Starting MYGA Investment

[RetireeRobert]

You may want to peruse the threads on non-FDIC savings instruments and the preferred stock thread. I have both the DERI and Toyota IncomeDriver Notes (both are now 1.5%) and a portfolio of 36 different perferreds that collectively yield a little over 5.5%.

Duke Energy has a note program too but they only pay 1%.

https://www.early-retirement.org/forums/f28/non-fdic-deposit-account-programs-105827.html

https://www.early-retirement.org/fo...e-bad-and-the-in-between-2021-a-107188-2.html

Thanks for the references. Will check them out.

 

[catotx]

In case anyone is interested, Canvas Annuity, an affiliate (or subsidiary) of Puritan Life of America, is offering MYGAs with the following rates

3-yr 2.75%
5-yr 3.25%
7-yr 3.5%

https://canvasannuity.com/#/home

Puritan Life is rated B++ by AM Best. I guess they can offer these rates because they don't sell through a third party broker.

 

[RetireeRobert]

In case anyone is interested, Canvas Annuity, an affiliate (or subsidiary) of Puritan Life of America, is offering MYGAs with the following rates

3-yr 2.75%
5-yr 3.25%
7-yr 3.5%

https://canvasannuity.com/#/home

Puritan Life is rated B++ by AM Best. I guess they can offer these rates because they don't sell through a third party broker.

Thanks, will check them out.

 

[pb4uski]

In case anyone is interested, Canvas Annuity, an affiliate (or subsidiary) of Puritan Life of America, is offering MYGAs with the following rates

3-yr 2.75%
5-yr 3.25%
7-yr 3.5%

https://canvasannuity.com/#/home

Puritan Life is rated B++ by AM Best. I guess they can offer these rates because they don't sell through a third party broker.

Those are pretty attractive crediting rates, but B++ is pretty low.

Our key conclusion is that an IFS rating of ‘A–’ from A.M. Best is most comparable with a ‘BBB’ IFS rating from Fitch, as well as Moody’s and
Standard & Poor’s (S&P).

So if AMB A- is comparable to BBB from Fitch/Moody's/S&P then AMB B++ then AMB B++ would probably be BBB- or BB+ by Fitch/Moody's/S&P.

 

[Dtail]

Those are pretty attractive crediting rates, but B++ is pretty low.



So if AMB A- is comparable to BBB from Fitch/Moody's/S&P then AMB B++ then AMB B++ would probably be BBB- or BB+ by Fitch/Moody's/S&P.

And thus perhaps in the junk investment category.

 

[pb4uski]

Yeah, but for some reason I don't perceive near as much credit risk with a SPDA issued by a S&P BB+ insurer as a bond issued by a S&P BB+ company.

 

[Dtail]

Yeah, but for some reason I don't perceive near as much credit risk with a SPDA issued by a S&P BB+ insurer as a bond issued by a S&P BB+ company.

Agree in concept.

 

[jazz4cash]

And thus perhaps in the junk investment category.

I think these ratings for insurance companies are often confused with bond ratings. I’ve only heard the term junk in reference to bonds rated below BBB- AM Best seems to specialize in insurance company (financial strength) ratings and B++ is shown as “good” on their scale. A company could issue bonds with various ratings depending on the details of each security.

 

[jazz4cash]

Yeah, but for some reason I don't perceive near as much credit risk with a SPDA issued by a S&P BB+ insurer as a bond issued by a S&P BB+ company.

Yeah I agree but it’s apples to oranges. The insurance co ratings are for the entire company and there is also the State Guaranty Association protection. The bond rating is just for the particular issue and may not reflect the financial strength of the company overall.

 

[24601NoMore]

I just spent a couple hours "trying" to research the Canvas MYGA as it looked pretty darn compelling.

I wasn't able to find much of ANYTHING on either Canvas or the Insurance company (Puritan Life) that underwrites the MYGA.

Even checking LinkedIn..Puritan Life had a grand total of *13* employees - including the President/CEO listed. Worse, Canvas had TWO employees on LinkedIn.

Something smells very fishy to me about that one, glitzy websites aside. I get that they have a (apparently fairly low) AM Best rating..but even that..there's no history of the company, "about us" on EITHER website, etc. Very strange and candidly enough to make me pass on what's a pretty compelling product and rate..

 

[jazz4cash]

I just spent a couple hours "trying" to research the Canvas MYGA as it looked pretty darn compelling.

I wasn't able to find much of ANYTHING on either Canvas or the Insurance company (Puritan Life) that underwrites the MYGA.

Even checking LinkedIn..Puritan Life had a grand total of *13* employees - including the President/CEO listed. Worse, Canvas had TWO employees on LinkedIn.

Something smells very fishy to me about that one, glitzy websites aside. I get that they have a (apparently fairly low) AM Best rating..but even that..there's no history of the company, "about us" on EITHER website, etc. Very strange and candidly enough to make me pass on what's a pretty compelling product and rate..

I'd say you're overthinking this, but if you're not comfortable let it pass. Their rates are not that much better than some other higher rated companies (that I've never heard of). I remember when I considered LinkedIn to be a form of credential but those days are long long gone. Puritan's rating of B++ is listed as "good" everywhere I look but some people would consider "good" to be fairly low, I guess. Since these are insurance companies, I might check with some state insurance agencies to see if they have complaints if I was concerned.

