Annuity product
discontinuations and immediate annuities!Annuity Agent Journal News - Archive
Fixed Annuity agent articles of FSD FINANCIAL SERVICES
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The
FSD Fixed Annuity Journal And Interest Rate Review |
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June 2003 |
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Annuity Review
(PDF Format) A variety of sales ideas, product discussions/comparisons and miscellaneous thoughts. THE PERFECT STORM In the movie, if you remember, conditions were such that all aspects came together at the right time and the right place to produce a rare and historical event. We are entering a "perfect storm" scenario in the immediate annuity business. I say this because if you look at this market many aspects are coming together to present a "perfect opportunity". Consider these facts: 1. The fastest growing market in America is the baby boomer market. The part of the US population over 55 will grow from 59 million people to 75 million by 2010. 2. About 23% will need to work to provide needed income. 3. The number one concern regarding retirement is not outliving their money. 4. Over $7 trillion has been lost in the last 5 years. 5. Immediate annuity sales have doubled in the last 5 years. 6. Investors now realize that guarantees are very important in retirement. Putting all these factors together opens up a fantastic opportunity to help retirees and make a good sale. Even publications that in the past were negative on SPIA’s have come to realize that these products help and are valuable tools to generate income. Most SPIA’s are sold through agents. This is a great opportunity to sell a much needed product to a growing population base. We at FSD and myself personally (after all, they do call me Mr. SPIA), would be happy to help you learn this market. With low deferred rates and reduced commissions, the SPIA area is going to become an agent’s best friend (it already is the clients). Visit our website at www.fsdfinancial.com and click on Mr. SPIA. We have much more information and statistics regarding SPIA’s. Don’t delay lest someone else provide this information to your clients. Call us with any questions or for a quote. We are here to help you sell. By the way if you have not seen the movie, do, it is fantastic. S ingle Premium Immediate Annuity Features And Uses
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Monthly Journal June 2003 |
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June
2003 Annuity Journal
"ANNUITY PRODUCTS ON THE CHOPPING BLOCK" Rates are still dropping. Lincoln Benefits Savers Choice will no longer be available starting 7/1/03 . Savers choice is a 5 year product with tiered interest, amounts over $50,000 have a minimum guarantee of 3.50%. (see spreadsheet inside for details) The BONUS 555 from F&G Life has been my favorite product for quite sometime. On 7/1/03 it will no longer be available! A 10 year minimum guarantee of 4.71%, NO MVA, declining surrender, withdraw all accumulated interest at anytime, full death benefit and a 4.00% commission. It does not get any better than this. Agents, buy the 555 for yourselves like I did, and with the commission the minimum yield is 5.10% after 10 years."IT'S TIME TO SELL EQUITY INDEXED" The lower interest environment has made Equity Indexed Annuities a must see product. We have EIAs with terms from 6 to 10 years and 3% minimum guarantees. Today's Indexed Annuities also offer a fixed side, so as interest rates rise the fixed option can be selected to maximize a client's yield. Be in the market with a guaranteed gain. EIAs have free withdrawal provisions, simple to understand crediting methods and great commission. All of the "UP'S" none of the (down's)! Indexed Annuities to look at: F&G's Index Rewards - 100% of the S&P, Annual Reset & Lock-In, 3% minimum on 100%, 6% Cap (contract minimum cap 5%) 7% Commission Jefferson Pilot's Route 810 - 100% of the S&P, 2 Year Reset & Lock-In, 2% minimum on 100%, 15% Cap, 6% Commission & A++ Rated |
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Page 2 |
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Companies Finding Their Niche Inside A Specific Rating Categories As companies ratings have been increasingly looked at as a selling or sticking point in an annuity sale. Most companies we deal with do not have the name recognition of an Allstate or Met Life. So, how do you convince a client that a company they have never heard of will be around in the years to come? Most companies have a detailed brochure on their financial stability, length of time in business and a breakdown of assets. I would suggest that if your client is interested in only highly rated carriers stick with A+ or better. You will want to explain to the client that higher rated a carriers usually have lower yields. Some annuity companies have found their niche in a certain rating. What this seems to mean is they want to be the most competitive company in a certain rating category. This give the company the flexibility to have higher interest rates than a company with a higher rating and a similar product. So, next time you are worried about that A rated company, take a closer look and see how long and why they are rated that way! |
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