June  2.98% -   6.62% 2.99%  -   6.04% 2,51% -  6.99% 4.80% - 5.65%
May  3.30% -   6.60% 3.57%  -   6.11% 3.02% -  6.00% 4.40% - 6.00%
April  4.75% - 11.96% 9.06%  - 12.20% 5.42% -  7.23% 4.80% - 6.00%
March  4.78% -   9.68% 5.83%  -   8.57% 2.45% -  5.44% 4.40% - 5.80%
February  4.80% -   5.80% 4.16%  -   5.65% 0% -  1.95% 4.80% - 5.80%
January 4.18% -   8.36% 2.50%  -   2.55% 0.94% -  3.56% 4.80% - 5.85%
2005
Annual 
Point-to-Point
Monthly Cap Gain Monthly or 
Daily
Trigger (Binary) 
Method  
December 0% -   3.75% 0.60%  -   3.21% 0% 4.20% - 5.80%
November  3.23% - 6.45% 3.20%  -   5.94% 3.51% - 10.07% 4.40% - 5.90%
October  2.76% -   6.80% 2.40%  -   5.94% 0.70% -   3.29% 4.20% - 5.80%
September  4.75% - 10.25% 7.57%  - 10.07% 3.51% - 10.07% 4.40% - 5.90%
August  5.69% - 10.00% 5.81%  -   9.21% 3.65% -  7.15% 5.40% - 6.60%
July  4.75% - 10.00% 7.97%  - 11.21% 4.52% - 8.15% 5.00% - 6.50%
June  0.88% -   5.54% 2.04%  -   4.28% 0% - 2.37% 5.00% - 6.50%
May  2.11% -   7.00% 3.85%  -   6.45% 0% - 4.20% 5.40% - 6.50%

5 Year Index Annuity Returns Methodology - Flaws In My Method
Although the carriers credited a wide range of interest you cannot use this return data to rank methods or use these returns as representative of all index annuity returns over the same periods.

  • Carrier issue dates cluster around 30 September (except for the 1997-2002 study), but since different companies have slightly different issue dates the interest periods counted by one carrier may be significantly different than another.

  • The higher returns tend to reflect an initial premium bonus. I include premium bonuses as long as the bonus was freely available as a cash value.

  • Finally, the carrier was permitted to pick the product, method and index to submit and to send in results using multiple indices or even a combination of fixed and index interest. Because of all this I do not pretend to show a comprehensive or balanced examination of the interest credited by the index annuity industry.\\



5 Year Index Annuity Returns 12-17  (11/17) 
I asked the remaining 33 carriers that offered fixed index annuities in September 2012 for copies of customer statements with customer information whited-out for index annuity contracts issued closest to 30 September 2012 for a five year period ending 30 September 2017. Eleven of these carriers provided data on thirty-two annuities.     


 

  S&P 500 Annual Gain Annualized S&P 500 Return For 5 Year Period: 11.83%
End of End Value APP Month Avg Daily Avg
9/2012 1400.67      
9/2013 1681.55 16.72% 8.00% 8.00%
9/2014 1972.29 17.29% 12.00% 11.22%  
9/2015 1920.03 (2.65%) 3.79% 3.95% S&P 500 does not sponsor, promote or endorse any annuity
9/2016 2168.27 12.93% 8.11% 7.37%
9/2017 2519.36 16.19% 8.57% 8.11%

This is the sixteenth year I have collected 5-year return data and I deeply appreciate the cooperation and support of the carriers that were open in sharing what some of their annuityowners earned in their index annuities. The carriers providing information were: American Equity, Americo, Fidelity & Guaranty Life, Great American Life, LSW, Midland National Life, North American Life, Oxford Life, Symetra, The Standard and Voya.  

