Which VA's?

Dec 31, 2008 12:09 am

Which VA companies are you going to add or drop this year?

  I wrote a decent amount with ING over 2008, but due to their product changes, I can't see why I would write them anymore.   Prudential and JNL are both keeping their products the same, if not enhancing them.  I've done a couple Pru contracts, did $250k today, and no JNL so far.   I haven't really looked at many others, but know that Hartford, AXA, and Pac Life among others are toning down their features.
Dec 31, 2008 12:16 am

I got a call from my JNL Internal that changes are coming 1-12-2009. 

Dec 31, 2008 1:20 am

TransAmerica hasn’t changed too much (should be going into effect sometime in January).   On the GMWBs they’re downgrading joint-life payouts from 5/6/7% to 4.5/5.5/6.5%, but the overall cost has decreased by 15bp (now 75bp). (looks more like a pension plan now)

Single life, I think it’s a 15bp increase (75bp total) on the GMWB, but still the same 5/6/7 payout.   


Dec 31, 2008 2:35 am

[quote=snaggletooth]Which VA companies are you going to add or drop this year?

  I wrote a decent amount with ING over 2008, but due to their product changes, I can't see why I would write them anymore.   Prudential and JNL are both keeping their products the same, if not enhancing them.  I've done a couple Pru contracts, did $250k today, and no JNL so far.   I haven't really looked at many others, but know that Hartford, AXA, and Pac Life among others are toning down their features.[/quote]

If I do any VA's at all, it'll be JNL. I don't feel like learning another product.
Dec 31, 2008 4:47 am

[quote=Mike Damone]

I got a call from my JNL Internal that changes are coming 1-12-2009. 

[/quote]   I got a call too.  The JNL guy said they are allowing withdrawals to start at 4% for age 45+.  He said the 7% and quarterly lock-in will remain the same.
Dec 31, 2008 6:48 am

[quote=snaggletooth]Which VA companies are you going to add or drop this year?

  I wrote a decent amount with ING over 2008, but due to their product changes, I can't see why I would write them anymore.   Prudential and JNL are both keeping their products the same, if not enhancing them.  I've done a couple Pru contracts, did $250k today, and no JNL so far.   I haven't really looked at many others, but know that Hartford, AXA, and Pac Life among others are toning down their features.[/quote]   Hey Snaggle,   Which Prudential product do you use?
Dec 31, 2008 5:36 pm

[quote=ChrisVarick]

Hey Snaggle,   Which Prudential product do you use?[/quote]   Apex II HD 7
Dec 31, 2008 6:19 pm

[quote=snaggletooth][quote=ChrisVarick]

Hey Snaggle,   Which Prudential product do you use?[/quote]   Apex II HD 7[/quote]   Have you ever used their .35 bps GMAB (capital protector) rider? It SOUNDS really good, but I'm wondering if there's a catch. 5% dollar for dollar withdraws, annual step ups, principal protected every 10 years.
Jan 1, 2009 1:08 am

What JNL rider is good for lifetime income? Lifegard Freedom? I was talking to the Nationwide rep and he was 'splaining this rider, seemed decent:

Guaranteed growth, up to 100% (you are guaranteed that your income benefit base will increase by 10% simple interest annually for 10 years, or until you take your first withdrawal, whichever is sooner; if you don't take withdrawals for 10 years, this is a guaranteed 100% increase) 
Jan 1, 2009 5:56 am

I’m thinking of campaigning with Allianz’s Target Date Retirement benefit.

It’s a seven-year product.  They get to specify asset allocation and it gets more conservative as time goes on… however, at the end of the seven year time frame client can still be 70/30 equity/FI.

Here’s the kicker… over the seven year time frame, the client gets the highest anniversary date value… and its a WALK AWAY.  No annuitization, no withdrawal benefit, no income benefit.  They can just walk with the highest anniversary cash.

