Fixed Annuities
In light of the recent AIG hubbub, our firm has reason to get back into the fixed annuity business (we have clients who want out of Aig Retirement, but want to stay with fixed annuities).
Seeing as we have not done much independent business in the fixed annuity world, I hoped you all could provide some feedback as to which companies you’ve had good experiences with, and what products you’re using.
Some features I’m looking for are:
1. Short cdsc: 3 to 5 years
2. 10% annual free out
3. RMD friendly
4. Fed/State tax with-holding friendly (some companies won’t do state for some reason)
5. Electronic forms!
I’ve been using ING, Hartford, and New York Life this last week, but none of them have all the features I’m looking for. Thanks!
Take a look at JNL.
Take a look at Mass Mutual.
How are NYL's rates these days?In light of the recent AIG hubbub, our firm has reason to get back into the fixed annuity business (we have clients who want out of Aig Retirement, but want to stay with fixed annuities).
Seeing as we have not done much independent business in the fixed annuity world, I hoped you all could provide some feedback as to which companies you’ve had good experiences with, and what products you’re using.
Some features I’m looking for are:
1. Short cdsc: 3 to 5 years
2. 10% annual free out
3. RMD friendly
4. Fed/State tax with-holding friendly (some companies won’t do state for some reason)
5. Electronic forms!
I’ve been using ING, Hartford, and New York Life this last week, but none of them have all the features I’m looking for. Thanks!
NYL’s 5 year is currently at 4.6. Not the greatest around, but they are the highest rated by Moody’s and Fitch that I’ve seen, which is something a few of my clients care more about recently.
Mass Mutual’s fixed looks pretty bad. Their 5 year has an “enhanced” rate of 4.75. When I asked what “enhanced” meant, they said it’s only for year 1. Year 2 drops to 3.75, and after that it’s the pool rate, not to drop below 2%.
Just if anyone’s interested, Metlife released their Fixed annuity numbers the other day
5 year: 5.80%
3 year: 4.60%
I wouldn’t believe it till I called and confirmed today.
Here’s a dumb question - why not buy a CD and forget all the red tape? You can get 5% ish on an FDIC insured CD. You get paid next to nothing is already taken as a response.
It depends. The fixed annuity is tax-deferred. Other than that, I would ask the same question. Something else to consider: I believe fixed annuities are held in the insurance company's general account, which is accessible to creditors.Here’s a dumb question - why not buy a CD and forget all the red tape? You can get 5% ish on an FDIC insured CD. You get paid next to nothing is already taken as a response.
It depends. The fixed annuity is tax-deferred. Other than that, I would ask the same question. Something else to consider: I believe fixed annuities are held in the insurance company's general account, which is accessible to creditors. [/quote] I too, have thought about this myself. After doing the math, years of tax deferrals with a high income tax bracket would make the client a lot more money. However, you are correct snaggle, the fixed annuity is held in the general account. I think most insurance companies pay 2-3% commission on their fixed annuities, which isn't much considering you put them into a 5 year FA...[quote=Gordon Gekko]Here’s a dumb question - why not buy a CD and forget all the red tape? You can get 5% ish on an FDIC insured CD. You get paid next to nothing is already taken as a response.
With respect to MassMutual, their “enhanced rate” is 6.25% first year, 4.75% second year (base), from thereafter it ranges from 3.5-4.5% depending on when it was purchased.
It depends. The fixed annuity is tax-deferred. Other than that, I would ask the same question. Something else to consider: I believe fixed annuities are held in the insurance company's general account, which is accessible to creditors. [/quote] All the more reason to choose a mutual company with good ratings. A fixed annuity has some advantages that a CD would not (assuming it is taxable money): Tax-deferral Creditor-protected for the client Avoids probate at death[quote=Gordon Gekko]Here’s a dumb question - why not buy a CD and forget all the red tape? You can get 5% ish on an FDIC insured CD. You get paid next to nothing is already taken as a response.
It’s not that hard to set up a TOD account at the bank. And you get step-up.
principal guarantee...even if you surrender early. unlike a cd if you surrender early that may cause a reduction in principal.Here’s a dumb question - why not buy a CD and forget all the red tape? You can get 5% ish on an FDIC insured CD. You get paid next to nothing is already taken as a response.