Actual Annualized 11-17 Returns (source)  
Average Index Annuity 3.26% 

The average index annuity credited 3.26% annualized for the five year period, which is more than triple the 0.99% you would have earned in 5-year CDs and a percent more than what you would have earned in the average bond fund. An index fund with reinvested dividends gained 13.6% a year over the last 5 years. This five-year period had the lowest FIA index interest-linked participation ever.      

Highest Index Annuity 6.29%
Lowest Index Annuity 1.60%
Average Index Annuity w/Bonus  3.86%
Average Index Annuity no Bonus  2.90%
Average 1-Yr CD (bankrate) 0.27%
Average 5-Yr CD (bankrate) 0.99%
S&P 500 Index Fd (Vanguard) 13.62%
Average Taxable Bond Fund*  2.24%
*http://online.wsj.com/mdc/public/page/2_3061-mfq17_3_results.html


 


5 Year Index Annuity Returns 11-16  (11/16) 
I asked the remaining 31 carriers that offered fixed index annuities in September 2011 for copies of customer statements with customer information whited-out for index annuity contracts issued closest to 30 September 2011 for a five year period ending 30 September 2016. Ten of these carriers provided data on twenty one annuities.     


 

  S&P 500 Annual Gain Annualized S&P 500 Return For 5 Year Period: -13.89%
End of End Value APP Month Avg Daily Avg
9/2011 1131.42      
9/2012 1440.67 27.33 18.89% 17.66%
9/2013 1681.55 16.72% 8.00% 8.00%  
9/2014 1972.29 17.29% 12.00% 11.22% S&P 500 does not sponsor, promote or endorse any annuity
9/2015 1920.03 (2.65%) 3.79% 3.95%
9/2016 2168.27 12.93% 8.11% 7.37%

This is the fifteenth year I have collected 5-year return data and I deeply appreciate the cooperation and support of the carriers that were open in sharing what some of their annuityowners earned in their index annuities. The carriers providing information were: Allianz, American Equity, EquiTrust, Fidelity & Guaranty Life, Great American Life, LSW, Midland National Life, North American Life, The Standard and Voya.  

Actual Annualized 11-16 Returns (source)  
Average Index Annuity 3.55% 

The average index annuity credited 3.35% annualized for the five year period, which is more than double the 1.3% you would have earned in 5-year CDs and equal to what you would have earned in the average bond fund. An index fund with reinvested dividends gained 16.3% a year over the last 5 years. This five-year period had the lowest FIA index interest-linked participation ever.      

Highest Index Annuity 6.25%
Lowest Index Annuity 1.02%
Average Index Annuity w/Bonus  4.34%
Average Index Annuity no Bonus  3.18%
Average 1-Yr CD (bankrate) 0.29%
Average 5-Yr CD (bankrate) 1.26%
S&P 500 Index Fd (Vanguard) 16.33%
Average Taxable Bond Fund*  3.38%
*http://online.wsj.com/mdc/public/page/2_3061-mfq16_3_results.html



 

5 Year Index Annuity Returns 10-15  (11/15) 
There were 22 remaining carriers active in the index annuity market that offered FIAs in September 2010. I asked the carriers for copies of customer statements with customer information whited-out for index annuity contracts issued closest to 30 September 2009 for a five year period ending 30 September 2014. Fifteen of these carriers provided data on over fifty annuities.  


 
  S&P 500 Annual Gain Annualized S&P 500 Return For 5 Year Period: -10.97%
End of End Value APP Month Avg Daily Avg
9/2010 1141.20      
9/2011 1131.42 ( 0.86%) 11.23% 10.22%
9/2012 1440.67 27.33 18.89% 17.66%  
9/2013 1681.55 16.72% 8.00% 8.00% S&P 500 does not sponsor, promote or endorse any annuity
9/2014 1972.29 17.29% 12.00% 11.22%
9/2015 1920.03 (2.65%) 3.79% 3.95%

This is the fourteenth year I have collected 5-year return data and I deeply appreciate the cooperation and support of the carriers that were open in sharing what some of their annuityowners earned in their index annuities. The carriers providing information were:   Allianz, American Equity,Americo,  Athene, EquiTrust, Fidelity & Guaranty Life, Forethought, Great American Life, Lincoln Financial Group, LSW, Midland National Life, National Western Life, North American Company, The Standard and Voya.  

