ANNUITIES 101

Here's a quick way to review your annuity business and find some new revenue.  The annuity review concept is called ARM and it revolves around the idea that your existing deferred annuity clients have only three choices - they can Annuitize, Reallocate, or Maximize - there are no other choices assuming they don't want to die with the deferred annuity subject to both income and estate tax.

Here's what we mean.  Do you have one client who owns a deferred annuity and needs income?  If so it's time to Annuitize and convert the asset to an income stream.  A 65 year old male can expect about a 6.8% income stream with a 15 year certain and life annuity that guarantees full return of principal.  Part of each payment is tax shielded and the yield compares very favorably with what else is currently available.  Got one of these?

Do you have one client who is just not sure when, or even if, he or she will need the deferred annuity?  Typically, the largest concern for this person is possible health care cost down the road.  We suggest he Reallocate by withdrawing interest only.  Current yield is about 3% or $15,000 assuming our 65 year old has a $500,000 deferred annuity, converting to about $10,000 after tax.  Take the $10,000 and buy a combination UL policy with an LTC rider - it will buy about a $250,000 death benefit and/or a $500,000 LTC benefit.  You preserve the $500,000 asset, provide money to more than pay the tax due at death, and provide a fund for health care, all in one transaction.  Got one of these?

Do you have one client who just really will not need the deferred annuity during his lifetime?   If so, we suggest he Maximize his return, again by annuitizing to a 15 year certain and life payout.  This time, though, use the after tax payout to buy $1,000,000 of guaranteed death benefit UL.  The IRR on the death benefit (guaranteed!) is 7.5% tax free to age 90.  Got one of these?

The ARM concept is very simply an annuity review much as you do a review on the performance of your clients' life policies.  We have the answers - you need to bring us the clients!

WHAT ELSE IS NEW?

Protective Life is going 100% brokerage.  By the end of the year the "West Coast Life" name will disappear and all product will be distributed by BGA's under the Protective name.  During the course of the year we will be recontracting you with Protective and will be distributing more information as it becomes available to us.  This is important because Protective as a very strong company with excellent ratings and very competitive products, both UL and term, using both brand names.  This is a company that "gets it" all the way from top management down to the underwriters and new business people.  We urge you to consider them for your next case.

ING just introduced a new concept we like.  Their "SOLAR" brand stands for "Self Owned Life and Retirement" and is a variation on the Section 162 Bonus plan that incorporates their ultra competitive "Global Index Plus" UL product with some very nice underwriting concessions for key employee groups (Think guaranteed issue!).  If you have a law firm, medical practice, accounting or engineering firm with a highly compensated group needing truly tax free retirement income you should be thinking SOLAR.  We will be having a webinar on the concept very soon - watch for the announcement - or just call us now!

Transamerica and Lincoln National have both introduced their "term UL" products - "Transterm UL" and "Duration Guarantee UL" respectively.  These are two new entries in the competition for term dollars from two very strong companies with excellent pricing and underwriting.  If you would like to compare either product with the term you're selling now just give us a call.

Thanks for your business always.