Do you - or your Prospect - have a Risk Bias?

For example, concerns about a loss of principal can be alleviated by showing how various FIA crediting methods would have held value during periods the stock index was down in value. Similarly, concerns about earning 'too little' interest can also be addressed by showing how an FIA Credit Method can outpace a CD rate.

Even if you feel your prospective client is not very sophisticated, you both can benefit from the use of our FIA hypothetical reports. They help you understand what you are selling, and help the client better 'see' what they are buying.
 

This type of report is used to show a "hypothetical" of an index crediting method's "past performance". Although this past (hypothetical) performance isn't an indicator of future results, it does make evident how that crediting method will behave under specific stock index conditions. The goal when using hypotheticals is to set appropriate expectations for a crediting method's interest-earning ability.
 

Our Historical Hypothetical reports can also demonstrate the effect that taking out an income stream would have on the growth of an FIA crediting method. These are known as Historical Retirement scenarios.

Sample Retirement Income Hypothetical (PDF)

The following programs use historical hypotheticals exclusively: FIAnalyst-Lite; and HyStudy (MCP Suite 2007). The programs ImmStudy and SimStudy (MCP Suite 2007) use historical hypotheticals along with Monte Carlo simulations.

Hypothetical, historical analysis is also known as "bootstrapping" or "backtesting". You should know that it is considered valuable for developing investment expectations by Nobel-laureates and other founders of modern financial science.
 

Learn more about the Validity of Historical Hypotheticals. (PDF)

Learn about an alternative, predictive method, Monte Carlo Simulation.

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