 

[24601NoMore]

I'd say you're overthinking this, but if you're not comfortable let it pass. Their rates are not that much better than some other higher rated companies (that I've never heard of). I remember when I considered LinkedIn to be a form of credential but those days are long long gone. Puritan's rating of B++ is listed as "good" everywhere I look but some people would consider "good" to be fairly low, I guess. Since these are insurance companies, I might check with some state insurance agencies to see if they have complaints if I was concerned.

Just doing basic due diligence, which hopefully everyone would do when considering making a large (in this case, potentially six figure) investment with any company..

It's not just the employees on LinkedIn that are a red flag. There is absolutely zero info on their website about the company, it's officers, directors, financials, history, etc. THAT is very strange for a supposedly reputable company. Pretty much ANY company regardless of industry has that basic info posted on their website.

I do like the product they're offering - and it's not just the rates that make me like it. But as there's literally no info whatsoever about the company available anywhere that I looked (and I did spend quite a bit of time trying to do proper due diligence), you're right - it's not worth the risk of investing six figures (or, IMHO, any amount) with them.

 

[jazz4cash]

That’s a significant sum but this is a very simple fixed rate product. I wouldn’t think it’s a red flag that the officers are not listed on a web page. I did get a list using google. They are one of a very few insurance annuities that are distributed directly with no broker which presumably lets them offer higher rates. OTOH I did get some level of comfort dealing with a broker like Blueprint Invv CB one before buying the product from A rated Americo. At least the brokers have some choice but the big name well rated companies don’t pay very well.

 

[Finance Dave]

We bought one of these within our FIDO TIRA recently. I wanted highly rated insurer, so we are only getting 1.7% but that's much better than CD rates of .5%. We just did $100k for now, as I wanted to see how it works. Once we get comfortable, we may open 3-4 more and spread them amongst insurers.

The one downside is all the legal requirements...we had to be "interviewed" by our adviser on the phone, then sign a bunch of documents online via Docusign, then got a huge contract in the mail. Just takes a little time to go through all this.

 

[catotx]

We bought one of these within our FIDO TIRA recently. I wanted highly rated insurer, so we are only getting 1.7% but that's much better than CD rates of .5%. We just did $100k for now, as I wanted to see how it works. Once we get comfortable, we may open 3-4 more and spread them amongst insurers.

The one downside is all the legal requirements...we had to be "interviewed" by our adviser on the phone, then sign a bunch of documents online via Docusign, then got a huge contract in the mail. Just takes a little time to go through all this.

Just curious, does Fidelity list the MYGA as one of your holdings in your TIRA? Or was the money simply withdrawn and you don't see it when you logon to Fidelity?

 

[Dtail]

Just curious, does Fidelity list the MYGA as one of your holdings in your TIRA? Or was the money simply withdrawn and you don't see it when you logon to Fidelity?

I see the MYGA in the holdings summary page, but it is listed separately outside the irrevocable trust, even though it is technically still in the trust.

 

[catotx]

I see the MYGA in the holdings summary page, but it is listed separately outside the irrevocable trust, even though it is technically still in the trust.

Thanks. If only Fidelity would also sell MYGAs from insurers with AM Best ratings in the Good and Excellent category. I think they currently only sell from insurers with Superior ratings.

 

[Dtail]

Thanks. If only Fidelity would also sell MYGAs from insurers with AM Best ratings in the Good and Excellent category. I think they currently only sell from insurers with Superior ratings.

Unfortunately that is correct. I think there are 3 current insurers they use.

 

[pb4uski]

They are "protecting" their customers...that is why my tIRA is no longer at Fido. Just a couple small HSAs.

 

[jazz4cash]

I agree but it seems that Fido isn’t too interested in offering MYGA choices. Brokered CDs are lousy also. They don’t have a problem letting folks load up on risky trades, though.

 

[jazz4cash]

Blueprint Income, my favorite MYGA portal has been acquired by Mass Mutual. They claim that BI will continue to maintain their brand and operate independently within MM. Although I have no direct experience with MM, I do have a favorable impression of them. I can’t recall positively, but I do believe MM was already offering their products on the Blueprint Income portal so it’ll be interesting to see how their products are offered alongside their competition.

Generally speaking I continue to be very pleased with the Americo 5 yr MYGA I purchased in Dec. One minor complaint… the Blueprint Income account summary shows no interest posted monthly or quarterly so far. No big deal I guess. I was planning to take advantage of the 10% free withdrawal feature on the anniversary but now I’m thinking I have access to funds earning less than this MYGA.

 

[retired1]

I also have positive experience with Blueprint Income. I didn't know it's been acquired by MM. It'll be interesting how it changes BI offerings especially MYGA

 

[jazz4cash]

I also have positive experience with Blueprint Income. I didn't know it's been acquired by MM. It'll be interesting how it changes BI offerings especially MYGA

Do you know how/ when nterest is credited to the account? May depend on the actual annuity company.

Edit: just scheduled a call to ask about this. Will update post after the call.

 

[jazz4cash]

Had my call with Bluprint Income today. They say MYGA interest for Americo accrues daily but I can only see the interest credits if I have account access at Americo. I really don’t want another password/user ID right now so I’m gonna ignore it. At least it’s not some goofy scheme that only posts once per yr.

 

[Luvtoride]

I have a MYGA through Oceanview Insurance. We locked in July 2020 for 3 years at 3%. The company was so swamped with applications and cash it took almost 2 months to issue the contract.
This was done to fund my 1st 3 years of retirement income needs at my anticipated retirement time. This also delays drawing SS until age 68.
I will check out the BI products mentioned here for future “CD like” needs. Interesting that they were acquired by Mass Mutual.