Bonus or No Bonus Annuity

Presented by David Corwin

I think I’d take the latter – let me explain why. I’ve been in this ever changing Indexed annuity world for several years now and not unlike any other aspect of the insurance world, it is constantly changing. I’ve worked with hundreds of agents in my career. I work with some agents that only write bonus contracts. I’ve compared two of the best selling products with a particular carrier; one with a bonus and one without. I used the same index strategy and time period and the results were quite alarming. The bonus product that offers a 10% premium bonus netted $151k at the end of 20 years and the product without a bonus was over $215k. Why is this you ask? Well, I will tell you that typically on bonus products the commission rate is higher and thus the cap rates are lower than on a non-bonus product. This can result in much better performance long term.

Are Your Clients Prepared For Long Term Care?

Presented by Leonard Berthelsen

It has been reported in many articles and news features that Americans are just not prepared for the issue of long term care in the later cycle of their life. Are you? Are your clients? By most accounts most of us fall into the unprepared category.

Baby boomers have heard for 10 + years that it is coming, and it could happen to them. Did they prepare? Well let’s look at some of the data that may surprise you. Most baby boomers have done a poor job of saving for their eventual retirement. (34% of surveyed baby boomers felt they had saved enough to comfortably retire). In another survey it was revealed that 57% of those reaching age 65 would continue to work in order to live their achieved lifestyle. Not by choice, but by necessity. The American Association for Long Term Care reports that although insurance for long term care services continues to be sold, only about 10% of older Americans have purchased the coverage. Then those same Americans reported that if long term care needs arose, 53% of them would hire a caregiver or move in with a family member. (Provider magazine, April 2016)

We are probably not going to achieve critical mass with long term care insurance products without some form of government involvement or mandate. This is a high risk business for most insurance carriers and as we have seen in the past, the risk was too great for many of them, while others significantly scaled back the benefits they offer in order to manage the risk.

So it really all comes back to who is going to pay for this. Personal wealth, family, government…your choice! I think most people would want the choices afforded when paying for it themselves. So let’s talk to them about some of the choices.

Yes, long term care insurance is an obvious solution but many simply can’t afford the premiums, can’t medically qualify or simply have an issue with long term care specific coverage. Then why are we not talking about the alternatives available? Life Insurance with access to long term care benefits prior to death, Annuities with access to additional dollars for long term care services, Short term care plans and Recovery Care products. It doesn’t have to be all or nothing when it comes to protection for long term care needs.

The next client you sit down with, ask if they are prepared for what many Americans are finding out. We are living longer, with developed health issues that make long term care needs almost inevitable. It’s time for us to make sure our clients know all the options available to them. Their financial future and your livelihood depend on it.

“Mailbox Money”

Presented by David Corwin

Living too long is a risk that many seniors are faced with today.  Studies show that a 65 year-old man has a 34% chance of living to age 90 and a 17% chance of making it to 95. A 65 year-old woman has a 44% chance of living to age 90 and a 23% chance of reaching 95.  These longer life spans present wonderful blessings, but difficult challenges with the real risk of running out of their savings they have worked a lifetime to create.

Annuities can provide a lifelong check directly to their “mailbox” to help mitigate the risk of running out of money. I can help you position one of the products below to best fit your client’s needs:

  • Single premium immediate annuity (SPIA) – this annuity offers an income for life or a certain period of time to be paid out.  Often a good fit to cover the time between retirement and social security payments (and other scenarios), but the client does give up “control” of the lump sum asset in return for a potentially larger payout than other types of annuities.
  • Fixed annuity – this annuity still gives the client 100% control over the asset, which means they can withdraw money as needed, but how long it lasts is dependent upon withdrawals and interest gained on the contract.  Generally speaking, 10% penalty free amounts are withdrawn so additional fees and charges aren’t incurred.  The drawback would be that income will not last for life, unless annuitized, which of course forces the annuitant to give up control of the asset.
  • Income rider – this is a rider that is available on most indexed annuities.  These seem to be the most popular because many contracts guarantee a future result. The client still has complete control of the asset while also knowing they can have “mailbox money” for life.

Please call David Corwin at 800-397-9999 and let me help you fit your client’s needs.

The Right Fit

Presented by Deb Strong

Do you have clients that can’t tolerate the stock market roller-coaster ride?  Maybe they’re close to, or in retirement, and protection of assets accumulated from years of hard work just can’t be exposed to volatility.  Maybe they need to mitigate the risk of a potential long-term care event.  Maybe the goal is a stream of income that cannot be outlived.  An annuity may be the right tool for the job, but with the myriad of options available with annuity products, it’s important to find the right fit for your client to solve the problem effectively.

Call me, Deb Strong, at 800-397-9999 to help position the RIGHT product as the solution to any problem your clients face!


Are you selling the right product?

Presented by David Corwin

We are all financial professionals and our role is to fit the proper product and planning to the problem the client is trying to solve. When positioning an annuity, sometimes we think the product with the most options available is the proper tool, when often it’s not the best approach. Nothing is free and riders typically have a cost that can impact the ultimate solution that we’re trying to provide. With improper planning we can end up with the “never gonna use” riders (I call them NGU’s). In many situations, the simple, “vanilla” indexed annuity can benefit your clients and avoid the cost of the NGU riders. With all the moving parts in annuities today, we can narrow down our carrier and product choices by simply finding out the end goal for the asset. Are they simply trying to protect retirement funds from market losses, trying to provide lifetime income today or in the future or just re-positioning CD/money market funds for a short period looking for a better return? Finding out the answer to those questions certainly narrows down the choices, provides a better product fit and gives you more credibility today and in the future.

I can help you navigate the wide-array of product choices and find the solution that makes the most sense for each client-specific situation. Give me a call today at 800-397-9999!