Variable Annuity Recommendation

[kenbill]

Yes, I understand Jackson National's product is better and has better guarantee. I recommended to the client, however, he wanted to avoid JNL because of the parent company Prudential UK's news on TV. What can I do? If Prudential UK sells JNL in the future and something bad happen to the product, I may get complaint from the client.

On the other hand, Prudential (US) VA product has a formula to change asset allocation that client cannot control. If the market drops a lot, a big % will be allocated to bond and it will be very difficult for the account value to go up.

There are two reasons to select the Transamerica product. One is the lower M&E and sub-account expense ratio. The other is the 75% guaranteed allocation to stocks. So this gives the client higher probability to get the step-up in account value.

I think one advantage of the VA product VS IA product is the higher potential to get the step-up of the stock market. Otherwise, if you compare the growth guarantee and rider cost, IA product always has better guarantee and lower rider cost.

Is there any other product you think is better? We haven't made the final decision, any suggestions are welcome and I really appreciate your recommendations.

 

[scagnt83]

I understand how clients can affect product choices; often times a clients bias is formed from media highlights such as your's seems to be.

But as advisors; it is our job to help a client overcome certain biases if it is in their best interest.

Think about this; what happens if Pru UK sells JNL. What happens to that JNL policy (aka: legal contract)? NOTHING.
They cannot retroactively change the language of the contract.
The riders, and amounts associated with them will still be respected as long as JNL is in business (and most likely even if they are not).
JNL is one of the largest insurance companies in the US, and has excellent finanical ratings.

They are a separate company than Pru UK. While Pru UK owns them, Pru UK are not the ones making the day to day decisions that affect existing products (especially products whos performance is based on underlying investments, not the company itself).

If Pru UK sold off JNL not a thing would happen to that policy you sold.


And with the Pru VA, I would not include the income rider along with the hdl rider. With the HDL rider, there is no real reason to add on an income rider imo.
Plus, you will have the IA with the income rider & roll-up, so I think that a fourth guarantee is a bit overkill possibly... jmo


I dont have much experience with Trans VAs, so I dont really have an opinion on them.

LFG has a decent VA product, and their "I-for life" rider is a nice income rider. I will have to find the specs on it.


Coincedentaly enough, the JNL wholesaler is stopping by our office in about 30min or so.
I will have to bring up the subject of the parent company and see what he says.

I would ask him who he considers his biggest competitors, but I already know his answer is Pru, Pru, and Pru... lol

 

[budfox7]

Exactly, read up on the state laws on VA's. They are actual actuaries the department of insurance has in place in the event something was to happen from a reserve stand point. Meaning these VA companies have to put X amount of $ in reserve for every dollar they accumulate. Scagnt83 is correct, nothing will happen to JNL from PRU UK. Like i said Pru doesnt have the subaccounts like Jackson and Jackson has better servicing for both you and the client when your trying to get things done. If you dont like PRU or JACKSON look at Sunlife i would even say Allianz VA but they are up there in expenses.