Jan 1, 2009 1:04 pm

Sounds good for accumulating but not so much for drawing income right away.

Jan 1, 2009 7:43 pm
etj4588:

I’m thinking of campaigning with Allianz’s Target Date Retirement benefit.

It’s a seven-year product.  They get to specify asset allocation and it gets more conservative as time goes on… however, at the end of the seven year time frame client can still be 70/30 equity/FI.

Here’s the kicker… over the seven year time frame, the client gets the highest anniversary date value… and its a WALK AWAY.  No annuitization, no withdrawal benefit, no income benefit.  They can just walk with the highest anniversary cash.

  Very interesting. How much does it cost? In year 1 can I go 100% equity and they gradually reduce it by 5% a year until it hits 70/30? Or you're saying it CAN be 70/30 equity, but it CAN also be lower (up to their discretion).   It sounds very good, but I honestly don't like VA companies that exercise investment control. They claim that it's for the client's benefits (we don't want you going too aggressive in a volatile market). Well with that said, when the market dropped -40% this year, these insurance companies allocated the account value into fixed income portfolios locking in the losses. I'm totally sure it's the the client's best interest and not for the insurance company's way to hedge against the massive step ups to the income/withdraw bases right?
Jan 2, 2009 4:10 am

From what I understand so far you start out at around 90/10 and a certain percentage gets moved over to FI each year, but you get to choose which funds.  They have a few balanced funds in their FI section that allows for more overall equity in the allocation.  Winding up in the 7th year with still a 70/30 allocation.  Not bad IMO.

Not sure on overall ME, but the rider is like 65bp I think.  After this market, I think this rider is perfect for a “recovery plan” pitch.

Jan 2, 2009 4:13 am

[quote=Gordon Gekko]Sounds good for accumulating but not so much for drawing income right away.[/quote]

Yes definitely not for income now.  But what about all of those folks that got decimated in mutual funds this year?  I think this can really be a savior… assuming, of course, nothing bad goes with Allianz.

Jan 2, 2009 4:34 pm
etj4588:

[quote=Gordon Gekko]Sounds good for accumulating but not so much for drawing income right away.[/quote]

Yes definitely not for income now.  But what about all of those folks that got decimated in mutual funds this year?  I think this can really be a savior… assuming, of course, nothing bad goes with Allianz.

  That's an oxymoronic statement.
Jan 2, 2009 10:39 pm

I use Ohio National, smaller company, good fund choices, nice benefits

Jan 2, 2009 11:54 pm

I have found VA’s are only good for a select few clients. They cost the most, they are the hardest to understand, they have the longest lockups (I realize you can buy a no load) - I don’t think I’ll be doing as many going forward. That being said, I want to know what’s out there. I have heard of that Ohio National one.

Jan 3, 2009 12:53 am
Borker Boy:

[quote=etj4588] [quote=Gordon Gekko]Sounds good for accumulating but not so much for drawing income right away.[/quote]

Yes definitely not for income now.  But what about all of those folks that got decimated in mutual funds this year?  I think this can really be a savior… assuming, of course, nothing bad goes with Allianz.

  That's an oxymoronic statement.[/quote]

How so?  From what I understand, Allianz is one of the better insurance companies out there.  Very little exposure to the sub-prime mess (less than 1/10 of 1%) and small exposure to credit derivatives.

Have I missed some news on Allianz?
Jan 3, 2009 12:58 am

[quote=Gordon Gekko]I have found VA’s are only good for a select few clients. They cost the most, they are the hardest to understand, they have the longest lockups (I realize you can buy a no load) - I don’t think I’ll be doing as many going forward. That being said, I want to know what’s out there. I have heard of that Ohio National one.[/quote]

Ohio National is a solid firm, I’ve used them before. 

I agree that VAs are not for everyone, however, EVERY one of my VA clients is happy right now.  None of my other clients are.

