Shady Mellberg

[AnnuityGuy63]

So let me 1st say, I am ashamed that I used to work for this organization.

But now I know better. Did they teach me?

No, I taught myself what not to do.


This all sounded great since I didn't know my a$$ from a hole in the ground.
They told me to sell there client a 1x5 annuity using a regular FIA to fund an IUL.
(defer 1 year and then annuitize over the remaining 5 years )
and I get paid full comp on the FIA and also full comp on the IUL... sounds great, here's the problem I knew you can't take more than the 10% each year from the FIA but they told me as long as the client defers 1 year they can. I never heard of such a thing but I was green and listened to what they told me to do.

Now my client is taking their withdrawal to fund the IUL and the insurance company says they never heard of such a thing although last year the client was able to take the withdrawal and no penalties...

now getting hit with penalties... what do I do?

 

[goillini52]

So let me 1st say, I am ashamed that I used to work for this organization.

But now I know better. Did they teach me?

No, I taught myself what not to do.

now getting hit with penalties... what do I do?

Go into hiding and don't answer your phone.

 

[Allen Trent]

Call your E & O. You errored & you omitted.

BTW. Your 5th paragraph said you were telling them to defer 1 yr, then annuitize. Annutization is an irrevocable decision to received fixed payments, but you later say the client is merely taking withdrawals. Those 2 things are on opposite side of spectrum.

As much as I don't like the client paying surrender charges, probably income taxes, possibly early distribution penalties.......I am even more concerned about the design of the IUL & how that will look when the annuity is empty & not able to cover premiums.

Proactively contacting E&O might help show effort on your part should get worse with Insurance Commissioner complaint, etc as that could cause issue with maintaining your license

 

[scagnt83]

Annuitizing usually does not incur surrender charges. Withdrawals do.

You could have used a Fixed Period SPIA and accomplished the same thing, and would not have had to wait 1 year. Of course the comp is less than half on those products....

Have the client annuitize, not withdraw.

Some FIAs allow a 20% or 15% one time withdrawal if there are no free withdrawals the prior year. That might be the case with yours.

Stop trusting your upline and do your own due diligence.

Did you disclose to the client that the IUL offers a Premium Deposit Account that probably would have provided a higher annual premium vs. the FIA annuitization? That could be a serious issue if litigation happens. There can be reasons to use an annuity vs. PDA... but no reason to not disclose and compare the two for the client. (your upline didnt tell you this because it doesnt pay comp)

 

[somarco]

David Duford has this review of someone named J D. Same guy?

J.D. Mellberg Agent Career Review - Duford Insurance Group

 

[Allen Trent]

Another major suitability/best interest issue is "was the Annuity carrier informed that the Annuity would be almost immediately liquidated for a life insurance sale so their compliance area knew the facts", or was the suitability area of the app stated the purpose of the annuity was for a different purpose & they had adequate other liquid assets

 

[pfg1]

You can't take out more than 10% typically without a surrender charge. I guess if you annuitize for 5yrs it could be possible?

This seems to be a fad over the past few years. Double dip.

Some even promote liquidating clients 401k, to fund annuity, then liquidate that systematically to fund perm life. I can't see any of this ending well from a compliance perspective. The agent is the one benefiting the most (most likely) especially with the huge cases some of these folks are writing.

 

[AnnuityGuy63]

I spoke with the carrier today and they do in fact have this availability for the ceint to annuitize over 5 years "if the client does in fact live in Florida". So I recieved the paperwork from the carrier and forwarded to the client for signatures.

All is fine here but it took many phone calls to find out this product does in fact exist.

I just wish there were other carriers as I can't stand dealing with this carrier.

 

[scagnt83]

I just wish there were other carriers as I can't stand dealing with this carrier.

There are others. Your IMO just is not promoting them to you.

 

[AnnuityGuy63]

There are others. Your IMO just is not promoting them to you.

Who else does this beside Atlantic Coast?
I have ran my IMO crazy with requests and they are clueless to this concept.