You can add on to a FA which is not always the case (if ever) with a CD. Granted you add on at whatever the current rate is, its still an added advantage.
Include that with the tax deffered growth, ability to add bene's, and withdraw up to 15% each year w/o penalty - well its a no brainer.[quote=gvf] Just if anyone’s interested, Metlife released their Fixed annuity numbers the other day
5 year: 5.80%
3 year: 4.60%
I wouldn’t believe it till I called and confirmed today. [/quote]
That was a nice rate, locked in a couple of those.
Anyone willing to take a change with AIG fixed(actually American General) but same idea.
5 year 5.00% fixed
Wow, has this dynamic changed since GG wrote this back in mid-October...I compared a 5-yr CD at 3.5% to a 6-yr JNL fixed that starts at 4.85% and has a 3% floor and it's a no-brainer when tax-deferral is considered. Better yet, the lady I set this up for today made a charity the primary beneficiary, so any interest she doesn't take is tax-free to the charity at death. For the first time in awhile, traditional fixed annuities look very attractive when compared to just about any other fixed income option available. Sure, you can get more coupon, but you're probably taking a fair amount more risk to get there. I was doing a fair number of munis but within the last two weeks, those rates have come down quite a bit, especially on the short end (less than 7 years). My question for the rest of you is, aside from JNL which I know well, what are the best rates you are seeing out there that (1) are not with troubled insurers, (2) pay me reasonably and (3) are 7 years or less to surrender?Here’s a dumb question - why not buy a CD and forget all the red tape? You can get 5% ish on an FDIC insured CD. You get paid next to nothing is already taken as a response.
Wow, has this dynamic changed since GG wrote this back in mid-October...I compared a 5-yr CD at 3.5% to a 6-yr JNL fixed that starts at 4.85% and has a 3% floor and it's a no-brainer when tax-deferral is considered. Better yet, the lady I set this up for today made a charity the primary beneficiary, so any interest she doesn't take is tax-free to the charity at death. For the first time in awhile, traditional fixed annuities look very attractive when compared to just about any other fixed income option available. Sure, you can get more coupon, but you're probably taking a fair amount more risk to get there. I was doing a fair number of munis but within the last two weeks, those rates have come down quite a bit, especially on the short end (less than 7 years). My question for the rest of you is, aside from JNL which I know well, what are the best rates you are seeing out there that (1) are not with troubled insurers, (2) pay me reasonably and (3) are 7 years or less to surrender?[/quote] Look at the picks of the week from research. We like the fact that the rates are fixed, no surprises to client.[quote=Gordon Gekko]Here’s a dumb question - why not buy a CD and forget all the red tape? You can get 5% ish on an FDIC insured CD. You get paid next to nothing is already taken as a response.
MET , American General(yeah I know), and Allianz(Dominator)
Thanks, Nog for making me feel stupid…
...and I see Allianz Dominator is on the list...good stuff...Is that sarcasm?
Nope…Allianz just quoted me 4.9% fixed for 5 years on 100K…that’s probably who I’m using here. Used Jackson on the last one because the client was over 85.
Ok.. yeah 4.70 then 4.8 for 25K, and 4.9 for 100K...5 year guaranteed rate.. good deal.. not what met was offering 2 months ago, but maybe they will bring that back..
I work for a wholesaler of dozens of fixed annuity carriers. PM me and I can have one of our internal wholesalers call to answer any questions.
Since fixed annuities are becoming more popular as replacements for low-rate CDs, here’s a nice link if your clients have questions about how safe their fixed (or indexed) annuity is…
http://www.safemoneyplaces.com/guaranty.htmWould that be the higher rate CDs or the medium-high rate CD's that are better than the low-rate ones????Since CDs are becoming more popular as replacements for low-rate CDs
Would that be the higher rate CDs or the medium-high rate CD's that are better than the low-rate ones????[/quote] ...you got me on that one...it should have said "Since fixed annuities are becoming more popular as replacements for low-rate CDs..." The point was to post a nice independent link that showed how guaranty associations operate to make fixed annuities a pretty safe place to invest. If you are pitching fixed or indexed annuities, it's a nice link to show your clients and prospects.[quote=Indyone]Since CDs are becoming more popular as replacements for low-rate CDs
I’m liking the Dominator Plus annuity, but it has a 10 year surrender. You do have a 30-day window after the 5year GIR period to surrender for free, but if you miss that window, you’re SOL.
