The whole annuity business stinks

Jul 2, 2019

  1. Tahoe Ray
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    Tahoe Ray Guru

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    SPIAs normally pay a 1 time commission of 3%.

    SPIAs and life insurance numbers are very closely correlated (a life payout from a SPIA normally pays close to what the premium would be for a permanent face amount life policy equal to the SPIA premium)...of course.

    Your term carrier likely issues these policies too. Guess where a lot of your term premiums go? Same general account.
     
  2. entrep1776
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    Hypothetically. So what would the numbers look like?

    Each 90 year old puts in $200. $1,000 total.

    One 90 year old dies each of the 1st 4 years.

    Last one dies at 100.

    About how much the agent get. About how much insurance company get. & about how much does grandma 1-5 get.
     
  3. DHK
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    I'm done. I have a lot less tolerance for bull**** than I used to. Just not worth it.

    [​IMG]
     
    DHK, Jul 25, 2019
    #23
  4. Allen Trent
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    Listen, I love Hegna materials. However, I think a graph showing his increased popularity & his own revenues will be in direct opposite trajectory of SPIA sales nationally. I don't blame him, it is just horrible timing as both the horibly low interest rates & the improved longevity have caused monthly payout rates of new SPIA to be really low in exchange for losing accesss to your money.

    We as agents could do our existing clients & their death claim beneficiaries a huge service if we helped them elect a payout on their existing old policies & death claims. Many of those not only have payout annuity tables with 2.5-4% guarantees, but also have outdated life expectancy tables with shorter life expectancy, Factors that both equal higher monthly checks to the client. Compared to new money SPIA, I have seen payouts 20-35% higher. But few, if any, agents seem to offer this to existing clients or death claim beneficiaries. Funny thing is many carriers pay the same commission on an internal payout as they do a new sale
     
  5. entrep1776
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    The 90 year olds was from your video.
     
  6. KRobby
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    That's exactly what happens (although not sure what you mean by "stock market"). Which is why there's so much more activity in those securities, particularly municipal bonds, than annuities. But with the guarantees and other features that come with annuities, they'll appeal and be a much better fit to a much larger spectrum of the population. Do you have the bankroll like insurance companies to diversify and hedge default and other risks? Annuities allow the consumer to take that off the table. In other words, like most comparisons, there is no better/worse.

    http://www.msrb.org/~/media/Files/Resources/MSRB-Fact-Book-2018.ashx?la=en
     
    Last edited: Aug 5, 2019
    KRobby, Aug 5, 2019
    #26
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