Annuity for 87 Yr Old Male, Pass or Play?

[tins]

I don't write annuities (only 3 in the past 3 years). Came across this guy on a Med Supp appointment. Not sure if there is anything I could or should do. Anybody with more experience than I, let me know if I should just forget about him or if there is something suitable.

He asked if I had any suggestions.
He likes annuities, but ONLY fixed.
His info:

87 year old, male, non-smoker. Mentally- very sharp. One heart valve not working correct. Never had or will havesurgery (not worth the risk according to doctor). Also, Rheumatoid Arthritis
Prescriptions:
Cetirizine- Allergies
Simvastatin- Cholesterol
Gabapentin- Arthritis pain
Hydrocodone- Pain
Omeprazole- Antacid
Atenolol- Blood Pressure
Sertraline- Anti-Depressant
Levothyroxine- Thyroid



His Financials-

$12,000 liquid in savings account earning 0.80%

$22,000 in H-Bonds

$231,000 in Edward Jones account in stocks, mutual funds,IRAs, and $19,000 loose in case he sees a good stock he wants to purchase(without having to free up money by selling off something else).

$186,000 in 2 Bank CD’s. One matures on October 9th,2012. The other matures on Nov. 18th, 2012.

Little under $800,000 in annuities.

Annuities:

1) Banker’s Life- Taken out in 1999. No surrenderpenalty. Earns a fixed 4%.
Current Value- $323,000

2) Shelter Life Ins Co- Taken out in 2009, Maturesin 2019.

Current value- $33,500. Earns 3-4%

3) Wealth Solutions (underwritten by Dearborn LifeIns Co)- Issued 4-24-2001

6 year Single premium deferred annuity.$26,000 value, no surrender penalty. Earns 3%.

4) Wealth Solutions (Dearborn)- issued 6-8-2001. 6-yeardeferred annuity. Current Value- $248,785 Surrender Value- $242,880.

Renewal interest from 06/08/2012 to06/07/2013 is 4.50%.

The Min. Guaranteed interest rate creditedto the account value is 3%.

5) Wealth Solutions (Dearborn)- issued 1-31-2002. 6-yeardeferred annuity. Current Account Value- $27,400 Surrender Value- $26,920

Renewal Interest Rate 01/31/2012 to01/30/2013 is 5.00%

The Min. Guarantees interest rate credited to theaccount is 3%.

6) Wealth Solutions (Dearborn)- issued 10-07-2001.6-year deferred annuity. Current Value- $60,915 Surrender Value- $59,625.

Renewal interest rate 10/07/2011 to10/06/2012 is 5.15%

The Min. Guaranteed Interest rate creditedto the account is 3%.

7) Wealth Solutions (Dearborn)- issued 6-19-2001.6-year deferred annuity. Current account value- $64,890 Surrender Value-$63,375.

Renewal interest rate from 06/19/2012 to06/18/2013 is 4.50%

The Min. Guaranteed Interest rate credited tothe account is 3%.

 

[b61mack]

If you were in cal, i would say pass. But since you are in a sane state. I say play.

 

[Tahoe Ray]

I don't write annuities (only 3 in the past 3 years). Came across this guy on a Med Supp appointment. Not sure if there is anything I could or should do. Anybody with more experience than I, let me know if I should just forget about him or if there is something suitable.

He asked if I had any suggestions.
He likes annuities, but ONLY fixed.
His info:

87 year old, male, non-smoker. Mentally- very sharp. One heart valve not working correct. Never had or will havesurgery (not worth the risk according to doctor). Also, Rheumatoid Arthritis
Prescriptions:
Cetirizine- Allergies
Simvastatin- Cholesterol
Gabapentin- Arthritis pain
Hydrocodone- Pain
Omeprazole- Antacid
Atenolol- Blood Pressure
Sertraline- Anti-Depressant
Levothyroxine- Thyroid



His Financials-

$12,000 liquid in savings account earning 0.80%

$22,000 in H-Bonds

$231,000 in Edward Jones account in stocks, mutual funds,IRAs, and $19,000 loose in case he sees a good stock he wants to purchase(without having to free up money by selling off something else).

$186,000 in 2 Bank CD’s. One matures on October 9th,2012. The other matures on Nov. 18th, 2012.

Little under $800,000 in annuities.

Annuities:

1) Banker’s Life- Taken out in 1999. No surrenderpenalty. Earns a fixed 4%.
Current Value- $323,000

2) Shelter Life Ins Co- Taken out in 2009, Maturesin 2019.