Actual Annualized 10-15 Returns (source)  
Average Index Annuity 4.39% 

The average index annuity credited 4.4% annualized for the five year period, which is almost double the 2.3% you would have earned in 5-year CDs and 1.3% more than you have earned in the average bond fund. An index fund with reinvested dividends gained 13.3% a year over the last 5 years and the average stock mutual fund gained 10.7% a year.    

Highest Index Annuity 8.01%
Lowest Index Annuity 2.53%
Average Index Annuity w/Bonus  4.79%
Average Index Annuity no Bonus  4.23%
Average 1-Yr CD (bankrate) 0.35%
Average 5-Yr CD (bankrate) 2.26%
S&P 500 Index Fd (Vanguard) 13.30%
Average U.S. Stock Fund* 10.70%
Average Taxable Bond Fund*  3.10%
*Wall Street Journal 7 October 2015  



 

5 Year Index Annuity Returns 09-14  (11/14)
There were 58 carriers active in the index annuity market in September 2009. Three carriers marketed term end point designs that have not yet reached the end of their index period. Twenty four carriers no longer offer FIAs and five carriers are owned by other carriers and are treated as one carrier. I asked the remaining carriers for copies of customer statements with customer information whited-out for index annuity contracts issued closest to 30 September 2009 for a five year period ending 30 September 2014. Fifteen of these carriers provided data on over forty annuities.  

S&P 500 Annual Gain Annualized S&P 500 Return For 5 Year Period: -7.62%  
End of End Value APP Month Avg Daily Avg
9/2009 1057.08
9/2010 1141.20 7.96% 4.01% 5.05%
9/2011 1131.42 ( 0.86%) 11.23% 10.22%
9/2012 1440.67 27.33 18.89% 17.66% S&P 500 does not sponsor, promote or endorse any annuity
9/2013 1681.55 16.72% 8.00% 8.00%
9/2014 1972.29 17.29% 12.00% 11.22%

This is the thirteenth year I have collected 5-year return data and I deeply appreciate the cooperation and support of the carriers that were open in sharing what some of their annuityowners earned in their index annuities. The carriers providing information were:   Allianz, American Equity, Athene (Aviva), Bankers Life & Casualty, CMFG Life (CUNA Mutual), EquiTrust, Fidelity & Guaranty Life, Forethought, Great American Life, LSW, Midland National Life, National Western Life, North American Company, The Standard and Voya (ING)  

Actual Annualized 08-14 Returns (source)  
Average Index Annuity 5.34% 

The average index annuity credited 5.3% annualized for the five year period, which is more than double the 2.3% you would have earned in 5-year CDs and 0.4% more than you have earned in the average bond fund. An index fund with reinvested dividends gained 15.7% a year over the last 5 years and the average stock mutual fund gained 13.4% a year.  

Highest Index Annuity 9.71%
Lowest Index Annuity 2.70%
Average Index Annuity w/Bonus  5.43%
Average Index Annuity no Bonus  5.32%
Average 1-Yr CD (bankrate) 0.49%
Average 5-Yr CD (bankrate) 2.26%
S&P 500 Index Fd (Vanguard) 15.67%
Average U.S. Stock Fund* 13.40%
Average Taxable Bond Fund*  4.91%
*Wall Street Journal 6 October 2014  

Crediting Method

Annualized    5-Yr Return

Premium Bonus

Issue Date

Yr 1

Yr 2

Yr 3

Yr 4

Yr 5

Annual Pt-to-Pt w/cap

2.70%

 

10/1/09

 

 

 

 

