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[Life Hawk]

Fwiw, there are plenty of single-pay life products with 100% liquidity at any time (return of premium). There are also hybrid LTC products w/ 80-100% liquidity.

Yes, you'd lose your DB or LTC benefit but in a true emergency, you still have that money liquid.

And I completely agree with your last point, you can follow best practices but when you're dealing with health and markets, you need to have some luck with your timing to make everything perfect. Trying to cut out the worst-case scenarios and working "up" normally makes people feel better than hopes, dreams, and rainbows at the end of the day.

"Zero is your hero."

My fundamental approach to an annuity is security. I'm not the guy people go to, to make money. As life is my primary focus, I tend to lean into the protection aspect even at the cost of gains. It's just my mind set, and my clients are always made aware of the glasses I am wearing. '07 and '08 really caused me to re-evaluate this position, and I'm comfortable here even at the cost of some clients who intend to try and beat Vegas. A huge reason I never dabbled in IUL or Variable products. I'm not a magician, nor do I claim to be one.

I also have learned that over the years, few people can keep up with complicated multifaceted plans. If you get overly complex in your approach or move too quickly to place their money (a lot or a little) most will become overwhelmed and shut down.

A key aspect to any sale in my mind is simplicity. Not only for the client, but also for the agent. I keep my sails trimmed, I'm not a genius so I keep my product offering (companies) slim to avert stupidity.

Lot's to learn. I figure I'll have to stop when they zip the bag up on me.

 

[Tahoe Ray]

07 and '08 really caused me to re-evaluate this position, and I'm comfortable here even at the cost of some clients who intend to try and beat Vegas.

Again, some timing luck comes into play here.

I am right now evaluating two different annuity clients that have to annuitize to receive lifetime income (that's not normally the case with products issued in the last decade plus).

One has a cash value of 300k with a benefit base of 360k. The other has a cv of 1m and a benefit of almost 2m.

They are the same contract. The only difference is the one with the huge gap bought in 2006, the other in 2008.

So one contract caught the top and rolled up off of that, the other didn't. Was the original agent in either case wrong? No. Was one client luckier than the other? Absolutely.

 

[Allen Trent]

Again, some timing luck comes into play here.

I am right now evaluating two different annuity clients that have to annuitize to receive lifetime income (that's not normally the case with products issued in the last decade plus).

One has a cash value of 300k with a benefit base of 360k. The other has a cv of 1m and a benefit of almost 2m.

They are the same contract. The only difference is the one with the huge gap bought in 2006, the other in 2008.

So one contract caught the top and rolled up off of that, the other didn't. Was the original agent in either case wrong? No. Was one client luckier than the other? Absolutely.

sounds like the older one with the larger gap is a 2 tiered annuity design that defacto became illegal with all the class actions & attorneys generals scrutinizing them......and brought us to 10+ page applications focused on suitablity, best interest, etc.

Have helped several people annuitize those contracts directly with the carrier to get the annuitization instead of the much lower cash surrender value & even a couple were death claims that needed to annuitize to avoid the surrender charge from some of those products that were charging surrender charge at death.......................but I am sure they paid a much higher commission than the other products in the industry at the time

 

[scagnt83]

sounds like the older one with the larger gap is a 2 tiered annuity design that defacto became illegal with all the class actions & attorneys generals scrutinizing them......and brought us to 10+ page applications focused on suitablity, best interest, etc.

Have helped several people annuitize those contracts directly with the carrier to get the annuitization instead of the much lower cash surrender value & even a couple were death claims that needed to annuitize to avoid the surrender charge from some of those products that were charging surrender charge at death.......................but I am sure they paid a much higher commission than the other products in the industry at the time

I get they were not sold properly. But some of those old 2 tier FIAs had really great returns. Im talking 7%+. I encountered multiple Allianz FIAs that were over 10% annualized back in the day.

They had higher caps than the other products, and higher returns to prove it. Yeah, the agent did get paid more since its essentially a 15 year product and not a 10 year product... but the client got higher returns out of it.

Honestly, so what if you have to annuitize over 4 or 5 years to get your money out. Its still earning at that time.

If disclosed properly, it really shouldnt be an issue.

But I get it, human nature 10 years later. But honestly, very few of those people were financially harmed... most just forgot they agreed to a 14 year time period and not a 10 year time period.

Those products would have higher caps and participation rates if they still existed today. People want higher returns but dont want to commit to a longer time.... thats not reality.

 

[scagnt83]

Again, some timing luck comes into play here.

I am right now evaluating two different annuity clients that have to annuitize to receive lifetime income (that's not normally the case with products issued in the last decade plus).

One has a cash value of 300k with a benefit base of 360k. The other has a cv of 1m and a benefit of almost 2m.

They are the same contract. The only difference is the one with the huge gap bought in 2006, the other in 2008.

So one contract caught the top and rolled up off of that, the other didn't. Was the original agent in either case wrong? No. Was one client luckier than the other? Absolutely.

That has been my biggest issue with selling FIAs. Timing can really make or break returns... even just a few months can be a big difference at times.

 

[Tahoe Ray]

sounds like the older one with the larger gap is a 2 tiered annuity design that defacto became illegal with all the class actions & attorneys generals scrutinizing them......and brought us to 10+ page applications focused on suitablity, best interest, etc.

Both are standard GMIB VAs which were very popular at that time.

 

[Allen Trent]

I get they were not sold properly. But some of those old 2 tier FIAs had really great returns. Im talking 7%+. I encountered multiple Allianz FIAs that were over 10% annualized back in the day.

They had higher caps than the other products, and higher returns to prove it. Yeah, the agent did get paid more since its essentially a 15 year product and not a 10 year product... but the client got higher returns out of it.

Honestly, so what if you have to annuitize over 4 or 5 years to get your money out. Its still earning at that time.

If disclosed properly, it really shouldnt be an issue.

But I get it, human nature 10 years later. But honestly, very few of those people were financially harmed... most just forgot they agreed to a 14 year time period and not a 10 year time period.

Those products would have higher caps and participation rates if they still existed today. People want higher returns but dont want to commit to a longer time.... thats not reality.

Agree, the problem is very few agents even understood those early ones. The cash surrender value took about 12 years to get back to the original deposit at 1% guaranteed on 87.5% of originally deposit. The 2nd tier income aspect was not bad at all.........except a ton of people age 80+ bought them & had no need for income, so the real accessible value for that segment of the population really got hosed, especially those that moved the money 2-3 times with the same rep over a 15-20 year period & gave up 4-4.5% guaranteed annuities originally bought with carriers like Jackson National, etc.

 

[Allen Trent]

Both are standard GMIB VAs which were very popular at that time.

those were some pretty good contracts & likely why carriers with those early good ones went on a buying spree to try to intice customers into surrendering them for a decent payoff to get the high GMIB obligation off their books.

 

[Life Hawk]

I get they were not sold properly. But some of those old 2 tier FIAs had really great returns. Im talking 7%+. I encountered multiple Allianz FIAs that were over 10% annualized back in the day.

The old BPA product did some amazing things as well. Had one client who did close to 15% on top of bonus. Timing is key. Whish I had a crystal ball for that stuff.

 

[MAnnuity]

The old BPA product did some amazing things as well. Had one client who did close to 15% on top of bonus. Timing is key. Whish I had a crystal ball for that stuff.

I haven't been in front of the BPA/BCA in some time but if I recall they had some quite impressive returns over the years.