On the security side of indexing: There are many indices both foreign and domestic. The S&P 500 Index is the most popular in the U.S. It’s been called the poor man’s portfolio because of its diversity and low-cost fees. But diversity in and of itself is not a hedge against market losses. The index is comprised of 500 large cap companies that reflect equities and are subject to market gains and losses. So, it’s important to convey the risks involved with using indices.
On the insurance side of indexing: Some fixed index annuities have income riders; some with fees and others without fees. The income rider may be associated with payout features, bonus principal and lifetime guarantees. Make sure you are aware of what you’re selling and how the riders work. It has become a bone of contention and can lead to dissatisfied clients. Indexed Universal Life insurance generally has two sets of rates: one contractually guaranteed and the other current company practice. The cost of insurance, admin charges, policy fees are all expenses that are deducted from the credited earnings of the policy directly effecting the actual rate of return… you could lose money.
If you promote phrases like “zero is your hero,” you’re speaking inaccurately and subject to false advertising, an issue that may not be covered by your E&O insurance.