After 8 years of this game, I’m coming to realize that it’s not what you do in good times that counts, but how well you protect them in bad times.  Yes, VAs can be tricky.  Yes they can be expensive.  But in the end, clients want you to protect them from loss… and living benefits can help.

Jan 3, 2009 1:54 am

not sure what allianz problems he/she is referring to, but i have stayed away from them due to their huge business in the equity indexed market.  

Jan 3, 2009 4:26 pm

I would say that clients who understand what exactly is guaranteed are happy, that seems to be a smaller % than I would like.

Jan 3, 2009 7:59 pm

VAs are expensive, complicated and most people hate the idea.

I use them as a portion of the income part of my portfolio. Tack on the income benefit and death benefit (5-6% annually) and that is better than any type of bond you can find, because as long as it's under $100K its guaranteed(per company if they were to fail). And then if you get a little upside some years great.   I don't know of any other way for clients who didn't save enough to live on what they did... ie Guy making $75K retires... no pention, ss is $15K/year, and then a 401K with $1 million.. how do you make sure that guy can get $60K out of that without using some type of annuity?
Jan 3, 2009 8:30 pm

Use a reverse mortgage for tax-free income and have a life insurance policy in place to pay off the accumulated debt at death.

  Refinance the reverse mortgage for the accumulated interest tax-deduction and convert part of their qualified money to a Roth IRA for more tax-free income.
Jan 3, 2009 9:11 pm

The cost of owning a VA with a living and db would be 4% per year so you are definitely going to use the insurance. I have never done a bonus VA as I don't like the 9 year lock up.

I posted here as I wanted to get out of the Wachovia/Wells Fargo circus and wanted to discuss something else. It's funny- when you leave WS you don't really care what the retention is.
Jan 3, 2009 11:24 pm

Has anyone heard of an FDIC insured annuity?  A prospect said that someone had pitched it to them.  Could they be talking instead of some structured product?

Jan 6, 2009 8:50 pm

For what it’s worth, the Pru VA is being enhanced in February.  Now the minimum issue age is 45 as opposed to 55 and the 7% income growth goes for 25 years…so that’s 600% guaranteed growth of income. 

Jan 7, 2009 2:34 am

imabroker,

I’ve seen the FDIC insured structured products, but never FDIC VAs

Jan 7, 2009 3:44 pm

Beware of insurers who are not raising benefit rider expenses, in this climate it’s a must for hedging reinsurance blocks on future business.

Jan 10, 2009 2:05 am

Heard the Prudential daily step up deal today and was impressed. I asked how they were able to do it when everyone else pales in comparison. Their ability to move your client to fixed as a stop loss seemed to be the answer.

This would seem to blow what I am using out of the water. The wholesaler did say if you need income right away then Met was decent as it let you take 6% versus their 5%. However the daily market step plus I think he called it the stacking (7% daily rise in the income base if Mr. Market sucks) seemed almost too good to be true.    
Jan 22, 2009 4:34 pm

ALLIANZ

  I am campaigning right now using the Target Date rider for 45+ and clients love it.  Someone said that their VA clients are happy and their others are not... I would agree with that.  VA's can be expensive and complicated, but are clearly worth it for a portion of a clients portfolio.    I am still trying to learn Allianz income rider at this point, but it sounds great so far as well. 
Feb 9, 2009 4:34 am

I did a few of the Pac Life with the Foundation 10 towards the end of the year. At National City, we were limited to only a few, and it was definitely the best of the bunch, but the eliminated the Foundation 10.

Feb 19, 2009 7:18 pm

I’m doing a case right now for a client that potentially needs income now.  The JNL Future Guard 6 is a very nice VA option.

Feb 19, 2009 11:54 pm

Isn't that a 5% for life income benefit with quarterly steps if the market (ha ha) does better? 

  Watching the insurer stocks today, looked like Allianz was faring the best. Hartford and Lincoln were acting like they are going out of biz before we see March.