Variable Annuity Commission Vs Immediate Annuity

[VolAgent]

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.

With a rider on the VA, you could probably get a very similar payout and not surrender the principal. Plus there is the potential for growth in payout that is absent with most SPIAs. Food for thought.

 

[Tahoe Ray]

With a rider on the VA, you could probably get a very similar payout and not surrender the principal. Plus there is the potential for growth in payout that is absent with most SPIAs. Food for thought.

It will depend on the death benefit that you use for the SPIA but w/ CR on a 76yo female, you'd probably be looking at 8% for life...not sure how many VA riders would compete with that.

Now if you were to let a VA or FIA w/ an income rider cook for a couple years (vs. using a MYGA and then annuitizing it), that may be a more attractive solution. Especially since you could wait for the husband's death before turning on the income.

 

[VolAgent]

It will depend on the death benefit that you use for the SPIA but w/ CR on a 76yo female, you'd probably be looking at 8% for life...not sure how many VA riders would compete with that.

Now if you were to let a VA or FIA w/ an income rider cook for a couple years (vs. using a MYGA and then annuitizing it), that may be a more attractive solution. Especially since you could wait for the husband's death before turning on the income.

I haven't looked at riders in a while, but at that age you are probably near 6% payout. 6% plus not surrendering the principal can be mighty attractive to the right person.

 

[Tahoe Ray]

I haven't looked at riders in a while, but at that age you are probably near 6% payout. 6% plus not surrendering the principal can be mighty attractive to the right person.

On the FIA side, you could definitely get 6%...even with an ROP product. It's nice to have options...

 

[VolAgent]

On the FIA side, you could definitely get 6%...even with an ROP product. It's nice to have options...

I could sell 6% with the ability to cash out against 8% and gone all day long. Particularly to a 76 year old. As a matter of fact, I'd feel a little safer with 6% since depending on the payout option on the 76 year old it is gone or the children will have to wait some years to get the cash back.

 

[Norwayguy]

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.

This brings up an interesting point....As of 31 days ago my 2 year inactivity has passed on my securities registration and would need to retest and reregister to sell securities again. Having said that I can sell group nonregistered VAs now and my insurance license specifically says Life, Health and Variable Contracts....I really need to speak to a lawyer about where I really stand on source of funds issues.