Variable Annuity Commission Vs Immediate Annuity

[Raider123]

Would it be fair to say the immediate annuity is on average about half the variable annuity commission?

Reason I ask is because I want to use this to make a point to my client. They are older and main focus is on maximizing income. I have some competition in there showing a variable and we just dont think it is right for them. Our product has about a 3% commission and the variable I am assuming has about a 6%.

Thoughts?

 

[hammerken]

Varuable Annuity contracts have different payment options to the rep. In addition the comp can depend on the surrender period. Who is the carrier and what contract are they showing. My guess also is they are showing an income rider which would add to the fees within the contract.

 

[Josh]

This is another one of those situations that makes us all nervous for you. Absent you having your securities license, you really don't want to be talking about variable annuities with clients. You have no business talking about them and can invite trouble if you do. If you feel the compelling need to discuss then, you should get your securities licenses.

 

[Raider123]

Thanks for your concern Josh. This is a joint case and he has a securities license and much experience.

 

[SWM]

Do not assume. Three share classes and averaging anywhere between 2-7%.Some of my clients VA's are on a fee platform and pay trails only. Commission on the VA may be reduced based on age as well. If your sales leverage is based upon how much commission each product pays, you may need to focus on the benefits, risk tolerance, etc.

 

[hammerken]

"This is another one of those situations that makes us all nervous for you. Absent you having your securities license, you really don't want to be talking about variable annuities with clients. You have no business talking about them and can invite trouble if you do. If you feel the compelling need to discuss then, you should get your securities licenses."

That is also a good point. Tread lightly if you are unlicensed in this area.

 

[Josh]

Thanks for your concern Josh. This is a joint case and he has a securities license and much experience.

Let me just run back to you what you just said in this thread:

You are asking a bunch of people on the internet generic questions about a situation that is questionable and now you're claiming that you're working with someone on this that is very experienced. If you're working with someone that knows the situation and is very experienced, why wouldn't you just ask them? Surely they would know the situation better and be more qualified to help. Something doesn't quite add up.

 

[Raider123]

I am asking a general question about how the commissions on a variable annuity compared to an immediate annuity. A life insurance agent that is not licensed to sell variable annuities might want to be know what the possible motivation is behind their competition pushing a variable annuity on a 76 and 79 year old. It is not illegal question to ask this question.

It is great how concerned you guys are for me, but I wanted to get multiple answers although I believe to know the answer. As for the broker I am splitting with, I tend not to bother him with questions that I can get answers from on the forum. If that offends you, you don't have to answer the question.

It is really irrelevant to him because no matter what the answer, we are still recommending an immediate annuity. If the variable annuity made better sense, he would sell it and get me back on a future sale.

 

[VolAgent]

There are lots of reasons a VA may make more sense than a SPIA for someone that age. If all you can do is attack the commission, then it suggests they may be very close in value to the client.

Also, without knowing the particular VA and share class, there is no way to know what the GDC would be or the payout to the rep. Even then, not all B/Ds receive the same GDC.

 

[Raider123]

Thanks Super Genius. Yes we are selling the immediate annuity based on their number one objective to maximize income for the wife because she will need the income if her husband passes first.
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oops i meant SWM..you are a super genius.