Just found this link today…not anyone I’m affiliated with, but they’ve got a ton of annuity rate information.
(link removed) Allianz is pretty good at 3 years with 3.5%, but for anyone looking to get the magic 5%, American National shows 5% for 6 years if you have 100K. Less than that is 4.90%...still pretty good. Note: After some thought, I pulled the link out. I don't want to do some DIY-er's homework for him/her. PM me if you are interested in the link. If your posts here give me some level of comfort that you are in the industry, I'll gladly share the link.[quote=Indyone]Just found this link today…not anyone I’m affiliated with, but they’ve got a ton of annuity rate information.
(link removed) Allianz is pretty good at 3 years with 3.5%, but for anyone looking to get the magic 5%, American National shows 5% for 6 years if you have 100K. Less than that is 4.90%...still pretty good. Note: After some thought, I pulled the link out. I don't want to do some DIY-er's homework for him/her. PM me if you are interested in the link.[/quote]What's the commish on the 3 year?
Allianz 3 year would be Dominator Select which isn’t approved by LPL yet. Pays 1.5%
[quote=etj4588]Allianz 3 year would be Dominator Select which isn’t approved by LPL yet. Pays 1.5%[/quote]
I’d do it if it were a slam dunk sale.
I’ve printed off some information in the past from the safe money website for my evening reading material. There’s some really good stuff there.
It just about gets me fired up enough to go independent and sell nothing but annuties. Can you imagine how easy it would be to sell against big brokerage and the evil stock market right now? Hmmmm......... Here's another good one: retirerx.comYeah...it's approved, but the guy I talked to couldn't tell me what the commisson was...he's supposed to call back.Allianz 3 year would be Dominator Select which isn’t approved by LPL yet. Pays 1.5%
Huh, just got off the phone with the guy at Allianz. Said, Select wasn’t approved, where are you seeing that?
Here's the breakdown on commission: 1 yr GIR: .35% 2 yr GIR: .75% 3 yr GIR: 1.5% to the grid.…wouldn’t be the first time I’ve gotten two different answers from the same place. Some guy named Beau at Allianz said LPL had approved but that he couldn’t tell me for sure what the commission was since LPL pays more than general agents. LPL’s annuity ops guy told me that he thought it was approved, but he’d have to call me back with the actual commish rates. He told me that they would also post those to the web.
My guess is that your guy is closer to right than mine, but I believe that we'll see the product approved quickly and commission info posted. 3 years at 3.50% or 3.65% for jumbos when compared to CDs IS a slam dunk. My guess is, I can sell a ton of this stuff given the crappy current CD rates. Hank, American National's 5-year (5.05, then 4.05 in years 2-5 - 4.25% average) pays 5% up to age 80. That still beats the crap out of CDs and should be an easy sell. If you get in a competitive situation, their 6-year pays 4.9% or 5% for jumbos, but "only" nets you 3. That's still a nice, easy ticket and is a real win-win.[quote=etj4588]Huh, just got off the phone with the guy at Allianz. Said, Select wasn’t approved, where are you seeing that?
Here's the breakdown on commission: 1 yr GIR: .35% 2 yr GIR: .75% 3 yr GIR: 1.5% to the grid.[/quote]What grid?
[quote=Indyone]…wouldn’t be the first time I’ve gotten two different answers from the same place. Some guy named Beau at Allianz said LPL had approved but that he couldn’t tell me for sure what the commission was since LPL pays more than general agents. LPL’s annuity ops guy told me that he thought it was approved, but he’d have to call me back with the actual commish rates. He told me that they would also post those to the web.
