Rates & Bonuses Going Up AGAIN!
Just another sign that annuities really do not fall victim to the same financial problems that every other financial sector has been experiencing off and on since the crash of 2008. With market volatility at an all-time high, and bank failures happening more often than we would like, insurance assets are still performing at higher levels than ever before. And, just this week we saw bonuses, index crediting rates, and even commissions increase AGAIN.
Your clients may ask how insurance companies keep getting stronger for clients’ investments, while securities and banks continue to struggle.
Here’s what I tell my clients…
Insurance companies are not at the mercy of market shifts like banks and securities companies, because insurance companies carry zero debt. 100% of every annuity and life insurance policy is completely backed up by assets fully owned by the insurance company. Whereas banks and securities companies operate with huge debt or margins—meaning that they only have enough assets to backup a small portion of their clients’ financial accounts. So when market volatility increases, or markets fall, banks and securities companies have to lower rates and become more cautious with sharing profits. Insurance companies do not. In fact—because insurance companies are cash-rich—they can actually be MORE aggressive during some market shifts.
Want more talking points to help close more sales? Call us at 800-200-9194
Do You REALLY Want to Put it in Writing?
Be careful what you email, print, or text your clients about any financial work you are doing for them. There have been cases where an adviser has emailed—or texted—information about annuity rates, income payouts, and other performance details, and the client later claimed that they were given guaranteed details in writing by their adviser. So be sure to double check any details you are going to put in writing when giving clients information. Also, be careful not to create any custom spreadsheets or calculations showing financial numbers or projections. Only use carrier generated illustrations and approved materials when giving clients information. The carriers are careful to be sure that anything they generate in writing is guaranteed, and it puts all liability on them and not you. If you ever have a question, just give us a call.
21.92% Average Annual Return!
There is a 3-Year Point-to-Point crediting strategy available that back-tests at over 20% annual return over the last decade (source: IndexAlyzer 7/7/2023). But, be careful and make sure your client is fully comfortable with a 3-year crediting term. Many clients become anxious within the first year or two, and would not be comfortable waiting 36 months to see how well their assets may have grown. But there are 1-year & 2-year strategies that back-test with double-digit returns too. Give us a call and we can find the best fit.
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~ Greg Skogsberg