Annuity Spotlight for June 2012
Genworth Financial Updates Annuity Suitability Profile
Based on feedback from the field, Genworth Financial has made changes to the Annuity Suitability Profile to improve the suitability review process for you and your clients. Most significantly, the Replacement section now itemizes information on the replacement contract. Please click here to read the bulletin in full, or click here to access the new form, for use immediately.
To assist you with completion of the Suitability Profile, Genworth now also offers a Producer's Guide to Suitability. The guide provides tips on providing appropriate information, as well as clarification on why certain information is requested.
American National Introduces Enhanced Death Benefit Rider
Enhanced Death Benefit Rider, available on the Strategy 7 and Strategy 10 Fixed Index Annuity Products, will increase the benefit paid on the death of the owner by a specific percentage of the annuity value, less the adjusted premium. The percentage will depend on the owner's age at the time of issue. This rider is available only at issue and can be dropped at any time. Click herefor the answers to many frequently asked questions.
Genworth Financial Offers New Features Comparison Tool
The new Annuity Features Comparison Tool has been designed to allow you to quickly compare Genworth's SecureLiving Index 7 and Index 10 Plus product features to the products of many common competitors. The Features Comparison Tool allows you to: make better comparisons against more competitors, create customized side-by-side comparisons, and generate and print PDF files for documentation purposes. Click here to read more about this exciting new tool!
Avoid Returned Applications
... Completed all required, product specific annuity training?
... Correctly completed all suitability questions?
... Pulled all of the required forms?
When in doubt, call the Annuity Center!
Best of Fixed Annuities Snapshot
Click here to enlarge. Updated as of 6/1/2012.
Women Are A Key Market for
Single Premium Immediate Annuities
It's no secret that women feel less prepared for retirement than their male counterparts. A recent survey by the ING Retirement Research Institute examines the realities women encounter when saving and preparing for retirement, and underscores that women are significantly less prepared for retirement than men.
The study also found that mothers face unique hurdles when building their retirement nest egg. While the income gap between men and women is shrinking, mothers tend to spend more time out of the workforce because of child rearing and care-giving responsibilities. This reduces their earnings and savings potential and lowers Social Security benefits. Women also have a longer life expectancy than men, and there is a greater chance that married women will outlive their spouses. The combination of living longer and earning less puts women at particular risk of outliving their retirement income.
Single Premium Immediate Annuities (SPIAs) are a great fit for women looking for guaranteed retirement income that lasts as long as they do. According to LIMRA, women already purchase the majority of immediate annuities, at 53%. The average age of an immediate fixed annuity purchaser is 70.5 years, with a household income of less than $75,000. Women clients tend to have a comfort level with guaranteed products. They are looking for long-term security in retirement, and often appreciate the simplicity that a SPIA offers. Many of today's SPIA products also offer liquidity features and flexibility, keeping options open for when unexpected expenses arise.
There are several key life events which provide opportunities to offer a SPIA:
- When someone close to her retires. Here, the conversation will frequently turn to retirement lifestyle. Are your clients' retirement dreams properly funded? Is their retirement income guaranteed?
- Upon death of a spouse. Suddenly, your client's retirement plans change. Her late husband may have been in charge of handling the retirement portfolio. Maybe her deceased spouse's pension plan offers a lump sum payout that can be placed into a SPIA that offers better options. The death of a spouse is an important time during which to advise your client.
- When an inheritance or settlement is received. It's not uncommon to receive a settlement upon retirement. It could be an accumulated "paid time off" balance that the company pays at retirement, or severance from a company that is downsizing. An inheritance is also a good opportunity to talk about long term retirement planning strategies.
- When tax issues arise. The income from a SPIA is taxable as part interest and part principal. If the conservation of principal is either not important or an obstacle to generating adequate retirement income, a SPIA may be a good alternative.
For your female clients who are in or nearing retirement, SPIA products offer a winning combination of guaranteed income, flexibility, and liquidity that can't be beat.
|In the Market
White Paper: The Daily Roll Up Income Protection and Daily Benefit Base Growth
The recent economic downturn and slow recovery have had a significant impact on Americans' plans for retirement. Workers have changed their expectations about when they will retire, and according to the Employee Benefit Research Institute (EBRI), 50% of all current retirees left the labor force earlier than expected. Most often the early departure was due to unforeseen or unplanned events, such as health problems, a debilitating injury, or company downsizing. Research shows that, in half of all cases, the timing of retirement is likely to be beyond your client's control.
Today's typical fixed indexed annuity (FIA) product is designed to optimize income at a specific date in the future, often 10 years from purchase, with the addition of an optional guaranteed lifetime withdrawal benefit rider at an additional cost. Unfortunately, the majority of these riders credit growth to the benefit base on an annual basis and may not optimize retirement income for those clients who retire unexpectedly, and prematurely, less than 10 years into the future.
Given the EBRI's findings regarding the unpredictable nature of retirement dates, clients may be better served by income riders which credit growth to the benefit base on a daily basis.
Genworth's SecureLiving Index Annuities are among a select few fixed indexed annuities whose optional income rider credits growth to the benefit base daily. As a result, SecureLiving Index Annuities help optimize the guaranteed retirement income of all clients, including the 50% leaving the work force sooner than expected.
For additional information as well as a case study, click here to read the white paper in its entirety.
Going Broke Safely Save Your Clients From a Failed Strategy
In years past, "Get Rich Quickly" was the mantra of many clients who experienced amazing returns on short-term equity investments. In the end, many of those clients ended up with dramatic losses.
Today a new investment pattern has emerged. "Going Broke Safely" refers to clients keeping most or all of their money "safely" in the bank - in the form of CDs, savings accounts, or money markets earning returns lower than 1%. While there is safety of principal behind those investments, two critical factors steadily erode that buying power: taxes and inflation.
As of September 2011, the latest rate of inflation was 3.9% annually. Ignoring taxes completely, that rate of inflation alone will erode your clients' purchasing power by more than half over 20 years.
A Better Option
Fortunately, both fixed and fixed index annuities offer the same protection of principal, but often with higher rates and added benefits such as Death Benefit protection or income guarantees.
A Rising Rate Environment
According to a recent survey by Rassmussen, a full 50% of Americans believe that interest rates will be higher in the upcoming year. One of the best ways to take advantage of rising rates is with the Interest Rate Benchmark Strategy (IRB) from ING. The Interest Rate Benchmark strategy is the only crediting method in the industry that is specifically designed to perform in a rising rate environment. It is linked to the 3-month LIBOR rate, which has increased over 100% since its all-time low of 0.25% in August 2011. Also, this strategy has a cap rate of 10%!
There is tremendous opportunity now to help your clients take advantage of the rising LIBOR rate. Want to learn more?
New agents can earn up to $600 from North American Company! North American Company offers some of the most attractive annuity products in the industry. As a thank you for contracting, North American is offering a Welcome Bonus to new agents, up to $600.
Click on the link to see the promotional flyer
The Annuity Center Website
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.
Contact our Annuity Center for additional information!
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