My guess is that your guy is closer to right than mine, but I believe that we'll see the product approved quickly and commission info posted. 3 years at 3.50% or 3.65% for jumbos when compared to CDs IS a slam dunk. My guess is, I can sell a ton of this stuff given the crappy current CD rates. Hank, American National's 5-year (5.05, then 4.05 in years 2-5 - 4.25% average) pays 5% up to age 80. That still beats the crap out of CDs and should be an easy sell. If you get in a competitive situation, their 6-year pays 4.9% or 5% for jumbos, but "only" nets you 3. That's still a nice, easy ticket and is a real win-win.[/quote]I'll work for 3% all day long. These are big tickets.
[quote=Borker Boy]I’ve printed off some information in the past from the safe money website for my evening reading material. There’s some really good stuff there.
It just about gets me fired up enough to go independent and sell nothing but annuties. Can you imagine how easy it would be to sell against big brokerage and the evil stock market right now? Hmmmm......... Here's another good one: retirerx.com[/quote]Yes, I can imagine.
That was to Indy... LPLs grid.
What grid?
That was to Indy... LPLs grid.[/quote][quote=San Houston]
What grid?
I'm glad I decided against LPL.
your fixed stuff goes through the grid?
That was to Indy... LPLs grid.[/quote][quote=etj4588][quote=San Houston]
What grid?
I'm glad I decided against LPL.[/quote] Hank, I know where you're coming from, but after running insurance outside of LPL for awhile, I discovered how the general agent was making their money. Take the Allianz Dominator, for example. Had I ran those tickets through my general agent, I would have collected 3%. The same ticket through LPL is 4.25%. Even at 90%, that beats 3% easily. I found this to be true for every company I looked at except for producing directly through Jackson. I don't know if all B/Ds pay better than general agent's, but I know that LPL and ING do. Frankly, I was pretty pissed at my general agent when I found out how they were making their money. They'd always told me "100% payout". They just didn't tell me how much lower that payout started. If it weren't for JNL, I wouldn't sell any insurance away.
See above. If you're doesn't go through the grid, you're probably getting screwed.your fixed stuff goes through the grid?
That was to Indy... LPLs grid.[/quote][quote=San Houston] [quote=etj4588][quote=San Houston]
What grid?
I'm glad I decided against LPL.[/quote] Hank, I know where you're coming from, but after running insurance outside of LPL for awhile, I discovered how the general agent was making their money. Take the Allianz Dominator, for example. Had I ran those tickets through my general agent, I would have collected 3%. The same ticket through LPL is 4.25%. Even at 90%, that beats 3% easily. I found this to be true for every company I looked at except for producing directly through Jackson. I don't know if all B/Ds pay better than general agent's, but I know that LPL and ING do. Frankly, I was pretty pissed at my general agent when I found out how they were making their money. They'd always told me "100% payout". They just didn't tell me how much lower that payout started. If it weren't for JNL, I wouldn't sell any insurance away.[/quote] Or you could just go the deal direct route.
Read slowly...that's what I do with Jackson. Not every carrier offers that option.
That was to Indy... LPLs grid.[/quote][quote=San Houston] [quote=etj4588][quote=San Houston]
What grid?
I'm glad I decided against LPL.[/quote] Hank, I know where you're coming from, but after running insurance outside of LPL for awhile, I discovered how the general agent was making their money. Take the Allianz Dominator, for example. Had I ran those tickets through my general agent, I would have collected 3%. The same ticket through LPL is 4.25%. Even at 90%, that beats 3% easily. I found this to be true for every company I looked at except for producing directly through Jackson. I don't know if all B/Ds pay better than general agent's, but I know that LPL and ING do. Frankly, I was pretty pissed at my general agent when I found out how they were making their money. They'd always told me "100% payout". They just didn't tell me how much lower that payout started. If it weren't for JNL, I wouldn't sell any insurance away.[/quote]
Are you positive about the 4.25%? With allianz perks and marketing money, I still come out a little ahead of 4.25*0.9.
i can double check, but everything i have done (and have checked them) all give me same/better payout without going through my grid.
good point though. never assume anything!
That was to Indy... LPLs grid.[/quote][quote=Indyone][quote=San Houston] [quote=etj4588][quote=San Houston]
What grid?
