STOP! Immediate Annuities are NOT Always the Best Way to Get Income Now!

Click here for a short video about this month's issue
Here’s the case: 

Client wants $1,500 a month for the next 14 years. So, let’s buy a 14-year SPIA (Single Premium Immediate Annuity)…right?  Not necessarily.  The SPIA will require roughly $216K to make $1,500 a month (female, 46, non-qualified, California), and generate a 3% commission for the adviser.  Here’s an alternative…

Have the client take a withdrawal to cover the first year of monthly income ($1,500 x 12 = $18K).  Then, fund a fixed rate annuity that you can annuitize in 13 months.  Sagicor has one that pays a 4% bonus, a 2% return, and a 6% commission.  So, it takes just $184K to fund this fixed annuity—that will generate $1,500 a month for 13 years, starting after the initial $18K withdrawal is spent over the first 12 months.

Here’s the bottom line: 
  1. The client gets the same income, but uses $14K less to do it
  2. Client earns $7,600 from the 4% bonus
  3. The adviser earns $4,500 more in commission

The next time you have a case to work on. Give us a call.  Often, the most obvious solution is not actually the best one.

Clients Want to Know What I Think the Market will Do!  HELP!

Relax. You can calmly tell your clients…”It doesn’t matter”.  The stock market is so volatile and unpredictable anymore that index annuities have become insulated from the Ups & Downs.  With the volatility controlled crediting methods available today, we will see clients getting double-digit returns regardless of what the market does—even if there is HUGE correction.  So, help your clients to reduce their stress by putting the right percentage of their investable funds into index annuities.

Your Client's Index Annuity Policy Anniversary is Coming Up...How Do You Prepare?

This is a golden opportunity--if only once per year per client--to grow your business. The 'Annual Policy Review' meeting can grow your business by 20% to 50% if handled properly. One in five review meetings lead to another sale from the same client, and one in 4 leads to a referral.

The key to a successful review meeting is preparation. Take 20 to 30 minutes to review the clients' crediting method allocations, the index performance, renewal crediting rates, rider choices, and all other aspects of their existing policy. Then be prepared to offer advice on how to move forward for the coming year, and remind them what a great decision it was to invest in an index annuity. Also, print off a copy of the annual renewal letter the carrier sent to the client. You can get one from the carrier. Clients feel a sense of comfort when they see their adviser has already obtained a copy of the very same letter they received in the mail. It makes them feel as if you are ahead of the game and always looking out for their best interest, which you are.

It is a terrible mistake to attend annual review meetings unprepared.

Or, even worse, to not attend them at all. So, take some time and prepare to comfort, explain, recommend, congratulate, and sell at every annual review meeting your clients have. And, finish each client meeting by asking who they know that could also benefit from tax-deferred growth with guaranteed lifetime income benefits with no adviser fees or market risk.

Want some help preparing for—or even remembering—your client anniversaries?

Give us a call:

~ Greg Skogsberg


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