Who Has the Most Leinant Suitabillity?

[Golfnut2112]

Who are you to change the client's priorities?

If the client wants lifetime income, and the current annuity has surrender charges, then the best choice is to annuitize the existing contract.

Unless you're going to change the client's objectives, your point is moot.

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Every annuity that is set up for lifetime income is ILLIQUID. Whether it's an annuitized annuity or a quasi-annuitized annuity (lifetime benefit riders).

You keep bringing up liquidity. That wasn't our job and that's not what the OP is asking about.

The OP never said lifetime income just that she wanted an income rider ( which probably meant I need a monthly check). I have yet to find one person that wants to lose control of their money for an monthly income check when other options are available. I was not changing her priorities, there are just better options out there but a security license is needed, which I assume you don't have.

 

[DHK]

???

Nobody wants a rider (feature). They want the BENEFITS of what the rider provides. Riders provide a "step up" in the income base, and then a lifetime income. However, since it's assumed that it is an IRA (or other qualified plan) because of the discussion of RMD's, there won't be much time for a step-up of the income base. That leaves the lifetime income benefit... that is already built-in to every annuity out there.

And every Lifetime Income Benefit Rider is really an "unbundled" method of annuitization, in order to keep the benefits that the rider provides.

Think about it: In order to have your lifetime income rider, you have to give up access to the lump sum of cash.
- If you withdraw past the allowed amount, your benefit is recalculated.
- If you withdraw past the 10% free withdrawal amount, you have a surrender charge on the amount past 10%

This describes practically ALL annuities.

Now here's the difference: If you truly annuitize a contract, IN GENERAL, you cannot access the lump sum if you needed to. An annuity with a lifetime income benefit CAN access the lump sum if necessary. But you'll give up the benefits under the rider to do so.

As far as "better options"... that may be true, but you'd still have to justify the liquidation charge of 4.5%.

I still wouldn't touch it... and I definitely wouldn't touch it if I had securities licenses and a B/D compliance officer.

 

[Golfnut2112]

???

Nobody wants a rider (feature). They want the BENEFITS of what the rider provides. Riders provide a "step up" in the income base, and then a lifetime income. However, since it's assumed that it is an IRA (or other qualified plan) because of the discussion of RMD's, there won't be much time for a step-up of the income base. That leaves the lifetime income benefit... that is already built-in to every annuity out there.

And every Lifetime Income Benefit Rider is really an "unbundled" method of annuitization, in order to keep the benefits that the rider provides.

Think about it: In order to have your lifetime income rider, you have to give up access to the lump sum of cash.
- If you withdraw past the allowed amount, your benefit is recalculated.
- If you withdraw past the 10% free withdrawal amount, you have a surrender charge on the amount past 10%

This describes practically ALL annuities.

Now here's the difference: If you truly annuitize a contract, IN GENERAL, you cannot access the lump sum if you needed to. An annuity with a lifetime income benefit CAN access the lump sum if necessary. But you'll give up the benefits under the rider to do so.

As far as "better options"... that may be true, but you'd still have to justify the liquidation charge of 4.5%.

I still wouldn't touch it... and I definitely wouldn't touch it if I had securities licenses and a B/D compliance officer.

If you read my previous post I stated there is no way she should cash out and pay 4.5%.

 

[scagnt83]

The OP insinuated that the client is worried about RMDs. Very rarely does a client ASK for an income rider. They are usually sold an income rider.

I would guess, based on the OPs comments, that the client asked what she should do about the RMDs and the OP immediately started looking at creating a lifetime income with these assets since that is many agents answer to RMDs.

It is very likely that the client has 10% free withdrawals. Even if she doesnt most annuities wave Surrender Charges for RMDs. I would guess that the OP is trying to fix something that is not necessarily broken and is just a part of having Qualified Funds.

 

[DHK]

If you read my previous post I stated there is no way she should cash out and pay 4.5%.

Yes, you do say that... but you also keep talking about "other options available" and getting a securities license.

Any "other options available" would still require the payment of the 4.5% surrender charge, except annuitizing the existing contract. (Or as scagnt83 stated is to find out if the contract has 10% withdrawal feature available &/or taking out RMD's without surrender charges.)

In short, keep the money where it is.

 

[Golfnut2112]

Yes, you do say that... but you also keep talking about "other options available" and getting a securities license.

Any "other options available" would still require the payment of the 4.5% surrender charge, except annuitizing the existing contract. (Or as scagnt83 stated is to find out if the contract has 10% withdrawal feature available &/or taking out RMD's without surrender charges.)

In short, keep the money where it is.

THAT'S WHAT I SAID!!!!! You need to improve your reading skills every time you respond you misquote or don't understand what I said whether its the 4.5% surrender charge of changing the clients objectives you get it half a $$ backwards. Go back to my first post where I recommened not to annuitize but take systematic withdrawls until the surrender charge period is OVER then reevaluate the situation. How did you assume I was changing the client's priorities or recommending surrendering and taking the 4.5 penalty?

 

[Norwayguy]

THAT'S WHAT I SAID!!!!! You need to improve your reading skills every time you respond you misquote or don't understand what I said whether its the 4.5 surrender charge of changing the clients objectives you get it half a $$ backwards. Go back to my first post where I recommened not to annuitize but take systematic withdrawls until the surrender charge period is OVER then reevaluate the situation. How did you assume I was changing the client's priorities or recommending surrendering and taking the 4.5 penalty?

Speaking of going back and rereading.... anyone notice the lack if posts from the OP lately?

 

[Golfnut2112]

Speaking of going back and rereading.... anyone notice the lack if posts from the OP lately?

Yeah I know, he probably thinks were nuts!! Lol

 

[DHK]

I just love agreeing with someone in a disagreeable way! lol

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I probably misunderstood your intended timing of offering additional solutions with securities licensing.

In my mind, I was thinking that you were saying "you could offer your client more options today if you had securities licensing".

What you were really saying was to be better prepared to serve your client with more options when the money was available without a surrender charge.

You were right - I misunderstood your intended timing of such recommendations.

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Adding a simple line about waiting until the surrender charge schedule expires would've helped with understanding your post.

 

[Golfnut2112]

I just love agreeing with someone in a disagreeable way! lol

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I probably misunderstood your intended timing of offering additional solutions with securities licensing.

In my mind, I was thinking that you were saying "you could offer your client more options today if you had securities licensing".

What you were really saying was to be better prepared to serve your client with more options when the money was available without a surrender charge.



Im sorry about that I always post on my pad and dont go into much detail.

I wonder what the OP did