What Commission Option Do You Chose for Annuities and Why?
- 8,707
If the carrier offers these options they typically allow you to choose on a case by case basis. Having said that I've run the numbers on single premium policies and most of the time trails don't make sense do to the amount of time till you reach the breakeven point which is typically 7-8 years. By that time the client might be entering the distribution phase or the surrender charge is up and you can roll them to an new product for a new commission. I know some agents that have the client use the 10% free withdrawal to move money to a new annuity and new commission.
The theory is that a liquid contract ie one outside of surrender period isn't always in the clients best interest as the carrier can not afford to pay top dollar on liquid funds.
To answer your question I typically choose option A...I did have one carrier at one time paid a trail on the option A which was nice.
Awesome! Never thought of it that way. I will add that to my quiver of things to say to clients.
Joey Ramone
Expert
- 59
I always choose "A." I like to have total control over what I make.
- 8,707
I just want to know who at the carrier comes up with the commission numbers....If you choose Option B or C your almost or are out of surrender period before you reach the breakeven point.....The other thing that drives me nuts is I've seen the carrier change the app that originally says is no selection is made you choose the No Trail option then 6 months later no selection means option C....Always make a commission selection.