I'm glad I decided against LPL.[/quote] Hank, I know where you're coming from, but after running insurance outside of LPL for awhile, I discovered how the general agent was making their money. Take the Allianz Dominator, for example. Had I ran those tickets through my general agent, I would have collected 3%. The same ticket through LPL is 4.25%. Even at 90%, that beats 3% easily. I found this to be true for every company I looked at except for producing directly through Jackson. I don't know if all B/Ds pay better than general agent's, but I know that LPL and ING do. Frankly, I was pretty pissed at my general agent when I found out how they were making their money. They'd always told me "100% payout". They just didn't tell me how much lower that payout started. If it weren't for JNL, I wouldn't sell any insurance away.[/quote]
Are you positive about the 4.25%? With allianz perks and marketing money, I still come out a little ahead of 4.25*0.9.[/quote] Yeah, I'm definite on the 4.25%...for the up to age 75 band. Then it went to 3.25 and 2.25 for the 81-85 age band. That last one really pissed me off as my general was showing only 1% compared to 2.25%. Admittedly, I'm a new producer with Allianz, but one of the guys on the fast team indicated that I'd get the perks also. The next time I talk to them, I'll try to get a clarification on that.
I get the marketing money, but what types of perks are you guys getting from the wholesalers?
Allianz Domintor just slashed rates yesterday. 3.80% to 4.00%. Down from 4.70% to 4.90%.
Actually, thy cut rates at 5pm Tuesday. American National is paying 4.90 for 6 years.
On our platform the AIG name is being converted to Western National. Yes !!!
That was to Indy... LPLs grid.[/quote][quote=San Houston] [quote=etj4588][quote=San Houston]
What grid?
I'm glad I decided against LPL.[/quote] Hank, I know where you're coming from, but after running insurance outside of LPL for awhile, I discovered how the general agent was making their money. Take the Allianz Dominator, for example. Had I ran those tickets through my general agent, I would have collected 3%. The same ticket through LPL is 4.25%. Even at 90%, that beats 3% easily. I found this to be true for every company I looked at except for producing directly through Jackson. I don't know if all B/Ds pay better than general agent's, but I know that LPL and ING do. Frankly, I was pretty pissed at my general agent when I found out how they were making their money. They'd always told me "100% payout". They just didn't tell me how much lower that payout started. If it weren't for JNL, I wouldn't sell any insurance away.[/quote]
Actually, LPL is a VERY rare bd that passes through 100% of what your general agent was making plus 100% of the bonus. They act as their own general agent, making it easy to do what your GA used to.
You do need some background on how comp and the override are structured though. the comp you were getting is 100% of producer level comp. Every carrier divides it into producer and GA levels. Anyone operating above the producer level has production minimums that start at about 5-10 million of annual premium to keep, and the minimums go up as the comp and bonus do. In this day and age, carriers are strictly reinforcing their production minimums. To get the .25% bonus that LPL is passing through to you, you would have to be doing 50 million or above.
Anybody having success with the fixed annuities? Rates keep falling
Squash, I'm still selling them like hotcakes to savers.Anybody having success with the fixed annuities? Rates keep falling
Who are you using? 3/5/7year?
There are a few EIA’s with decent rates right now
I've only been selling 5 year MYGA contracts, no mva, 100% Principal Protection.Who are you using? 3/5/7year?
[quote=Squash1]Who are you using? 3/5/7year?
I’ve only been selling 5 year MYGA contracts, no mva, 100% Principal Protection.[/quote]
Are you calling new prospects are just existing clients?
Chief123, 90% of the fixed annuity sales were from cold calling strangers. The other 10% were sales to my existing book.
That has to be some nice production. do you find the 5 yr rates are better than what they can get at the banks
Squash, I work in a Credit Union. Our 5 year CD pays a sliver more than the 5 year MYGA contracts but these people are willing to take a slightly smaller yield for the flexibility of free 10% withdrawals of contract value.
I actually have some rates that are going up…American General next week… Cds in my area are around 2% vs 3.5 for fixed annuity… Not a bad time to call and pick up so easy money.
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