Should You Split the Money Across More than One Carrier?

 So, your client wants to put a LARGE amount of money into index annuities, and you get to make the sale.  Sometimes agents or clients get the idea that spreading the money across a couple of different carriers might be a good way to “diversify” and diminish any risk that a carrier might get into trouble, or that one annuity might perform better than another.  Makes sense, right?

Before you agree to make this decision to use multiple carriers and multiple annuities, be careful to consider the following:

If a transfer is involved, make sure there is a solid way to make the transfer made to both carriers BEFORE you even mention the idea of using more than one carrier to the client.

  • We have seen many cases where the transferring company refuses to make partial and/or multiple transfers, and the applications have already been filled out.
  • If the funds are coming from an IRA, and a check has to be sent to the client in order for partial amounts to be sent to different carriers, it all needs to be complete within 60 days or the client will get a 1099 on the entire IRA amount.

Remember that using two carriers means two completely different sets of illustrations, applications, and suitability rules.

  • Every difference between the two sets of forms will cause the client to ask for the reasoning, and it starts to make them feel like there is a lack of standards in the annuity industry, which makes them start to question if they should go ahead with the sale.
  • If one carrier finds a mistake on the application forms, but the other carrier doesn’t require the same information, the client will want to know why…and YOU will have to explain why.

When the first anniversary rolls around and one of the index annuities has credited more than the other, the client will wish they had put all their funds into the one that performed better…and they will blame YOU for not making that happen.

Let us help when considering spreading across multiple annuities and/or multiple companies.

It can be done, and we do handle cases like this from time to time.

But, there is a lot to consider, and a lot to do to make sure the whole case goes as well as possible.  Like, making sure the two carriers have similar suitability rules, case processing standards, and crediting rate renewal histories—just to name a few.  Give us a call, and we can help.

Should I Be Offering _______ to My Clients?

The answer is, “Yes”.  Fill in the blank with; Medicare Insurance, Health Insurance, Long Term Care, Life Settlement Shares, Disability…you name it.  If you can sell it using the insurance license you already have, why not?

You do not need to be an expert in all of these fields in order to provide them to your clients.  You simply need to be able to identify the opportunity in each of these areas, then let us help provide the expertise to get your clients the very best product in any given area they need.

For example; nearly every single client you have that turns 65 will buy a Medicare plan.  It doesn’t matter if you don’t know anything about Medicare.  Simply ask your client, “Would it be o.k. if I had our Medicare expert give you a call to answer any questions about the process, coverage, networks, cost, etc.?”  Give us a call and we will help make the sale and make sure clients don’t go to another agent.

~ Greg Skogsberg

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