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Annuity News for June 2011
 
What's New 

 

AVIVA - States Adopt CE Requirements

 

Two states - South Carolina and West Virginia- have adopted the same or similar requirements to the NAIC's new Model Suitability Rule.  NAIC training is being rolled out to WV agents (effective 7/1/2011) and SC agents (effective 9/25/2011). 

The rule requires all insurance producers selling or soliciting annuity products to obtain a four-hour continuing education course from an
approved vendor.  This is a one-time requirement and is not a condition of license renewal.

 
 
As a reminder, the effective date for Rhode Island agents is 6/1/2011, and the effective date for Washington DC agents is 6/24/2011. 
 

For additional detail, please click here.

 

North American - Announces New Death Benefit Riders 

 

North American announced their new Guaranteed Minimum Death Benefit Rider (GMDB),available for sale June 6, 2011. 

The GMDB Rider will provide your client with peace of mind by providing their heirs with an
enhanced death benefit, regardless of market performance.

 

Summary of Benefits

Available for Issue Ages 0 - 75

5% Bonus Credit in Years 1-10 , 6% Bonus Credit thereafter
Annual Charge:  0.90% times your Accumulation Value.

 
Can be used in conjunction with the Income Pay (GMWB) Rider.

 

To learn more about this exciting new rider, check out the Marketing Brochure and Disclosure form.

 

NOTE:  Agents must complete the GMDB Rider certification module prior to selling the new rider.  NACOLH will offer a web training session featuring the rider on Thursday June 23, at 10:00 am, Central Time.

 

Click here to register for the web training session!

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What's Hot

 

Best of Fixed Annuities Snapshot  

 

Click here to enlarge.  Updated as of 6/7/2011.

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Sales Ideas

 

Leaving a Million Dollar Legacy

 

About Gary

Gary is 50yo and is his family's primary wage earner.  He wants to make sure his wife and kids are well taken care of when he dies, so he purchases a permanent life insurance policy.  But he wants to keep the annual premium manageable, and he doesn't want to pay for premiums once he is in retirement.

 

Income Strategy

1.  Gary purchases a $1,000,000 Symetra Financial Universal Life Insurance policy, intending to pay the $11,219 annual premium from his income and savings for the next 15 years. 

2.  Gary also purchases a $74,367 Freedom Income Annuity, which will pay the annual Universal Life premiums starting at his Age 65.


 
The Result

    If Gary dies early, his wife is left with a $1,000,000 legacy. 

    If he lives into old age, Gary has the peace of mind that his Freedom Income Annuity will continue to make his Universal Life premium payments for the rest of his life, leaving his legacy intact.

 

Total Cost

Here's what the $1,000,000 legacy costs Gary:


15 Years  x  $11,219  =  $ 168,285
   1 Year   x  $74,367  =  $  74,367  
               Total Cost  =  $ 242,652

 

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In the Market

  

Required Minimum Distributions: Turning Details into Opportunities
 

This article originally appeared in the May edition of the Agents Sales Journal,
Written by Laura Hahn (Managing Director of our Annuity Center)

I remember very early on in my insurance career hearing a sales person say: "Get the money first and straighten out the details later." Being the type of person that believes the money is in the details, I struggled with this thought process then, and I still do today.  I am one of those detail-oriented people that can drive some of you, simply put, nuts!

But paying attention to the details pays off. One detail of an annuity contract that can offer opportunity is required minimum distributions - or, being an industry of acronyms and abbreviations, the dreaded "RMDs."

 

RMDs: The Details

 

Tax-deferred earnings are not indefinite for anyone.  Individuals in qualified retirement vehicles, including most individual retirement accounts, eventually have to take required minimum distributions from their applicable accounts annually.

 

Typically, the very last day for taking the first RMD is April 1 of the year following the year in which the account owner reaches age 70�.

 

If taking the first distribution on April 1, the account owner must also consider that the second distribution must be taken by December 31 of the same year, thus having two RMDs in the same tax year.

 

If the account owner overlooks, forgets or doesn't take an RMD he or she will pay a significant 50 percent tax penalty on the amount that should have been withdrawn.

 

There are several other rules and/or exceptions concerning RMDs that can further complicate understanding them and avoiding a 50 percent penalty mistake. A trusted tax advisor should also always be consulted.

 

Seeking opportunity     So where's the opportunity? Read on.

 

While many of us may have entered this business as a way to earn a living or pay our bills - or perhaps even by complete accident - we stay for a reason. From talking to people in this business for over 33 years now, I believe that reason goes well beyond "getting the money."  We stay because of the feeling we get when we fulfill our obligation to serve our clients by making a difference in their life. Long after the commission check has been cashed (probably today used to fill up our car with gas to get to the office), the feeling we get from making a financial difference in someone's life will still be around. It's the fuel that keeps us going when the paperwork, changing regulations and, yes, even when those details get us down. 

 

Earlier, I revealed that I've been in this industry for 33 years. Perhaps you have, too. (Of course, we both started when we were 8.)  How many clients do you have now?  How many of those are nearing 70�?  Dust off those files and look through them.  Who did you help 5 years, 10 years, or maybe even longer ago with their retirement planning?  What qualified money did they have?  Did you sell them an annuity with qualified money?  RMDs impact those, too. 

 

Get your facts together, educate yourself and then pick up the phone for a courtesy call.  Remind them of the required minimum distribution guidelines.  Tell them about their options.  Ask them what more you can help them with.  By the way, this courtesy call is a great opportunity to ask them about the kids.  How old are they now?  If Mom or Dad is reaching 70�, I would bet their kids could be in their mid to late 40s, and should be thinking about their own retirement plans. You just proved your value by potentially saving their parents a 50 percent penalty.  Couldn't that help secure the kids as clients, too, and also their friends or perhaps the kids of Mom and Dad's 70-year-old friends?  You know how that referral thing works, right?  There is money in those detail hills!

 

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Let's Explore


Starting the Traditional Fixed Annuity Conversation

 

Yep, that's right.  You can have interesting and lucrative conversations with your clients on the topic of Fixed Annuities.  These flyers from American General are customizable and versatile.  Get that conversation started and watch your sales soar!

 
Try these "Opening Lines" with your clients and proceed with confidence!    You can use this collection of conversation starters and handouts with your clients to start engaging conversations on annuities. 

 

Opening Line"Do you have CDs that are renewing at a lower rate?"

 

Customize this advertisement with your information and use
it as a newspaper ad, flyer, or envelope stuffer with your existing clients.  It's an effective lead generator for clients who are frustrated with their current CD rates.   Click here for the complete flyer.

 

Opening Line"I'd like to show you how a fixed annuity may be better than a CD for your long term goals?"

 

Many of my clients find that fixed annuities are a great alternative to CDs.  Would you like to go through a short questionnaire to see if they would be a good fit for you? Click here for the complete flyer.

 

Opening Line"Would you like to decrease the taxes you pay each year?

 

Most clients are ready to shout "YES" before you've even finished the question.  Let them know that you can work to help them by looking at their most recent form 1040.  This Agent Guide gives tips for using this Client Questionnaire.
Click here for the complete flyer.

 

Opening Line"I'd like to show you how you can save for retirement in STYLE."

 

Some styles come and go, but traditional fixed annuities are a staple for your retirement savings.  They never go out of style!  This leads to a discussion about fixed deferred annuities and their key benefits:  Safety, Tax-Deferral, Yield, Liquidity, and Estate Planning.  Click here for the complete flyer.

 

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Dworkin Associates Inc. 22 South Main Street Rochester, NH 03867