3.00%

Monthly Avg w/spread

3.17%

 

9/25/09

 

 

 

 

4.71%

Bond Annual Pt-to-Pt

3.19%

 

9/30/09

4.00%

4.00%

4.00%

0.00%

4.00%

Annual Pt-to-Pt w/cap

3.80%

 

9/30/09

1.44%

3.86%

6.70%

2.81%

4.26%

Annual Pt-to-Pt w/cap

3.83%

 

9/30/09

2.03%

1.50%

2.42%

6.31%

7.04%

APP w/cap & Monthly Cap

3.96%

5.00%

9/29/09

2.29%

0.04%

4.64%

3.23%

4.64%

Monthly Avg w/cap

4.00%

 

10/1/09

4.01%

4.00%

4.00%

4.00%

4.00%

Annual Pt-to-Pt

4.10%

 

9/30/09

1.18%

4.00%

5.63%

4.04%

5.71%

Annual Pt-to-Pt w/cap

4.26%

5.00%

10/2/09

2.06%

0.00%

6.88%

4.06%

3.37%

Daily Avg w/cap

4.51%

8.00%

9/30/09

0.00%

2.25%

4.37%

4.00%

4.00%

Annual Pt-to-Pt w/cap

4.54%

 

9/30/09

 

 

 

 

9.56%

Daily Avg w/cap

4.54%

 

9/27/09

2.05%

5.36%

5.39%

3.24%

6.71%

Annual Pt-to-Pt w/cap

4.66%

 

9/27/09

 

 

 

 

4.32%

APP w/cap & Monthly Cap

4.83%

 

9/30/09

6.63%

3.30%

5.20%

4.89%

4.16%

Annual Pt-to-Pt w/cap

4.85%

 

9/30/09

3.84%

1.78%

5.57%

5.70%

7.45%

Annual Pt-to-Pt w/cap

5.15%

 

9/25/09

6.00%

1.82%

6.00%

6.00%

6.00%

Annual Pt-to-Pt w/cap

5.22%

3.00%

9/28/09

5.75%

0.29%

5.75%

5.75%

5.75%

Annual Pt-to-Pt w/cap

5.23%

 

9/27/09

6.55%

2.37%

6.30%

5.50%

5.50%

Annual Pt-to-Pt w/cap

5.26%

 

9/21/09

5.95%

4.11%

5.20%

5.55%

5.50%

Annual Pt-to-Pt w/cap

5.27%

 

9/30/09

7.00%

0.00%

7.00%

6.25%

6.25%

Annual Pt-to-Pt w/cap

5.35%

 

9/30/09

6.75%

1.37%

6.25%

6.25%

6.25%

Annual Pt-to-Pt w/cap

5.35%

 

9/25/09

6.25%

1.82%

6.25%

6.25%

6.25%

Annual Pt-to-Pt w/cap

5.47%

 

10/13/09

6.00%

4.11%

5.35%

6.00%

5.90%

Annual Pt-to-Pt w/cap

5.51%

 

9/30/09

7.00%

1.16%

7.00%

6.25%

6.25%

Annual Pt-to-Pt w/cap

5.53%

 

9/30/09

1.97%

5.29%

7.23%

5.25%

8.00%

Annual Pt-to-Pt w/cap

5.70%

 

9/28/09

 

 

 

 

4.75%

Daily Avg w/cap

5.72%

3.00%

9/28/09

2.21%

4.98%

6.21%

4.38%

7.84%

Annual Pt-to-Pt

5.73%

10.00%

9/30/09

3.82%

3.82%

3.82%

3.61%

3.61%

Daily Avg w/cap

5.73%

 

9/27/09

2.46%

6.43%

6.74%

4.63%

8.50%

Annual Pt-to-Pt

6.22%

 

9/30/09

4.13%

7.00%

7.00%

6.50%

6.50%

Monthly Cap

6.25%

 