Current value- $33,500. Earns 3-4%

3) Wealth Solutions (underwritten by Dearborn LifeIns Co)- Issued 4-24-2001

6 year Single premium deferred annuity.$26,000 value, no surrender penalty. Earns 3%.

4) Wealth Solutions (Dearborn)- issued 6-8-2001. 6-yeardeferred annuity. Current Value- $248,785 Surrender Value- $242,880.

Renewal interest from 06/08/2012 to06/07/2013 is 4.50%.

The Min. Guaranteed interest rate creditedto the account value is 3%.

5) Wealth Solutions (Dearborn)- issued 1-31-2002. 6-yeardeferred annuity. Current Account Value- $27,400 Surrender Value- $26,920

Renewal Interest Rate 01/31/2012 to01/30/2013 is 5.00%

The Min. Guarantees interest rate credited to theaccount is 3%.

6) Wealth Solutions (Dearborn)- issued 10-07-2001.6-year deferred annuity. Current Value- $60,915 Surrender Value- $59,625.

Renewal interest rate 10/07/2011 to10/06/2012 is 5.15%

The Min. Guaranteed Interest rate creditedto the account is 3%.

7) Wealth Solutions (Dearborn)- issued 6-19-2001.6-year deferred annuity. Current account value- $64,890 Surrender Value-$63,375.

Renewal interest rate from 06/19/2012 to06/18/2013 is 4.50%

The Min. Guaranteed Interest rate credited tothe account is 3%.

You may get some flack from a carrier based on the % of assets in annuities, however it looks like more than half are free of surrender. Maybe note that on the financial suitability form (If they only ask % of assets in annuities).

Also verify that there is no surrender penalty on death with whatever product you use. He's probably too old for any other waiver (LTC, CI/TI etc).

As you said, he's sharp and it seems that he understands what he is doing (even owning and continuing to look for individual securities)...you could play here. Sounds like a typical rate shopper.

 

[senior-advisor-indiana]

Which heart valve is not working? Your answer will determine the correct solution...

 

[DHK]

What carriers/products do you have access to that will allow you to write an annuity at that age?

Any reason not to consider a single premium life product?

What is the goal for the money? Income? Leave to heirs?

 

[Tahoe Ray]

What carriers/products do you have access to that will allow you to write an annuity at that age?

Not sure how many the OP has access to but there are over 20...

 

[tins]

What carriers/products do you have access to that will allow you to write an annuity at that age?

Any reason not to consider a single premium life product?

What is the goal for the money? Income? Leave to heirs?

The reason I mention the heart valve issue is that prevents him from doing the single premium life. It would be the best option for his goal. He has other money he lives on, he plans on leaving all this into a revocable trust for his family.

I haven't a clue what products are out there that he would be able to get. I emailed this to one person I know that does annuities. He emailed me back:

---------------------
Elco- Employee’s Life.
B+

Fixed-
5-Year 2.8%
3- Year 2.25%
2- Year 2%

--------------------------


Said no other companies would offer somebody his age more than a 5-year fixed annuity (even though the gentleman would prefer it if it offered a higher yield).


Any suggestions?

 

[SWM]

I would not put him into a product with new surrender based on his age.

 

[Tahoe Ray]

The reason I mention the heart valve issue is that prevents him from doing the single premium life. It would be the best option for his goal. He has other money he lives on, he plans on leaving all this into a revocable trust for his family.

I haven't a clue what products are out there that he would be able to get. I emailed this to one person I know that does annuities. He emailed me back:

---------------------
Elco- Employee’s Life.
B+

Fixed-
5-Year 2.8%
3- Year 2.25%
2- Year 2%

--------------------------


Said no other companies would offer somebody his age more than a 5-year fixed annuity (even though the gentleman would prefer it if it offered a higher yield).


Any suggestions?

There are companies that will give him a longer surrender but there isn't a lot of yield reward for going out further. Also, even though in looking at his assets this money will most likely go to heirs, it may not be prudent to use a longer surrender.

I'm not sure what he's looking for but he shouldn't be expecting much more that what your friend emailed you....even if he was a 47yo.

 

[tins]

There are companies that will give him a longer surrender but there isn't a lot of yield reward for going out further. Also, even though in looking at his assets this money will most likely go to heirs, it may not be prudent to use a longer surrender.

I'm not sure what he's looking for but he shouldn't be expecting much more that what your friend emailed you....even if he was a 47yo.

I see, thank you.
Looks like I will pass on touching any of his current annuities and just offer to move the CDs (that are at 0.80%) into one of those Elco.