Need help with variable annuity purchased in 2002

Oct 15, 2018

  1. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    You need to know:
    Account Value
    Surrender Value
    Death Benefit
    Riders

    As others have said, it sounds like this policy has an Income/Death Benefit Rider. It is a "shadow" account, that is only accessible 1 of 2 ways: 1. Lifetime Income Withdrawals. 2. Death Benefit to Beneficiaries. This account usually grows at an enhanced rate compared to the liquid Account Value.

    You can cash out of the Account Value... at least you should be able to. But enhanced benefits for income or death, are never liquid.

    It also sounds like the policy forces annuitization (or activation of the Rider) at age 90. That does not mean he loses the Death Benefit or any money. The DB is reduced by the annual payments he is required to take. But it will still pay out to the bene as long as it is there. At least that is how every singe Rider I have ever seen works.

    A lawyer is probably a huge waste of money. It sounds like a misunderstanding of the terminology and how the policy works. Either way, he signed the contract.... unless he was not of sound mind and body at the time... a lawyer cant do a thing.
     
  2. bmarsh
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    bmarsh Super Genius

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    what is the name of the product, I can get you the specs from Annuity Nexus

    Flexible premium is just the type
     
    bmarsh, Oct 15, 2018
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  3. bmarsh
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    bmarsh Super Genius

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    Nevermind I found it
     
    bmarsh, Oct 15, 2018
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  4. bmarsh
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    bmarsh Super Genius

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    The max annuitization age was age 90, however I see some notes where they allow a deferred option up to the annuitants age 100.

    Effective December 01, 2015, Issuer offers Deferral Option, subject to certain restrictions, which will deferred annuity commencement date to Annuitant’s 100th birthday.

    Call them and ask if he can defer annuitization until age 100.
     
    bmarsh, Oct 15, 2018
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  5. Allen Trent
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    Allen Trent Guru

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    At age 87, I would be shocked if the best option for him is anything other than leaving the account alone, taking money as needed, re-allocating the investment options inside the annuity to something within his risk tolerance. Moving it to a new annuity with new surrender charges likely wouldnt be in his best interest and wouldn't pass most companies suitability standards for his age.

    Cashing it out would likely be another problem as he would be taxed on all the gains since 2002 that he hasn't already taken.
     
  6. breakfaststout
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    breakfaststout Expert

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    Allen Trent-

    He can't leave his Hartford annuity alone, he will lose majority of his money. Did your read my post thoroughly ? This is the entire reason we are looking for other options so he doesn't lose his money. He has until age 90 to get all of the money out which is only 16k MAX a year, after that, he loses the money. If he dies next week at age 87 he has lost his $285,487. What do you mean by, 're-allocating the investment options inside the annuity to something within his risk tolerance" its a VARIABLE annuity. You don't think an Indexed or Fixed annuity would be safer or less risk than a VA? Help me understand. The Hartford will not pay out the remaining account value / death benefit if he dies, only the max 16k a year. He's 87 . Contract / policy ends at age 90.
     
  7. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    First, as you stated in your original post - you aren't familiar with annuities. Your terminology - even in this last post - shows that. Therefore, those of us who ARE familiar with annuities need to make sure we are understanding you as clearly as possible, but communicate as clearly as possible back.

    Second, variable annuities have various investment sub-account options that can be allocated according to one's risk tolerance. You could have it all be in the "fixed interest" account if it hasn't been doing well where it is now (which I doubt - the markets have been very favorable). The Hartford does not require any particular investment models - last I remember - even with lifetime income benefit riders. (It's been over 10 years since I sold a Hartford Director or Leaders Variable Annuity.)

    Third, at his age, moving the money from his current annuity to a new one would be... problematic.

    My best recommendation right now... is to call The Hartford directly. Ask your questions and the questions that scagnt83 listed and get clear responses and explanations. I would also specifically ask why you are limited by the amount you can take out each year. It doesn't seem to make sense.

    Did the contract "auto-renew" and so the surrender periods started over again each time? I recently heard about a story on a possibly similar situation.

    Johns Creek woman, 97, snared in annuity’s fine print
     
    DHK, Oct 15, 2018
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  8. breakfaststout
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    breakfaststout Expert

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    no , it did not auto renew. There are NO surrender charges if he wanted to surrender the entire amount , but yeah, he'd pay tax on the gains. i believe it was just a garbage product that he as sold back in 2002.

    i might also add, he does not need the money and simply wants to save the account value/ death benefit. He has no plans or need to surrender the new policy.. starting a new 5 year surrender period is not an issue .

    Thanks for the info. I'll take it from here. Appreciate it......
     
  9. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    It is quite interesting how someone who doesn't understand annuities... now believes that it must've been "a garbage product".

    As far as "starting a new 5 year surrender period not being an issue"... he's 87. That's an issue. You probably don't know WHY it can be an issue, but it is one.

    I encourage you, for your own professionalism, quit judging things negatively until you understand them and can form an informed opinion.
     
    DHK, Oct 15, 2018
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  10. breakfaststout
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    breakfaststout Expert

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    DHK your tone has always been condescending and off-putting. I'm not an annuity specialist but i'm also not a dumb ass either and have been in the financial services industry for over 10 years. Not sure why you feel the need to throw your weight around on any topic that is posted and act like a know-it-all. After all, I have the policy and the statement, i'm not just throwing bogus figures out. Please go finish your tub of ice cream and cartoons. I don't need your input as i've received much more valuable information from other members on this forum who are dicks and another brokerage firm i'm working with. "peace out"
     
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