9/30/09

0.00%

0.00%

10.61%

7.94%

13.39%

Annual Pt-to-Pt w/cap

6.37%

 

9/27/09

7.06%

2.37%

7.50%

7.50%

7.50%

Monthly Cap

6.44%

 

9/27/09

 

 

 

 

12.66%

Annual Pt-to-Pt w/cap

6.83%

5.00%

9/28/09

7.30%

0.29%

7.30%

7.30%

7.30%

Term Pt-to-Pt & Fixed

7.13%

 

9/30/09

4.28%

0.00%

14.02%

9.63%

8.45%

Monthly Cap

7.15%

 

9/30/09

3.47%

7.51%

11.29%

5.66%

7.98%

Daily Avg w/cap

7.21%

5.00%

9/28/09

2.54%

5.73%

7.37%

5.77%

9.67%

Daily Avg w/cap

7.61%

 

9/30/09

4.66%

8.50%

8.50%

7.93%

8.50%

Monthly Avg w/cap

8.17%

 

9/30/09

4.34%

9.50%

9.50%

8.09%

9.50%

Monthly Cap

9.77%

 

9/27/09

 

 

 

 

12.56%

 Comments:
This bull market is in its 69th month, outlasting all but two other bull markets in the last half century. The previous five years were generally a period of falling interest rates, and yet the average taxable bond still underperformed the average reported FIA return. The next period should, historically,  include a bear market (giving back some of those previous gains), and interest rates should be increasing (causing existing bonds to lose value). In this environment FIAs preserve interest credited, reset to take advantage of the  market decline, and benefit from rising rates to offer greater index participation.  


5 Year Index Annuity Returns 08-13  (11/13)
There were 58 carriers active in the index annuity market in September 2008. Three carriers marketed term end point designs that have not yet reached the end of their index period. Fifteen carriers no longer offer FIAs and five carriers are owned by other carriers and are treated as one carrier. I asked the remaining carriers for copies of customer statements with customer information whited-out for index annuity contracts issued closest to 30 September 2008 for a five year period ending 30 September 2013. Fifteen of these carriers provided data on 40 annuities.

S&P 500 Annual Gain Annualized S&P 500 Return For 5 Year Period: -7.62%  
End of End Value APP Month Avg Daily Avg
9/2008 1164.74
9/2009 1057.08 ( 9.24%) (21.99%) (22.45%)
9/2010 1141.20 7.96% 4.01% 5.05%
9/2011 1131.42 ( 0.86%) 11.23% 10.22% S&P 500 does not sponsor, promote or endorse any annuity
9/2012 1440.67 27.33 18.89% 17.66%
9/2013 1681.55 16.72% 8.00% 8.00%

This is the twelfth year I have collected 5-year return data and I deeply appreciate the cooperation and support of the carriers that were open in sharing what some of their annuityowners earned in their index annuities. The carriers providing information were: Allianz, American Equity, American National, Aviva (Athene), CMFG Life (CUNA Mutual), EquiTrust, Forethought, Great American Life, ING, LSW, Lincoln Financial Group, Midland National Life, National Western Life, North American Company, and The Standard.

Actual Annualized 08-13 Returns (source)  
Average Index Annuity 4.90% 

The average index annuity credited 4.9% annualized for the five year period, which compares very favorably with the 3.5% you would have earned in 5-year CDs. Both the stock and bond markets had significantly higher returns. An    index fund with reinvested dividends gained 10% a year over the last 5 years and the average stock mutual fund gained 9.6% a year. Putting all of your money into taxable bonds returned 6.1% annualized; a 50/50 mix of stock and bond funds gave you a 7.9% overall return.

