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Annuity Spotlight for January 2012
 

Special Announcement

 

The Annuity Center is Proud to Announce A New Website

 

The DAI Annuity Center has rolled-out a new website with improved functionality and a brand new design. 

This new website has all of the same comprehensive information that you were accustomed to in our former site however, within this new site you will find easier navigation, search function capability, less scrolling requirements and much more!  

 

Visit the new home page regularly for updated news, events, important information and highlights!  In the new Carrier Section you will find all product guides, rates, state approvals and forms, etc. that you need for each carrier.   Visit the new Marketing & Sales and Education & Compliance sections for sales ideas, educational materials and more. 

 

Visit our Annuity Center to register. Or locate the link in the Resources section of our website (www.dworkin.com). 

Contact our Annuity Center for additional information!

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What's New 

 

Additional States Adopt NAIC Suitability Model 

 The following states adopted the same or similar requirements to the NAIC's new Model Suitability rule on January 1, 2012:   

       AL:

January 1, 2012

MN:

January 1, 2012

       CA:

January 1, 2012

IL:

January 1, 2012

       HI:

January 1, 201

KY:

January 1, 2012

       IN:

January 1, 2012

 

 

Connecticut is scheduled to adopt requirements on February 18, 2012.

       CT:

February 18, 2012

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.  Product specific training - by each Carrier - will also be required. 

 

PRIOR to taking an application, please make sure
you have fulfilled both requirements.

 

 

Notice on Product Specific Annuity Training 


As each state adopts the NAIC Suitability model, product specific

training will be required - for each carrier you are contracted with - before an application may be taken.  

If you write business in any of the following states, you must complete product specific training for each Carrier before an application may be taken:  AL, CA, CO, CT, DC, HI, IA, IL, IN, KY, MD, MN, ND, OH, OK, OR, RI, SC, TX, WI, WV.  

 

If a submitted application is dated before the required product training has been completed, the application can not be processed and will be returned by the home office.  In this environment of falling interest rates, failure to complete product specific training in a timely manner may affect your clients ability to lock in a stated rate before rates fall again.  

All states will be adopting the NAIC suitability model at some point in the future and will require product specific training.  Please check frequently to see if your state has been added to the list.   Please do not delay!  Complete your required, carrier specific product training today.

 

North American Announces Improvements to Income Pay Rider 


Effective immediately, North American has increased the Bonus Credit rate on their "Income Pay" Rider, an optional Guaranteed Lifetime Withdrawal Benefit Rider.  Details are below, or click here to see the complete announcement.
incomepay
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What's Hot

 

Best of Fixed Annuities Snapshot 

 

 

Click here to enlarge.  Updated as of 1/10/2012.


Green Starburst

   

 You can earn up to a 20% BONUS on your earned commissions!

 Exclusively through DAI.  Contact us for Details

  

 

 

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In the Market

 

What's on Tap for 2012?

 

Interest rates are at an all time low, and American's retirement plans are still suffering the ravages of a down market.  Unemployment remains high and financial markets rather sluggish.  For advisors, however, there is still room for optimism in 2012!

1.  Fixed Indexed Annuities (FIAs) are becoming more investor friendly.  With shorter surrender periods, higher caps, and living benefit guarantees, it is features more than rates that are helping to drive FIA sales.  Clients are willing to pay extra for lifetime income guarantees, and that bodes well for the FIA marketplace.

2.  SPIA volume will continue to grow.  The average age for a SPIA purchaser is now 73 years.  Seniors are getting the message that SPIAs are a viable retirement planning tool.  As more boomers retire and seek guaranteed income, SPIAs funded with qualified money will continue to grow as well.

3.  Additional Carriers are entering the FIA market.  More players in the game generally translates into more competitive products.  New entrants are a welcome addition.

4.  Suitability standards will become more stringent.  As part of a focus on consumer safety, carriers have been cracking down on suitability issues.  There is no reason to expect 2012 to be any different.

5.  Use of a trusted advisor will help boomers retire more confidently!   According to a study done by Harris Interactive, 48% of workers who use an advisor believe they are saving enough money to retire comfortable, compared to only 25% of workers who do not use an advisor.  The study also found that:

  • Workers who do not use an advisor are significantly more likely to indicate they have not planned for retirement (28%) than workers who do use an advisor (11%).  
  • Of those who do use an advisor, nearly 2/3 have worked with that advisor to establish goals for their financial security.
  • Around 50% of employees who work with an advisor have created a plan to help achieve their financial goals.

People don't always know they need a financial advisor, but if they have one, they are more confident about their financial future.  Get your name out there and make 2012 your best year yet!  

 

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Sales Ideas

 

Guaranteed Income AND Flexiblity - Your Client Can Have It All! 

 

Genworth Financial knows that even the best laid plans can change.  For unexpected retirement income needs, Genworth Financial's SecureLiving Fixed Immediate Annuity offers both Guaranteed Lifetime Income and flexible access to funds.  

 

The SecureLiving Provider offers guaranteed income payments -- with the flexibility to advance payments or make a lump sum withdrawal, should your client need it.  These two unique liquidity features allow your client to maintain control over unexpected future income needs, while helping provide the peace of mind that their day-to-day income needs are met.

 

INCOME ADVANCE FEATURE:  Allows the client to receive up to 12 months of future income payments before they are due to be paid.  Automatically included in all eligible contracts at no cost.  Read more.

 

INCOME WITHDRAWAL OPTION:  (optional commutation feature)

Allows the client to withdrawal a larger portion of their future guaranteed income in a lump sum.  There is no up-front charge for this option, but the client must elect it on the application to have access to this feature in the future.  Read more.

 

Check out an example of how these two unique Income Options can help your client with those unexpected expenses.      

 

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Let's Explore

 

Avoiding Mistakes in Required Minimum Distributions (RMDs)

 

Tax deferred earnings are not indefinite for anyone.  Inevitably, each of your clients will reach age 70 �, the age at which they are required to start taking Required Minimum Distributions (RMDs) from qualified retirement vehicles and individual retirement accounts. 

The penalties for failing to take RMDs are costly.  Below are four common issues relating to RMDs to help you navigate the waters.   When in doubt, always consult a trusted tax professional. 


RULE #1:  Combine RMDs carefully

If your client has multiple retirement accounts, they are allowed to combine and withdrawal the multiple RMDs from one account.  Not all combinations are permitted, however, and it is important to know which are allowed. 

  

Permitted: Your client may combine RMD amounts for like plans with the same owner.  Click here for examples. 

 

Not Permitted: Your client may not combine RMD amounts for different types of retirement plans.  Click here for examples.  

 

RULE #2:  RMD amounts are not rollover eligible 

Amounts taken as RMDs may not be rolled over to an IRA or other eligible retirement plan, and may not be converted into a Roth IRA.  If your client rolls over or converts their RMD amount, it will be treated as an excess contribution and will be subject to taxes and penalties.    

  

RULE #3:  Death or Divorce do not change the calculation

If your client was married on January 1 of the year for which the calculation is being done, they are treated as married for the entire year.  Any divorce or death which occurs later that year will not affect the current year's calculations.   

 

RULE #4: IRA Custodians are required to notify your client

Each year the custodian of your client's Traditional IRA, SEP, or SIMPLE IRA must send an RMD notification.  The notification is sent by January 31 of the year for which the RMD applies, and may include the RMD amount.  Some custodians will only inform your client that an RMD is due, and offer to calculate the amount upon request.

 

 

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