Think BIG.
Ongoing education and planning ideas for the producers and agencies BIG partners with. The library is growing — here are a few guides to start with.
How Fixed Indexed Annuities Work
A plain-language walkthrough of crediting methods, caps, participation rates, and where the guarantees actually come from.
Traditional vs. Linked-Benefit Long-Term Care
How the two structures differ on cost, underwriting, and what happens to the money if long-term care is never needed.
Income Riders: What They Actually Guarantee
What an income rider does and doesn't promise, and the questions worth asking before relying on one.
Carrier Updates
Notable product changes, rate movement, and new launches from carriers BIG works with.
Planning Ideas
Sales concepts and case ideas for annuity, life, and long-term care planning.
Webinars & Training
Carrier product training and sales-concept sessions for appointed producers.
How Fixed Indexed Annuities Work
A fixed indexed annuity (FIA) credits interest based in part on the performance of a market index, such as the S&P 500, without directly investing premium in the market. Principal isn't exposed to index losses — if the index is down, a typical FIA credits zero for that period rather than losing value — but the upside is limited by how the carrier structures the crediting method.
The three levers that shape the return
- Cap rate — the maximum interest that can be credited in a period, regardless of how much the index gained.
- Participation rate — the percentage of the index's gain that's credited (e.g., a 60% participation rate on a 10% index gain credits 6%).
- Spread/margin — a percentage subtracted from the index gain before interest is credited.
Carriers can and do change these rates going forward, usually at each contract anniversary, subject to any guaranteed minimums in the contract. That's why comparing two FIAs on cap rate alone, without looking at crediting method, guaranteed minimums, and surrender schedule, gives an incomplete picture.
What actually backs the guarantee
Guarantees in an FIA — including any income rider guarantees — are backed by the claims-paying ability of the issuing insurance carrier, not by a government program or by BIG. Surrender charges typically apply for a set number of years if the contract owner withdraws more than a penalty-free amount early. Any specific product's terms should be reviewed against its actual contract and disclosure documents, not against general descriptions like this one.
Traditional vs. Linked-Benefit Long-Term Care
Both traditional and linked-benefit (hybrid/asset-based) long-term care policies exist to cover the cost of extended care — home health aides, assisted living, or nursing care — that health insurance and Medicare generally don't cover. They differ in structure.
Traditional LTC
A traditional LTC policy is pure protection: premiums pay for a benefit pool that's only used if long-term care is actually needed. Premiums have historically been subject to rate increases across the industry, and if care is never needed, premiums paid are generally not returned.
Linked-Benefit (Hybrid/Asset-Based) LTC
A linked-benefit policy combines LTC coverage with a life insurance or annuity chassis. If long-term care is needed, the policy pays an LTC benefit, often as an acceleration of the death benefit or account value. If it's never needed, the policy typically still pays a death benefit to beneficiaries, or in some designs, premiums can be returned. That "not use it, don't lose it" design is the main draw, though it usually comes with a larger upfront premium commitment than traditional LTC.
Neither structure is universally "better" — the right fit depends on the client's cash flow, whether they want a return-of-premium feature, and how they weigh ongoing premium risk against a larger upfront commitment. This is a case-by-case design question, which is where BIG's case design support comes in.
Income Riders: What They Actually Guarantee
A guaranteed lifetime withdrawal benefit (GLWB), commonly called an income rider, guarantees a stream of withdrawals for life from an annuity, even if the underlying contract value is drawn down to zero. It's a valuable guarantee, and it's also frequently misunderstood.
What it typically guarantees
- A withdrawal percentage, applied to a benefit base, paid for as long as the contract owner lives — as long as withdrawals stay within the rider's rules.
- In many designs, a "roll-up" that increases the benefit base by a set rate during years with no withdrawals, before income starts.
What it typically does not guarantee
- The benefit base is usually not the same as the contract's actual cash value, and it's often not available as a lump-sum withdrawal or death benefit.
- Roll-up rates and payout percentages are specific to the rider and contract — they are not a rate of return on the client's money.
- Riders typically carry an annual cost, deducted from the contract value, which matters when comparing a contract with a rider against one without.
The right question isn't just "what's the payout percentage" — it's how the benefit base, roll-up, fee, and payout percentage work together for a specific client's time horizon and income need. That's the kind of comparison BIG's case design support is built around.