Highest Index Annuity 7.63%
Lowest Index Annuity 2.40%
Average Index Annuity w/Bonus  5.00%
Average Index Annuity no Bonus  4.86%
Average 1-Yr CD (bankrate) 0.93%
Average 5-Yr CD (bankrate) 3.48%
S&P 500 Index Fd (Vanguard) 10.00%
Average U.S. Stock Fund* 9.60%
Average Taxable Bond Fund*  6.10%
*Wall Street Journal 7 October 2013  

Crediting Method
Annualized    5-Yr Return Premium Bonus Issue Date Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Monthly Cap 2.40% 10% 9/29/2008 0.00% 0.00% 0.00% 2.36% 0.00%
Monthly Cap 2.44% 9/30/2008 0.00% 0.00% 0.00% 7.09% 5.33%
3 Yr Pt-to-Pt w/cap 2.56% 10/10/2008 0.00% 0.00% 0.00% 0.00% 13.50%
Annual Pt-to-Pt w/cap 3.02% 9/30/2008 2.59%
Bond Annual Pt-to-Pt 3.19% 9/3/2008 4.00% 4.00% 4.00% 4.00% 0.00%
Monthly Avg w/spread 3.50% 10/5/2008 0.00% 0.94% 4.15% 12.87% 0.11%
APP w/cap & Monthly Cap 3.57% 5% 9/25/2008 1.45% 2.95% 0.00% 4.91% 3.56%
Multi-Index Monthly Cap 3.62% 9/30/2008 0.00% 1.26% 7.09% 8.50% 1.54%
Annual Pt-to-Pt 3.75% 9/3/2008 0.00% 3.18% 0.00% 10.93% 5.02%
Annual Pt-to-Pt w/cap 3.75% 9/3/2008 0.00% 6.50% 0.00% 6.50% 6.00%
Annual Pt-to-Pt w/cap 4.08% 9/30/2008 0.00% 6.75% 1.37% 6.25% 6.25%
Annual Pt-to-Pt w/cap 4.17% 5% 9/24/2008 0.00% 7.00% 0.00% 5.00% 4.00%
Daily Avg w/cap 4.19% 9/21/2008 0.00% 2.66% 6.43% 7.41% 4.63%
Multi-Index Monthly Cap 4.26% 10% 9/30/2008 0.00% 2.62% 2.82% 3.94% 2.12%
Annual Pt-to-Pt w/cap 4.36% 9/30/2008 0.00% 7.93% 1.37% 7.00% 5.75%
Daily Avg w/cap 4.48% 9/21/2008 0.00% 3.07% 7.50% 7.41% 4.63%
Montlhy Avg 4.76% 9/3/2008 0.00% 2.48% 6.62% 11.48% 3.61%
Annual Pt-to-Pt w/cap 4.87% 9/25/2008 0.00% 6.26% 4.75% 6.77% 6.75%
Daily Avg w/cap 4.88% 3% 9/28/2008 0.00% 2.76% 5.23% 8.15% 5.37%
Annual Pt-to-Pt w/cap 5.03% 9/21/2008 0.00% 7.06% 2.37% 8.10% 7.90%
Annual Pt-to-Pt w/cap 5.05% 9/21/2008 0.00% 7.06% 2.37% 8.30% 7.80%
Monthly Avg w/cap 5.09% 9/3/2008 0.00% 4.13% 7.50% 7.50% 6.50%
Annual Pt-to-Pt w/cap 5.11% 9/25/2008 0.00% 8.00% 1.82% 8.02% 8.00%
Annual Pt-to-Pt w/cap 5.22% 9/26/2008 0.00% 9.99% 1.24% 8.25% 7.00%
Annual Pt-to-Pt w/cap 5.33% 1.5% 9/5/2013 0.00% 7.50% 5.50% 6.50% 5.75%
Annual Pt-to-Pt w/cap 5.40% 9/25/2008 0.00% 8.50% 1.82% 8.52% 8.50%
Annual Pt-to-Pt w/cap 5.69% 9/25/2008 0.00% 9.00% 1.82% 9.03% 9.00%
Annual Pt-to-Pt w/cap 5.70% 10/10/2008 6.50% 6.50% 2.54% 6.52% 6.50%
Daily Avg w/cap 5.71% 5% 9/28/2008 0.00% 3.20% 6.48% 8.15% 5.77%
Annual Pt-to-Pt w/cap 5.75% 5% 9/28/2008 0.00% 7.97% 0.29% 8.10% 7.60%
APP & Monthly Avg w/cap 5.78% 1.5% 9/2/2013 0.00% 7.75% 6.75% 6.88% 6.13%
Annual Pt-to-Pt w/cap & Fixed 5.85% 12.5% 8/28/2008 1.50% 5.24% 1.64% 4.34% 4.28%
Monthly Avg w/cap 5.87% 9/30/2008 0.00% 4.66% 8.50% 8.50% 7.93%
Annual Pt-to-Pt w/cap 6.05% 10% 9/20/2008 0.00% 5.36% 6.00% 5.00% 4.00%
Annual Pt-to-Pt w/cap 6.10% 10/10/2008 7.00% 7.00% 2.54% 7.02% 7.00%
Multi-Index APP w/cap 6.30% 11% 10/6/2008 1.67% 5.96% 1.13% 5.87% 6.02%
Trigger & Fixed 7.13% 9/15/2008 4.55% 8.00% 7.70% 7.70% 7.75%
Annual Pt-to-Pt w/cap 7.18% 10/15/2008 9.50% 7.26% 4.11% 7.55% 7.55%
Annual Pt-to-Pt w/cap 7.19% 10/15/2008 10.00% 7.26% 4.11% 8.05% 6.62%
Annual Pt-to-Pt w/cap 7.63% 10/15/2008 10.25% 7.26% 4.12% 8.29% 8.30%

