Which Income Benefit Riders Do You Like?

[ScottLFB]

I wonder how many agents write EIA's with B rated carriers?

Not all the A rated companies have features that accomplish what the client is trying to do. You should see how many securities guys write Liberty Bankers for their 1st yr rates even though the company is B-.. Many agents keep a blind eye to anything happening in the market and just look at the AM Best rating, but many don't know that AM Best is a rating company that carriers have to pay to get rated by. And they only rate about 40% of the insurance companies out there. On the other hand you have Weiss Ratings which is a non-profit who rate 70% of the carriers out there. Now seeing that Allianz or Aviva is a C+, does that scare you from writing any of there product. No, because like anything we do in this market you have to do your due diligence and research the carrier.

Disclaimer - I'm not saying negative about the above insurance carriers, I'm just debating ratings.

 

[VolAgent]

Not all the A rated companies have features that accomplish what the client is trying to do. You should see how many securities guys write Liberty Bankers for their 1st yr rates even though the company is B-.. Many agents keep a blind eye to anything happening in the market and just look at the AM Best rating, but many don't know that AM Best is a rating company that carriers have to pay to get rated by. And they only rate about 40% of the insurance companies out there. On the other hand you have Weiss Ratings which is a non-profit who rate 70% of the carriers out there. Now seeing that Allianz or Aviva is a C+, does that scare you from writing any of there product. No, because like anything we do in this market you have to do your due diligence and research the carrier.

Disclaimer - I'm not saying negative about the above insurance carriers, I'm just debating ratings.

Better read your E&O. Very common to be left high and dry on any carrier with a rating less than A or A-. Does that mean a B or C carrier is about to go under, probably not. But if it does and your client sues, your E&O won't be there for you.

 

[lbritt]

Phoenix offers free, supplemental E&O ($1M per claim, $5M aggregate) to every Phoenix producer for that very reason.

 

[annuityseller]

I like the codex or comex rating (something like that) which combines all the rating together, 100 being the best??

 

[ScottLFB]

I like the codex or comex rating (something like that) which combines all the rating together, 100 being the best??

Half the carriers don't even know their Comdex rating because nobody asks about it. The only company that seems to care about that rating is NorthWestern Mutual.. Obviously there may be more I'm not stating that as fact, but it's the only one I've run into..

 

[JrGuru]

Phoenix offers free, supplemental E&O ($1M per claim, $5M aggregate) to every Phoenix producer for that very reason.

Its 50/50 the agents I talk to about Phx because of the b rating, I personally sell the hell out of the reflections gold product, best income riders out there right now imo

 

[lbritt]

JrGuru, agreed. Forethought is a substitute, I guess, but we've been putting huge cases with Phx with the Income 125 rider. We don't do Reflections, though.

 

[TRSecurity]

A lot depends on the length of deferral.

Assuming 10 years, in order of my preference:

Midland/North American
American Equity
Equitrust
Phoenix
National Western

For shorter deferrals, Forethought comes into play.

I also use ING, Avivia.
Checking out Great American
Shying from Allianz.

 

[scagnt83]

I like the codex or comex rating (something like that) which combines all the rating together, 100 being the best??

Half the carriers don't even know their Comdex rating because nobody asks about it. The only company that seems to care about that rating is NorthWestern Mutual.. Obviously there may be more I'm not stating that as fact, but it's the only one I've run into..

Comdex is the best way to judge a companies ratings.

And if a company has a Comdex score, they certainly know what it is! (they might not want to advertise it though)


Comdex is a composite score based on the ratings received by ALL rating companies that have rated that carrier.

All rating agencies use a different grading scale. Comdex simplifies things by taking a cumulative look at the ratings.

Its based on a 1-100 scale and the score is actually a percentile.
It basically tells you what percentile a companies financial ratings are in.
As an example, a 95 would mean that 95% of all other rated companies have worse ratings than that particular carrier.
- - - - - - - - - - - - - - - - - -

Not all the A rated companies have features that accomplish what the client is trying to do.

It is extremely extremely rare that you cant find what you need with an A rated company. I would love to hear an example or two...
- - - - - - - - - - - - - - - - - -

Many agents keep a blind eye to anything happening in the market and just look at the AM Best rating, but many don't know that AM Best is a rating company that carriers have to pay to get rated by. And they only rate about 40% of the insurance companies out there. On the other hand you have Weiss Ratings which is a non-profit who rate 70% of the carriers out there.

Most all rating agencies charge a fee.

Weiss is the only rating agency out there that I know of that does not charge a fee to rate the company.

The problem with just going off of one rating is that each agency has their own guidelines for what they consider strong.
Surplus, revenue, losses, etc, are all weighted differently depending on which company is looking at them.

This is why the Comdex rating is so important.
(I am also big on surplus size)
- - - - - - - - - - - - - - - - - -

You should see how many securities guys write Liberty Bankers for their 1st yr rates even though the company is B-..

Thats because LB is one of the few companies out there with very short surrender periods available.

They also market very heavily to the wirehouses and stock brokers.

Stock brokers like short surrenders so that they can park the funds short term, and throw them back into the market again later.

And of course the shorter the investment horizon the more risk you can take when it comes to financial ratings.


If that same stock broker was looking at a single stock or bond to put a major portion of that clients assets into for a long period of time; you can bet that it will have a very strong financial rating!!

 

[TRSecurity]

I came across the Income Rider from Security Benefit Life Insurance Company. 10% bonus, 8.2% rollup.

Has anyone used this rider or even this company for indexed products? I have not, and appreciate any opinions based on experience.