Agents who have sold Multi Year Guarantee Annuities (MYGA's) may remember the
days when it was difficult to convince a client to lock-in a seven year
guaranteed interest rate of 5.00%. Many years have passed since then and
deferred rate annuities are often viewed as too low yielding with too low of a
commission to present as an option to clients. Many older deferred annuity
contracts sit with no surrender charges, earning the minimum guarantee. The
reason is, MYGA products from the past had high minimum guarantees compared to
new money MYGA rates of today. Forever minimum guarantees of 3.00% and higher
were very common. The minimum guarantees are the strongest guarantees in a fixed
Looking forward to 2017, the expected upward momentum of interest rates makes
this a perfect time to get reacquainted with fixed rate annuities. An increase
of just 25% on the top fixed rates currently available could rejuvenate the MYGA
marketplace big time. Imagine the ability to offer a client the guaranteed rate
of 4.00% for five years! A five year yield of 21.67% would be double 2015 rates
from most carriers!
As rates rise additional ways to help clients maximize yield could include:
Review existing clients current fixed rates, caps and spreads.
Using the free withdrawal provision to transfer to a higher guaranteed
Shorter term MYGA's such as 1 and 2 year may become available again.
Top quality A+ rated carriers will have rates of more than 3.00% again!
MYGA's keep it simple and guaranteed for risk averse clients:
A guaranteed fixed interest rate that matches the surrender period.
Clients know exactly how much their premium will grow to.
No surprises or misunderstood assumptions just the guarantees as offered at
Waiver and free withdrawals including nursing home and terminal illness
Tax deferred growth and compounding!
MYGA Rates range from 3-20 year guarantee periods | Request
a MYGA quote
Single Premium Immediate Annuities (SPIA) - Get More Lifetime Income NOW! When
Guaranteed Not Potential Income Matters!
Clients in need of immediate
and guaranteed income can
use insurance. The Immediate Annuity payment is a return of principal and
interest which maximizes the payout percentage. Combined with its lower
commission and loads, the SPIA cannot be beat by any other insurance product for
immediate guaranteed income!
Where else can a person use such a large percentage of their nest egg annually
and know they can never
run out. Recent lifetime payout percentages quoted include, 4.00%
for a 27 year old female to 18.30% for an 85 year old male. Based on a $500,000
premium that is $20,000 annually for the 27 year old and $91,500 for the male
Immediate Annuities For Income Analysis!
An SPIA can also help a client determine the value of a pension income verses a
lump sum distribution. We recently reviewed the value of a pension payment of
$16,500 per month or a lump sum of $3,130,000. Long story short, if the pension
wanted to buy a SPIA to match the income of $16,500 it would cost them
$4,408,219. The $3,130,000 lump sum would produce an income of $13,136 through a
SPIA, that is only 80% of the pension. The pension has a very stable outlook so
makes sense for the client to strongly consider the pension payout over the lump
Immediate Annuities Income For Qualified Planning
Working with an agent who has a client that has $1,000,000 in an IRA and is now
beginning their RMD. The client wants to leave money to his beneficiaries and is
looking at his options. Using
an FIA and
taking RMDs annually looks like this:
Selected Period 1/1/1998 - 01/01/2017 (20 Years) RMD
income paid over 20 years = $947,295 / Accumulation value = $581,633
ZERO 0% Interest Period (20 Years) RMD
income paid over 20 years = $740,342 / Accumulation value = $329,034
Favorable Period 1/1/1991 - 01/01/2000 (10 Years) RMD
income paid over 20 years = $450,687 / Accumulation value = $920,210
Unfavorable Period 1/1/2000 - 01/01/2009 (10 Years) RMD
income paid over 20 years = $418,217 / Accumulation value = $822,663
Best case is $920,210 and worst case $329,034 of IRA
money to the beneficiaries.
Quite a spread there and does not give the most warm fuzzy feeling. NOW,
look at a SPIA funding Life Insurance:
100% Joint and Survivor SPIA with 10 year certain gives
the client an income of $5,119.07 per month. If client is at 35% tax rate
the tax is $1,791.67 leaving $3,227.40 per month of Non
Qualified money to buy
A second to die life policy for
$1,000,000 cost $1,800 per month or $21,594 annually. This leaves still
leaves $17,134 annually of now Non
Qualified money to
reinvest, spend or whatever!
Highest Lifetime Income NOW - Guaranteed No Assumptions!
Allows Use Of Larger Annual Percentage Of Nest Egg Without Ever Running Out!
Nursing Home Income Enhancements
Inflation Protection Through COLA or CPI Increases
Deferred Starts For Longevity (DIA) (QLAC)
Up to 5.00% Commission on A+ Rated Carrier
Commutable Options or Lock In As Non Assignable
NEED A SPIA Quote? Click Here!
Clients who are completely or partially risk averse with their savings should be
presented old school traditional fixed annuities known as Multi
Year Guarantee Annuities (MYGA)
Premium Immediate Annuities (SPIA).
Clients who have not been shown these options are not getting a true fiduciary
spread of financial insurance products available in the marketplace today.
Is a client asking for a portion of their funds to be guaranteed? The MYGA and
SPIA are two insurance products built exactly for that purpose!
Jeff Affronti - Marketing, illustrating, studying and selling fixed
annuities since 1995.
Thinking about a using a Fixed Rate Annuity? Get MYGA
contracting, illustrations, case design assistance and more. | Call 800-373-9697
www.fsdfinancial.com | www.SPIAquote.com |
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