Comments:
The last five years contained the greatest financial crisis since the Great Depression. If you had stayed the course and not fled the markets you were rewarded, but if you did flee to a safer haven index annuities provided the opportunity for returns that far exceeded the bank.


5 Year Index Annuity Returns  07-12  (11/12)
There were 58 carriers active in the index annuity market in September 2007. Three carriers marketed term end point designs that have not yet reached the end of their index period. Thirteen carriers no longer offer FIAs and five carriers are owned by other carriers and are treated as one carrier. I asked the remaining carriers for copies of customer statements with customer information whited-out for index annuity contracts issued closest to 30 September 2007 for a five year period ending 30 September 2012. Sixteen of these carriers provided data on 52 annuities.

S&P 500 Annual Gain Annualized S&P 500 Return For 5 Year Period: -1.15%  
End of End Value APP Month Avg Daily Avg
9/2007 1526.75
9/2008 1164.74 (23.71%) (10.97%) (10.42%)
9/2009 1057.08 ( 9.24%) (21.99%) (22.45%)
9/2010 1141.20 7.96% 4.01% 5.05% S&P 500 does not sponsor, promote or endorse any annuity
9/2011 1131.42 ( 0.86%) 11.23% 10.22%
9/2012 1440.67 27.33 18.89% 17.66%

This is the eleventh year I have collected 5-year return data and I deeply appreciate the cooperation and support of the carriers that were open in sharing what some of their annuityowners earned in their index annuities. The carriers providing information were: Allianz, Allstate (Lincoln Benefit Life), American Equity, Aviva, EquiTrust, Fidelity & Guaranty Life, Forethought, Great American Life, ING, Lafayette Life Insurance Company, LSW, Midland National Life, National Western Life, North American Company, The Standard and Union Central

Specific Product Returns Are Not Identified  
My purpose in collecting this information is to show real world examples of interest index annuity owners have earned. It would not be fair to the carriers providing this data to give competitive intelligence to carriers that did not provide information. 

