8.15% Income Account with a 10 Year Roll Up?

[Freddie]

Carrier awarded Jack Marrion award for renewal rates?

Learn How to Stop Getting Beat by Income Riders and Burned by Renewal Rates! - Gradient Insurance Brokerage - on ProducersWEB.com

Who is really good with renewal rates?

North American? LSW? American Equity?

I think this may be LSW. I think Jack likes them.

 

[0b1kanobee]

That 8.15% is only good through the summer but I have a feeling it will be extended and I'm refferring to LSW income rider.

 

[Freddie]

That 8.15% is only good through the summer but I have a feeling it will be extended and I'm refferring to LSW income rider.

Thanks. I found it here:
http://www.lswemail.com/CurrentRates.pdf

I wonder if the 8.15% is for the first 10 years then reverts to 7.0% for the final 10 years.

 

[padthaiforlunch]

Client must wait five years to turn on income with LSW.

 

[0b1kanobee]

Client must wait five years to turn on income with LSW.

I don't think that is so but I will verify tommorrow as I have the LSW calculator on my computer since that is mainly what I write. I should know but I haven't had that come up yet. Only take me a few minutes to find out though once a fire up the computer. On iPhone right now.............can't sleep lol

 

[bluemarlin08]

When one starts their income stream, how does it compare with an income stream on a SPIA? I know from my review of other similar contracts, using current returns on SPIA, the income stream on the SPIA is much higher. The 8% compound on the side account is, IMO, another index annuity ruse.

 

[TRSecurity]

Additionally, right before this "summer special" of 8.15% rollup, LSW lowered the payout % when the income rider turns on. So, in terms of actual $, you get similar payments compared to when they were offering the 7% rollup.

 

[Freddie]

Additionally, right before this "summer special" of 8.15% rollup, LSW lowered the payout % when the income rider turns on. So, in terms of actual $, you get similar payments compared to when they were offering the 7% rollup.

? I thought on every rider once you turn on income, you no longer get the 6,7,8% depending on the company.

I thought on some of them you can turn off income and the 6-8% income can start accuring again on the income side.

I thought your income is fixed unless the account value side has gains so you can "step-up" the income.

Thanks.
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I don't think that is so but I will verify tommorrow as I have the LSW calculator on my computer since that is mainly what I write. I should know but I haven't had that come up yet. Only take me a few minutes to find out though once a fire up the computer. On iPhone right now.............can't sleep lol

Once you start taking the income on LSW - the 8% growth on the income side stops?

Are there any income riders where the client can start taking income and the income side still grows at 5 to 8%? Thanks.

 

[0b1kanobee]

When one starts their income stream, how does it compare with an income stream on a SPIA? I know from my review of other similar contracts, using current returns on SPIA, the income stream on the SPIA is much higher. The 8% compound on the side account is, IMO, another index annuity ruse.

you have to remember that the roll up rate is useless unless you let the account sit and accumulate. If you start it out as a SPIA without accumulation then you just shoot yourself or the client for that matter in the foot. The way it works is deposit money, let it sit then withdraw for life on the payment that never changes. If you screw with the actual cash value then it screws with the gaurenteed payment for life.
Unlike ING with LSW there is no inflation adjustment so your first several years with LSW will be higher payments. I just did a comparrison with ING and LSW and it took ING 15 years to catch up to the payment of the LSW product.

The reality is every situation is different. There are times when a SPIA is better and times when it isn't. There are also unforseen things that happen after the deal has been inked that are usually caused from the client deviating from the original plan short of the insurance company going belly up. One cannot make blanket statements and believe in absolutes when it comes to annuities. It is what works best at the time and looks good for the future based on the information we have at the time to work with which involves analyzing and planning. Many times more than one product and company are used to achieve the goal known as laddering. This gets a bit more complicated and even tougher to present so the client understands.
In the case of that LSW vs. ING I did, I could of put them both in a seperate bag, shook them up, dumped them out on the table and in the end they come out the same. The selling point and what was better for the client was more money now vs. Waiting 15 years for it to catch up and surpass.

And yes the roll up rate is for 10 years then it changes but it doesn't matter if the payment never changes the way I see it.
When you look at caps and index rates and think what could happen (giant returns) don't kid yourself. These can be adjusted accordingly by the company. These products were not designed for that purpose and the way the companies invest your monies it just flat out isn't in the cards without risk. If you want that sort of exposure then a variable annuity could be thrown into the mix.

On every case I do I bounce ideas of a couple of the people I use and one other financial wiz I know. Sometimes I even get the opp to teach them something but I'm always learning. I don't have to but that works best for me.
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Additionally, right before this "summer special" of 8.15% rollup, LSW lowered the payout % when the income rider turns on. So, in terms of actual $, you get similar payments compared to when they were offering the 7% rollup.

I beleive they lowered the 'attained age' which in effect lowered the payout percent to be precise. This had nothing to do with the new roll up rate as that roll up rate isn't even permanent. It was either that, decrease commisions, mess with the caps, ect. ect.
I think and this is a big if here that it amounted to 1/10 of a basis point. It was very insignificant after we ran the numbers. I was just on the phone with the guy who knows exactly but forgot to ask.

If they readjust that when the roll up changes then I'll buy into your marketing ploy theory but I think it was done due to overall rates they are getting on their investments.

 

[spartuna]

Client must wait five years to turn on income with LSW.

The 5 year wait is only for the enhanced amount for LTC or not being able to permantely perform 2 of 6 ADL's