{"id":5721,"date":"2020-02-20T15:29:00","date_gmt":"2020-02-20T15:29:00","guid":{"rendered":"https:\/\/www.annuityfyi.com\/?page_id=5721"},"modified":"2023-05-22T10:55:44","modified_gmt":"2023-05-22T10:55:44","slug":"athene-amplify","status":"publish","type":"page","link":"https:\/\/www.annuityfyi.com\/fixed-indexed-annuities\/reviews\/athene-amplify\/","title":{"rendered":"Product Review: Athene Amplify"},"content":{"rendered":"
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Athene Amplify offers buyers both \u201cbuffers\u201d and \u201cfloors\u201d, investors can pick one or the other with different levels of protection or combine them. A buffer \u2013 a 10% buffer is most common \u2013 protects investors from the first 10 percentage point decline in the underlying index. Should the S&P 500, for example, decline 20%, their loss is only 10%. If the S&P 500 declines 9% one year, Athene Amplify owners who choose this buffer lose nothing.<\/em><\/strong><\/p>\n\n\n\n

Just in case you didn\u2019t notice, the S&P 500 stock market index soared 29% last year\u2014the biggest one-year gain since 2013. It was a reminder \u2013 especially for conservative-oriented annuity buyers \u2013 that the market generates splendid returns from time to time and often generously rewards participants after a down year.<\/p>\n\n\n\n

In this case, the S&P 500 rebounded from a modest 6.6% loss in 2018. For this reason and a number of others, the stock market over time has always been the best financial investment for those with staying power to weather the storm when the market periodically declines.<\/p>\n\n\n\n

A relatively new type of annuity \u2013 a structured variable or \u2018buffered\u2019 annuity \u2013 makes it easier for prospective annuity buyers to break into the stock market because, unlike a variable annuity, it offers some downside protection. Hence the adjective, \u201cbuffered.\u201d And a recent structured variable annuity entrant \u2013 Athene Amplify \u2013 is arguably the best of all.
It\u2019s true that popular fixed indexed annuities (FIAs) protect their owners from any market losses whatsoever. But the downside with an FIA is that its owners pay a price for this protection. There are index \u201cparticipation rates\u201d \u2014 i.e., a substantial haircut on the percentage of an annual increase in an index they actually receive. In addition, there are usually caps \u2013 limits on the annual increase in a market index in terms of annuity owner remuneration.<\/p>\n\n\n\n

Athene Amplify offers buyers both \u201cbuffers\u201d and \u201cfloors\u201d, and they can pick one or the other with different levels of protection or combine them. A buffer \u2013 a 10% buffer is most common \u2013 protects investors from the first 10 percentage point decline in the underlying index. Should the S&P 500, for example, decline 20%, their loss is only 10%. If the S&P 500 declines 9% one year, Athene Amplify owners who choose this buffer lose nothing.<\/p>\n\n\n\n

With a floor, unlike a buffer, owners who pick it would absorb the first 10 percentage point loss in an index in a given year. Athene would absorb all losses, if any, after that. Essentially, a floor is catastrophic loss insurance.<\/p>\n\n\n\n

Athene Amplify owners can invest in the S&P 500, the smaller stock Russell 2000 index or the international MSCI EAFE index \u2013 or all three together. If they choose one index, they can invest in it for one year or two years and, in the case of the S&P 500, one, two or six years. If they want to invest in all three indexes, they would have to stay with the investment for six years.<\/p>\n\n\n\n

Athene Amplify offers generous participation rates on these indexes, some of which exceed 100%. It also offers unusually high \u201ccap rates\u201d \u2013 rates extremely common in FIAs \u2013 that limit how much of a gain in an index the annuity owner actually receives. Athene Amplify provides a cap rate of 16.25% on a one-year investment in the S&P 500 and an 18.25% rate on a one-year investment in the Russell 2000. There is no cap at all on an investment in the MSCI EAFE index or any other of these investments if they are made for at least two years.<\/p>\n\n\n\n

Athene Amplify customers most typically opt for an investment with a buffer \u2013 one uncoupled with a floor \u2013 in the S&P 500 index for one, two or six years.<\/p>\n\n\n\n

(It should be noted that structured variable annuities such as Athene Amplify are deemed to be securities, while FIAs are not.) Consequently, they can be sold by a broader array of brokers, often with lesser credentials. Nonetheless, the two products compete with each other.)
Structured variable annuities entered the market about four years ago. Now there are about a half dozen of these annuities on the market, and they represent the fastest-growing segment in the annuity industry. According to the Insured Retirement Institute, they generated aggregate revenue of $12.5 billion in the first nine months of 2019, an increase of 62% over the same period a year ago.<\/p>\n\n\n\n

FIA sales remain much larger, and not only because there are far more FIAs on the market. Annuity buyers are mostly a conservative lot, and the FIA guarantee of no loss of principal in a down market remains highly appealing. \u201cMany people just don\u2019t want to risk losing any money, period,\u201d says one annuity expert familiar with both FIAs and structured variable annuities.<\/p>\n\n\n\n

Still, these folks may be too cautious for their own good. It may make little difference to them but investing in the stock market is not as risky as it may seem \u2013 and, of course, it\u2019s even less so with a structured variable annuity. According to research by Athene, in the 91-year period stretching from 1928 through 2019, the S&P 500 posted a positive yearly return 61 times and a negative yearly return 29 times \u2013 less than half as often. (One time, the index broke even.)<\/p>\n\n\n\n

Perhaps most telling, most annual downturns in the S&P 500 have not been steep. Only six times did the market drop more than 20%. Thirteen times, the market dropped more than 10% but less than 20%. And 10 times, the annual decline was less than 10%. (The smallest Athene Amplify buffer available \u2013 10% \u2013 would have eliminated all these investor losses if this annuity existed at the time, assuming investors had invested in the S&P 500 index.)<\/p>\n\n\n\n

Athene Amplify offers no income rider. Owners pay a fee of less than 1% a year \u2013 less than half of what they would pay for a variable annuity without an income rider. (FIAs without income riders, which are widespread, have zero fees.)<\/p>\n\n\n\n

Athene Amplify is available in most states, but not yet in most of the biggest states, including California, Texas and New York. The minimum investment is $10,000.<\/p>\n\n\n\n

Prospective buyers of this annuity must keep in mind that there is a risk of loss and no FDIC guarantee to recover losses. This annuity is a security that invests in stock market indexes that can rise or fall. Unlike a fixed indexed annuity, there is no guarantee against potential losses. People who want more information should contact their financial advisor.<\/strong><\/p>\n\n\n\n

For more information about the product mentioned in this article contact us here:<\/strong><\/a><\/p>\n\n<\/div><\/div>\n\n

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Athene Amplify offers buyers both \u201cbuffers\u201d and \u201cfloors\u201d, investors can pick one or the other with different levels of protection or combine them. A buffer \u2013 a 10% buffer is most common \u2013 protects investors from the first 10 percentage point decline in the underlying … <\/p>\n

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