Actual Annualized 07-12 Returns (source)  
Average Index Annuity 3.27%  The average index annuity credited 3.3% annualized for the five year period, which compares favorably with the 1.6% you would have earned in 1-year CDs, but is 0.8% less than the 5 year CD rate you might have chosen. Whether the stock market was better depended on whether you chose stocks or bonds. An index fund with reinvested dividends gained 1.1% a year over the last 5 years and the average stock fund only gained 0.2% a year. However, putting all of your money into taxable bonds returned 5.6% annualized; a 50/50 mix of stock and bond funds gave you a 2.9% overall return.  
Highest Index Annuity 5.53%
Lowest Index Annuity 1.19%
Average Index Annuity w/Bonus  3.28%
Average Index Annuity no Bonus  3.17%
Average 1-Yr CD (bankrate) 1.61%
Average 5-Yr CD (bankrate) 3.98%
S&P 500 Index Fd (Vanguard) 1.07%
Average U.S. Stock Fund* 0.20%
Average Taxable Bond Fund*  5.60%
*Wall Street Journal 3 October 2012  

Crediting Method

Annual       5-Yr Return

Premium Bonus

Issue Date

Yr 1

Yr 2

Yr 3

Yr 4

Yr 5

Monthly Cap

1.19%

5.00%

9/25/2007

0.00%

0.00%

0.00%

0.00%

1.06%

Annual Pt-to-Pt w/cap

1.41%

 

9/26/2007

0.00%

0.00%

7.25%

1.24%

3.00%

APP & Monthly Cap

1.64%

 

9/26/2007

0.00%

0.00%

5.06%

0.95%

2.26%

Monthly Cap

1.70%

5.00%

9/21/2007

0.00%

0.00%

0.00%

0.00%

3.59%

APP & Monthly Avg

1.76%

 

10/1/2007

 

 

 

 

5.96%

Changed & Remixed

1.79%

 

8/13/2007

0.00%

0.00%

2.64%

3.00%

3.00%

Annual Pt-to-Pt w/cap

2.07%

 

9/25/2007

0.00%

0.00%

5.75%

0.00%

4.75%

Changed & Remixed

2.11%

 

8/3/2007

0.00%

0.00%

3.05%

3.00%

4.56%

Changed & Remixed

2.11%

1.50%

8/20/2007

0.00%

0.00%

3.05%

3.00%

3.00%

Annual Pt-to-Pt w/cap

2.29%

 

9/26/2007

0.00%

0.00%

4.96%

3.57%

3.00%

Monthly Cap & Mon Avg

2.34%

 

10/1/2007

 

 

 

 

2.90%

Annual Pt-to-Pt w/cap

2.36%

 

9/26/2007

0.00%

0.00%

6.50%

0.00%

5.50%

APP & Monthly Avg

2.56%

7.00%

9/25/2007

0.00%

0.00%

2.75%

0.00%

3.21%

Fixed

2.58%

 

10/10/2007

3.00%

1.94%

2.94%

2.51%

2.51%

Annual Pt-to-Pt w/cap

2.64%

 

10/8/2007

 

 

 

 

 

APP & Monthly Avg

2.69%

 

9/26/2007

0.00%

0.00%

6.45%

3.85%

3.26%

APP Index Blend

2.72%

 

10/1/2007

 

 

 

 

11.24%

Annual Pt-to-Pt w/cap

2.83%

 

9/30/2007

0.00%

0.00%

6.75%

1.37%

6.25%

APP Index Blend

2.94%

 

10/1/2007

 

 

 

 

7.25%

APP Index Blend

2.96%

 

10/1/2007

 

 

 

 

5.60%

Daily Avg w/cap

2.98%

 

9/21/2007

0.00%

0.00%

2.46%

5.89%

6.74%

Avg Index Blend

3.01%

7.00%

9/26/2007

0.00%

0.00%

2.20%

3.85%

2.11%

Monthly Cap

3.02%

3.00%

10/1/2007

 

 

 

 

6.37%

Annual Pt-to-Pt w/cap

3.12%

5.00%

9/24/2007