Qualified Money Into An Annuity

[Norwayguy]

Excellent input guys. I have considered offering annuities to help people safeguard their money and have contracted with several carriers. It just seems so overwhelming with the different surrender periods and interest crediting methods. How would I know which ones would be the best for my customers? Ing vs. Genworth vs. Americo vs. American Equity? Oh my!

What are you doing now? I would think the easiest way to start would be to start offering annuities to solve 1 simple problem existing clients have....So if you sell health insurance now you could ask if they are contributing to a retirement account and if not offer a flexible premium product for them $10 or more dollar per month....From there you ask about old retirement accounts and you get used to doing transfers rollovers...More complicated cases it would be helpful to have a good FMO to fall back on....I would agree most of them only provide a list of product they have....I don't really have a recommendation for you...I use about 4 fmos to have access to more carriers.

But what has been previously mentioned that an annuity is an accumulation device with rules attached sounds like good advice.

Oh also you need to believe in what your offering or your prospective client won't either.

 

[sman]

First off, don't get involved with so many companies. ING is a good one to start off with. They have good name brand recognition and good products. Frankly, I'm surprised they aren't mentioned more around here on the forum.

Do you remember the older version of the ING Secure Index Seven? That was a product I could offer without hesitation. It had a 3% guarantee on 100% of the money. It had some caps that limited the upside to somewhere around 7.50%-8.00%, but with the guarantee of 3% it was attractive. I put several folks in that product who were in 3% fixed annuities. Worst case scenario they get what they had been getting with some upside potential.

Those were the good old days.

 

[scagnt83]

ING is a good one to start off with. They have good name brand recognition and good products. Frankly, I'm surprised they aren't mentioned more around here on the forum.

I would agree. Great company with great IAs.

 

[retread]

Re: Annuities Forum

Remember, Clark is the guy who paints with a broad brush. He's also the guy who suggests everyone invest in the market (I'm a fan of the market myself). He also states that the ONLY annuity anyone should invest in is an immediate annuity. In today's low interest rate environment, an immediate annuity may be the worst decision someone could make.

And lastly, I think the mistake almost EVERY insurance agent AND investment advisor makes is COMPARING an index annuity to the market. An index annuity isn't meant to compete with the market. It's a "safe" money alternative. I personally believe index annuities have a place in SOME portfolios. NEVER an entire nest egg. They can be used as a risk management tool.

I've had debates on this forum about why I like the market and why an index annuity is or isn't appropriate in certain situations. But to come on here and copy and paste what a retired travel agent has to say about a product which he likely doesn't know the specific details. Do yourself a favor and get educated on any product for which you intend to give advice. I don't mean that in a derogatory way. I've learned to never say never about products. I may say I will never sell it because I don't believe in it and personally wouldn't purchase it (whatever the product), but I believe there is likely a place for it. Take for example, cancer plans. I'm no fan of these type plans, especially when a person has adequate health insurance, but realize they have a place.

Since I have begun to sell various insurance products, I have come around to chucking some of my own ignorant prejudices... and indexed annuities is one of them. I handle the matter of annuities vs market products in this manner: straight life insurance and fixed annuities are contracts, whereas variable products, including VAs as well as VULs, etc are investments. Contracts have guarantees of at least minimum performance, whereas investments are at market risk and "past performance is no guarantee of future returns". I try to make a clear distinction between annuities and investments. Since I work the Senior market, I describe annuities as a safe place to park their successful investments. Seniors don't have much of a window to accumulate funds in fixed annuities. They have already created their wealth, now they need to protect it or transfer it.

Yes, I think some agents oversell indexed annuities... the same can be said of any insurance agent who does not follow appropriate guidelines of "suitability" or financial advisors who fail the fiduciary standard.

And yes, I agree with your comment about cancer insurance. But if you take the time to understand Critical Illness policies and their benefits and sell them appropriately, they can be a greater benefit to a client. They, too, are just not for everyone. My problem with Cancer plans, for example, is what if they die of heart failure?, etc. And if they are morbidly fearful of cancer, why? does it run in the family? How dumb do you think carriers are? Will they cover someone with a strong family history of cancer? But wait, there's more: A critical illness policy may cover cancer, heart failure, alzheimer's and other critical illnesses in one plan.... etc. We could go on ad infinitum discussing the pros and cons of Limited Benefit plans. P&C guys could jump in the conversation and right away compare "named peril" policies vs "comprehensive" and the such in their field. Same-o, same-o.

People like Clark Howard, Dave Ramsey, Suze Ormond, et al paint with a broad brush to appeal to their audiences. They are, IMHO, no different than snake-oil salesmen... just selling a different brand of snake oil. They speak just enough truth to lull an uninformed person into their way of thinking, and use scare tactics with "authoritive" put-downs of the products they don't like or sell. Coined phrases such as A.L. Williams' "buy term and invest the difference" get applause from the shills in the audience, but when was the last time you heard them discuss the "use it or lose it" issue? Or the skyrocketing cost of renewing a term policy after 20 years.... And just where are you going to "invest" that difference? In the stock market? NO! In THEIR products! Quite frankly, I prefer Permanent Life, but will hasten to add Term has its place. Where else can a young man with a family get an instant estate for a few bucks? However, it's not often a product that's appropriate in the Senior market where the possibility of outliving the policy is a problem, leaving them with an unrenewable policy.

I normally don't use a rock to pound in a nail, but if I don't have a hammer I might be tempted.

 

[KJ in Miami]

Re: Annuities Forum

Annuitizing it is not wise! Look up 72t or q.

 

[Norwayguy]

Re: Annuities Forum

Annuitizing it is not wise! Look up 72t or q.

Might want to reread the original post...The client was 40 wanting to annuitize in 20 years..40+20=60.

 

[DHK]

Re: Annuities Forum

Annuitizing it is not wise! Look up 72t or q.

STFU.

BTW, Annuitizing NEGATES the need to do 72t or 72q, because it's already annuitized, versus doing Sequencially Equal Periodic Payments.

 

[padthaiforlunch]

Looks like we have a troll. The guy knows nothing about annuities, yet he's able to toss about 72 like an autistic chimp.

Perhaps kc would like to start over and ask us about how annuities really work.

 

[Larry Tew]

I've already insulted him (he deserved it) on two other threads. Another one and I might get the reputation of being a bully.

 

[KJ in Miami]

Wow... such positivity, it is almost unbearable!