Annuity Replacement Decline - a Way Around It?

[scagnt83]

Of course, no one is looking to lie, break the law, etc. Yes, it would still be a replacement, BUT there would be no comparison, as the surrendered policy would be just that... surrendered.

You dont understand what I am saying or how the replacement form works.

If you do not lie and break the law, then you will mark "yes" on the Replacement question on the app.

If you mark "yes" on the Replacement question on the app then you will have to fill out the Replacement Form in the app.

When you fill out the Replacement Form it asks for the Current Value and the Surrender Value along with the contract number.

So if you are honest then there most certainly will be a comparison of the current vs. former.


Now I know of plenty of agents that do not say it is a replacement when they do a Rollover. And some states view the issue differently than others. But I would be very careful if it is a large part of their assets.... especially in your state.

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Current policy has no income rider, and still has seven years left. Client desires lifetime income benefit, especially the options with this rider (Simplified Income III with Allianz) offers. HATES to-date performance of an annuity that has a FOURTEEN YEAR surrender.

Short of the client begging for the new policy, I am curious what else can be done. Great client. Has referred me three other people already. Now, I fear like I appear to be the fool.

If the policy has a 10% withdrawal provision then you could just take 10% per year and move it over the the new product.

I am curious though why you would want to lock the client into historically low rates for the rest of their life? Especially with that product, and especially when the Fed has been hinting at a rate increase in the next 6 months... is it the increasing income option that you like with Allianz?

Imo, if the client wants future income then they would be best served in a short term MYGA or a 6 or 7 year IA. Then once rates have risen put them in the income product and lock them into a much higher income than they would lock in now.

 

[honestabe]

Are they taking immediate income? How old?

That product/rider is nothing exceptional...you should have plenty of options to move it.

Delaying five years, perhaps a few more. She is 61.