Today, we’re diving deep into the Ibexis Fixed Index Annuity to help you decide if it’s a good fit for your needs. Fixed indexed annuities can be a solid choice for safe growth, but it’s important to understand the specific features, benefits, and limits of this product before making a decision.
Background on Ibexis Life and Annuity Insurance Company
Ibexis Life and Annuity Insurance Company has a long history, tracing all the way back to 1937. Originally known as Sunset Life Insurance Company, they rebranded as Ibexis in 2021 and have earned an “A” rating, reflecting their financial strength.
Here’s a quick overview of what Ibexis offers in terms of annuities:
Product Type | Options Available | Income Products Offered |
Multi-Year Guaranteed Annuity (MYGA) | 1 | No |
Fixed Indexed Annuity (FIA) | 1 | No |
With just two annuity options (MYGA and FIA), Ibexis keeps it simple. They focus on growth products only, without offering income annuities, which makes them different from many other companies in the market.
Understanding Fixed Index Linked Annuities (FILA)
One interesting feature of the Ibexis annuity is that it can technically be considered a “fixed index linked annuity” (or FILA). Unlike some buffered annuities that allow for a loss of principal, a FILA gives you a chance to risk some of your interest gains without ever losing your original principal. This means that you can pursue higher growth while maintaining the safety of your initial investment.
Key Features of the Ibexis Fixed Index Annuity
Let’s look at some key features of the Ibexis Fixed Index Annuity:
- Penalty-Free Withdrawals: Starting in the second year, you can take out up to 10% annually without penalties.
- Bailout Feature: If Ibexis lowers the annuity’s crediting terms beyond a certain rate, you can exit the annuity with your principal and any gains intact.
- Term Lengths: Choose from a 5-, 7-, or 10-year term with a bonus or without.
These features are designed to give flexibility and peace of mind, especially the rare bailout feature, which allows you to leave if crediting terms drop significantly. This is a strong point for the Ibexis annuity.
Explaining the Tracking Value in Ibexis Annuity
Ibexis uses some unique terminology in its annuity illustrations. One key term is “tracking value,” which combines your initial premium, any bonus you choose, and any growth in the account.
Here’s how it works:
Term | Definition |
Tracking Value | The sum of your premium, bonus (if selected), and interest growth, similar to an account value in other annuities. |
Think of tracking value as the amount you can risk for enhanced crediting. This value is important if you’re looking to maximize growth while balancing risk.
Exploring the Floor Rate Options
Another unique term in the Ibexis annuity is the “floor rate.” The floor rate is the percentage of your tracking value that you’re willing to risk for a higher crediting rate. Here’s a breakdown of the options:
- 0% Floor Rate: No risk to your interest gains.
- Up to 15% Floor Rate: You can choose higher risk levels (2.5%, 5%, 10%, 15%) for a chance at enhanced growth.
This flexibility allows you to adjust how much growth you pursue based on market conditions, while still protecting your original investment.
Switching Strategies Based on Market Performance
The Ibexis Fixed Index Annuity gives you control over your growth strategy. If you think the market might go down, you can move your growth strategy to a “declared rate” option, which offers a fixed interest rate. This adjustment is allowed on your contract anniversary, helping you protect gains when the market looks uncertain.
Key Point: Switching to a declared rate helps you lock in a steady growth rate without risking gains.
To Take the Bonus or Not? Making the Right Choice
Ibexis offers both bonus and non-bonus options for its annuities. Here’s how to decide:
- Bonus Option: This upfront boost may be a good choice if you’re planning to start withdrawals soon or need Required Minimum Distributions (RMDs).
- No Bonus Option: Choosing the non-bonus option may offer higher growth potential over time.
Generally, the bonus option helps with immediate withdrawals, while the non-bonus option may be better for long-term growth.
Pros and Cons of the Ibexis Fixed Index Annuity
Here’s a quick look at the pros and cons of the Ibexis FIA:
Pros | Cons |
Offers growth opportunity without risking the principal | Limited to three index options (S&P 500, HSBC, Bank of America) |
Provides a bonus with no extra fees | May require active management to maximize benefits |
One of the only 5-year fixed indexed annuities with a bonus option | Complexity for those new to annuities due to tracking value and floor rate terms |
Unique bailout feature, allowing exit if crediting terms are reduced |
This table outlines the strengths and limitations of the Ibexis FIA, giving you a clear view of whether it’s a fit for your financial goals.
Is the Ibexis Fixed Index Annuity Right for You?
When deciding if the Ibexis FIA is the best choice, remember that there is no “one-size-fits-all” annuity. The right product depends on what you want your money to do and when you want it to do it. Here are a few questions to consider:
- Are you looking for growth without risking your initial investment?
- Do you need flexibility in switching growth strategies based on market performance?
- Are you interested in a short- to medium-term annuity with a potential bonus?
Answering these questions can help you decide if this annuity aligns with your goals. For a more tailored recommendation, feel free to reach out or schedule a quick consultation.
Podcast Episode 49: Ibexis Fixed Index Annuity Review
Download Episode 49: Ibexis Fixed Index Annuity Review on Apple Podcast