I don't understand? Spoken like a true salesman. It is an index fund wrapped in an annuity designed to provide insurance against large drops in the market, nothing complicated. BTW, what is your comp on the deal?
I can assure you I understand them, had until recently series 6, 63, 7 and 24 and a few others. The Broker Dealer I cleared through cut all IAs earlier this year because of compliance fears and they are one of the largest indenpendant BDs in the country. My previous BD, affiliated with a very large insurance company, at one point was recognized as one of the largest IA dealers in the country has cut all but a few. Of the 50 or so IAs I have seen, none were worth the cost.
There is a cost associated with wrapping an index fund, or any other security, in an annuity and that means the annuity can never equal the performance gains of the underlying security. The question is wether the down side protection is worth the additional cost of the annuity and I have yet to see an IA where this is the case.
This is the type of statement that causes so many problems for the Broker Dealers that sell IAs and causes all the sleepless nights for the compliance people. I have yet to see an IA that will do this over the long term.
Again, find me anyone that is not comped to sell IAs that actually recommends them. I won't guarranty there isn't one out there, but I have never seen one and I met with 4 fee based advisors just this week.
You can PM me if your interested and I'll gladly send my address and you can forward the prospectus for me to review. If I am wrong, I will post here.