Reflecting on Life Insurance
Presented by John Schraut Remember that a life insurance policy is more than just a collection of papers with words and figures on them; a life insurance policy is vastly more than the sum of its parts. A life insurance policy is that small bit of comfort in someone’s life — someone’s life that has just been turned head over heels by the loss of a loved one. It is helping that spouse remain in the family home and not having to take a second job to make ends meet. It is a chance for those children to attend college with without putting undue stress on the family to find a way to pay for it. It is PEACE OF MIND.Annuity Income Riders
Presented by Jim Guynan
Recently I heard that almost 60% of index annuities sold today have an income rider attached to them. Also, the average time before the income is activated from the rider is only 1.8 years. What does this tell us about fixed index purchases and income riders? Simply, that more than half of the owners of fixed annuities are thinking about the future use of these assets as possible income sources and they are utilizing it in a new way.
Before income riders became available there were really only two ways to access an annuity; a 10% penalty free withdrawal per contract year or to annuitize the annuity contract. Now there is a third option which is activating an income rider payout that will provide an income for the rest of the owner’s life. The advantage of this is that the owner does not give up control of the underlying fixed annuity in order to do so. What is interesting to me is that the average time to activate is so short. Many of the illustrations I run for agents show longer deferral times before income is needed. One explanation could be that only those people who need income now are buying the annuities. As time moves on, I believe that more young people will become educated on the advantages of the riders and take advantage of the longer deferral.