Annuity with Long Term Care Rider

[Josh Landis]

The SIA does just what I said it does. It is not the TVA. It had better do what I said 'cuz I've sold a crapload of it, including to myself.

I have a connection with the SIA and what I was told is that the only way the LTC rider works for the primary beneficiary spouse is if you elect a joint payout. So, as long as the income rider hasn't been triggered as a single payout, then you still have the option of electing a joint payout which would allow the spouse to access it, but if it's a single policy and the income rider has already been triggered as a single payout, then the beneficiary spouse can't use it. I would call your guy at Excel and get a very clear explanation on this...he should echo what I have here.

 

[Charpress]

Yes, I don't disagree with your explanation.

Since the joint or single payout has to be elected when income is turned on and the payout is calculated on what election you choose, it would not make sense to allow someone to add another party to the payout down the road. I hope that is not the way I explained it up above because I sure didn't mean it that way.

Obviously if the product allows you to turn on income for both parties if either gets sick and that is a big selling point for you, then you would never want to turn on income and elect anything but joint lives.

 

[Josh Landis]

Yes, I don't disagree with your explanation.

Since the joint or single payout has to be elected when income is turned on and the payout is calculated on what election you choose, it would not make sense to allow someone to add another party to the payout down the road. I hope that is not the way I explained it up above because I sure didn't mean it that way.

Obviously if the product allows you to turn on income for both parties if either gets sick and that is a big selling point for you, then you would never want to turn on income and elect anything but joint lives.

I mean to mention this earlier...great profile pic...great movie.

 

[Charpress]

Let me add as a PS that the ideal situation that makes this shine is where husband and wife have their own contracts and either spouse who is a beneficiary of the other spouse needs long term care.

For example, assuming income has not been turned on at that point and my wife needs LTC, then she would turn on her doubled income. And because my wife is sick, I could turn on double income with my policy is well.

I hope this is a better explanation.

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I mean to mention this earlier...great profile pic...great movie.

What do you mean? That is my picture.

 

[StanTheInsMan]

Forethought has a good program. These products are a good fit for a client whose push back is "what happens if I never need long term care and I just wasted all those premiums." Also the easy simplified underwriting compared to the pain and suffering of a fully underwritten long term care case is well worth its weight in gold.

 

[CALTCAgent]

Let me add as a PS that the ideal situation that makes this shine is where husband and wife have their own contracts and either spouse who is a beneficiary of the other spouse needs long term care.

For example, assuming income has not been turned on at that point and my wife needs LTC, then she would turn on her doubled income. And because my wife is sick, I could turn on double income with my policy is well.

Just trying to clarify,

This annuity allows you to double income on your policy, when the wife needs LTC ?

 

[Josh Landis]

Just trying to clarify,

This annuity allows you to double income on your policy, when the wife needs LTC ?

Yes, this product as well as many others allow this as long as the income rider is turned on as a joint payout and not a single payout. Basically doing a joint payout allows you the benefit of a joint policy when the funds are qualified and can't actually be issued as a joint policy, so instead the income rider allows a joint payout.

 

[DWPCL]

The SIA does just what I said it does. It is not the TVA. It had better do what I said 'cuz I've sold a crapload of it, including to myself.

Charpress how do you have the ratings talk with your clients when you present the SIA?

 

[scagnt83]

Charpress how do you have the ratings talk with your clients when you present the SIA?

That is my biggest issue with the product. I cant sell such a low rated company to provide a promise of lifetime income.

Yes, they are covered by the SGA. But that is hardly what you want to have happen to your clients. Even getting bought out often is a negative in clients minds. And the purchasing company often has no real incentive to keep caps/spreads competitive.... and I feel that agents disregard the importance of having decent returns on the account value for Income Rider products... the whole advantage of the income rider is to keep some liquidity.

I have sold AE riders in the past. But it was not for the majority of a persons assets. They also have a 60 something comdex compared to a 40 something with SB. Not to mention that SBs business/stability is very much tied to a single IMO... not a good thing from a risk standpoint. It wold be fine for a small portion of a portfolio, but never for the majority of one.

 

[Josh Landis]

That is my biggest issue with the product. I cant sell such a low rated company to provide a promise of lifetime income.

Yes, they are covered by the SGA. But that is hardly what you want to have happen to your clients. Even getting bought out often is a negative in clients minds. And the purchasing company often has no real incentive to keep caps/spreads competitive.... and I feel that agents disregard the importance of having decent returns on the account value for Income Rider products... the whole advantage of the income rider is to keep some liquidity.

I have sold AE riders in the past. But it was not for the majority of a persons assets. They also have a 60 something comdex compared to a 40 something with SB. Not to mention that SBs business/stability is very much tied to a single IMO... not a good thing from a risk standpoint. It wold be fine for a small portion of a portfolio, but never for the majority of one.

Although I am an FMO and don't have SBL and believe there are better options out there, I have to say that this seems a bit biased.

To be fair, SBL has 4 distribution partners and could easily open this up (1 for the SIA, but 4 for TVA). They are B rated, but let's face it, F&G, Athene, Equitrust are all B rated also and I know a ton of those policies being sold and they're good products. SBL is backed by Guggenheim, which helps with any sort of liquidity issue.

Also, I'd say that the SIA inparticular, similar to the F&G SIP is an income play only. So if someone is selling that to a client, it needs to be very clear that you're not going to have growth in your account, but you're going to get a life time income stream that is higher than you could with other products (based on guarantees).

I would also say that the advantage of the income rider is not for liquidity, but for guaranteed income you can't outlive. From my perspective, liquidity is how easily can the client access their money...obviously any FIA, except a few out there with ROP, have surrender charges, so in nature FIA's are not liquid investments - point being this isn't exclusive to SBL.

I am certainly not trying to disagree with everything, and believe me, I don't think that SBL is the best product (especially the TVA), but want to try and be unbiased here.