Many advisors incorporate Equity Index Annuities (EIAs) and/or Fixed Indexed Annuities (FIAs) into Riskalyze with great success. Advisors have found Riskalyze exceptional in presenting the strengths of different portfolio options in an easy-to-understand and graceful manner.
There are two core methods for incorporating indexed products in Riskalyze.
1️⃣ Using the Annuities and Insurance Search
For products already in the Riskalyze inventory, you'll want to use the Annuity or Insurance Product function.
First, select Annuity or Insurance Product as the account type and enter the insurer's company name and product.
Next, select Reflect Subaccount / Index Risk.
Enter the principal value (cash value) of the product (some advisors will incorporate surrender charges, others choose not to). If you want to include the surrender value you'll enter that in the contract value input. Use this window to also enter M&E, Income Rider, Death Benefit, and Other fee information as well.
Then you'll select how you want to select the underlying index or subaccount.
Then you will enter the allocations to the underlying index(es) or subaccounts.
You are all set!
2️⃣ Using a Custom Investment
Another option available for entering EIAs/FIAs is to use the Riskalyze Custom Investment function. You may want to use this function when:
- You have an annuity that is not yet in the Riskalyze inventory
- You have intimate knowledge of the expected return and volatility (likely provided via product illustration or wholesaler)
There are two primary ways to use a custom investment with EIAs/FIAs: updating an unrecognized investment and creating a new custom investment.
Updating an Unrecognized Investment
If you are importing accounts with EIAs/FIAs and they defaulted to unrecognized (as indicated by a triangle icon), we recommend updating the unrecognized investment. You can hover over the triangle icon to see the following message:
The first time you import or integrate an EIA or FIA you'll need to match the unrecognized investment to its actual symbol in Riskalyze. To do so,
- Select Account Actions drop down, then,
- Select Change Account Type
- Choose Annuity or Insurance Product and
- Enter the Company and Product information, then
- Add the correct EIA/FIA using the Add Investment search
- If you are modeling using Income Stream, you're all set!
- If you want to model using Subaccount Risk, search for the correct EIA/FIA using the Add Investment search
After you set it up, Riskalyze will remember the settings you applied to the FIA/EIA (even if it is coming from an integration).
Creating a New Custom Investment
If you can't find the FIA/EIA using our Annuity + Insurance function, we recommend creating a new custom investment to reflect the contract details for the most precise Risk / Return data. Here's how:
- Click the FIA/EIA investment (with the triangle icon) to bring down it's Risk / Return Scenario
- Use the contract details to fill in the Worst Case and Best Case fields
- For example, if an FIA won't go below 0% annually, or above 5% annually, enter 0% in the Worst Case and 2.5% in the Best Case (remember it's a six-month figure)
- Click SAVE and you're set!