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Case study: How an annuity can help Asian American investors

About Sherly Yang

Sherly Yang is a small business owner who moved to the U.S. with permanent resident status five years ago. She is 50 years old and has liquid assets of $200,000 in her bank account that she earmarks for long-term savings.

In an inflationary environment, she worries about the decrease in the value of the dollar over time by placing her money in CDs.1 She is also concerned about skyrocketing housing prices, and high-interest-rate loans stopped her from investing in real estate with her partner.

Sherly is looking for savings options to maximize return without the risk of losing her investment.2 She also wants a lifetime income with the possibility of leaving money to her children.

Sherly doesn’t want to pay monthly or annual fees. Instead, she wants 100% of her premium to be credited to the contract value. Because she is in her 50s, she knows she has more time to grow her money and is looking for a 5 to 10 years horizon.

After talking to financial professionals, Sherly wants to examine two of the ways she may accumulate wealth.

Scenario 1:

Suppose Sherly put $200,000 in a 1-year term CD at a 2% rate and continuingly renewed for 10 years at the same hypothetical interest rate. At the end of year 10, the cash value of the account would have grown to about $243,799. If we encounter the cash value with a 3% inflation rate, $243,799 after 10 years would equal as $181,409 as today’s dollars.

YTP Sherly Yang Scenario 1

1Traditional deposit products may be FDIC insured and CDs are bank products that are FDIC insured. Fixed Index annuities are insurance contracts that are guaranteed by the issuing insurance company and are not FDIC insured.

2A Market Value Adjustment may be applied on withdrawals made during the withdrawal charge period.


Scenario 2:

Sherly purchases into $200,000 ForeAccumulation II fixed index annuity (FIA) and allocates 100% in an S&P 500 one-year point-to-point strategy 3,4 with a hypothetical annual cap of 8%.

At the end of year 10, the cash value of the account would have accumulated to about $370,. If we encounter the cash value with a 3% inflation rate, $370,186 after ten years would equal as $275,453 as today’s dollars.

YTP Sherly Yang Scenario 2

This chart assumes no fees, charges, or withdrawals are taken from the FIA during the illustrated period and reinvestment of dividends is not included. Index past performance is not indicative of future results. The hypothetical performance of the fixed index annuity, as illustrated, assumes a $200,000 premium, a cap of 8.00 % (using the One-Year Point-to-Point with Cap crediting method only) and assumes no withdrawals or surrender charges during period shown. This hypothetical example is for illustrative purposes only and not intended to be the performance of any specific product.

3 The S&P 500 is an unmanaged index and is not available for direct investment.
4 Interest crediting strategies vary and may involve different methodologies such as fixed rates, index caps and spreads and are declared in advance and guaranteed for the entire strategy term. Refer to Global Atlantic’s Fixed Index Annuity Interest Crediting Strategy flyers for more information.

Important Interest Crediting Risk Information: For illustrative purposes only. Past performance is no guarantee of future results. Actual results will vary. Annual cap reflected are hypothetical in nature, are subject to change and may be higher or lower the current rates for this product. This hypothetical example is for illustrative purposes only and is designed to illustrate the relationship between initial premium payment and growth opportunities.

Use of index-based interest crediting methods involves risk, including the possibility of 0% interest crediting. Linked indices fluctuate in value depending on general market and economic conditions and may be subject to increased volatility, particularly during adverse global, political, non-compliance and socioeconomic developments. Interest crediting strategy caps, spreads, participation rates and trigger rates are also subject to change at the end of a Strategy Term.

Assumes ForeAccumulation fixed index annuity contract purchased. A fixed index annuity is not a registered security or stock market investment and does not directly participate in any stock or equity investments or index.

Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and assume compliance with the product’s benefit rules, as applicable.


By the end of year 10, Sherly’s hypothetical contract value would be $370,186, which would be $126,987 more than option one at the end of ten years. As Sherly starts withdrawing the income, the remaining contract value would have the potential to continue to grow with the strategy she selects based on the linked index performance.

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