1 x 5 annuity

[AnnuityGuy63]

Does anyone know of anything called a 1 x 5 using an FIA?

Atlantic coast uses their GIA with the accumulation rider to defer income the 1st year and then you can annuitize over 5 years to fund an IUL or for what ever reason, I believe this is only available in Florida. and it works better than an SPDA or MYGA since you are actually annuitizing over a 5 year period.

With no fee's and the 10% bonus plus the 1.% interest it's basically giving the client just under 3% on their money and it funds the product.

I used Atlantic Coast but THEY SUCK, try to make a withdrawal and they sit on your clients money for going on 75 days now, with excuses of still going through processing, compliance, approval- telling me they mailed out the clients funds with a tracking number that shows still waiting to be mailed and not really leaving the facility... blah blah blah. Unable to get Kip Nielsen on the phone over their to get it moving. Already filed a complaint with the state against them. I have moved almost all of my clients away from them. When a client tells me they have an annuity with them it's the easiest contract to replace as all I have to do is call them on speaker and just leave it for the length of the appointment.. after 15 or 20 minutes the client is convinced and fearful but I let them know it will take approx 8 weeks to complete.

Anyway.

I refuse to use ACL anymore for anything but am looking to replace them for this product..... anyone anyone?

 

[Life Hawk]

What is your experience with American Equity?

 

[scagnt83]

What is your experience with American Equity?

Very positive in my experience. Excellent customer service, very quick processing. Competitiveness varies on current rates, but that is normal for the annuity industry. Generally speaking they are usually pretty competitive. Ive heard their FE product was overpriced, not sure if thats still the case. I dont hesitate to do biz with them and I dont worry if transferring funds away from them.

 

[Allen Trent]

With no fee's and the 10% bonus plus the 1.% interest it's basically giving the client just under 3% on their money and it funds the product.

Are you saying that someone that puts $100k in would get 5 annual checks of about $22,400 for at total of about $112k back in from their $100k deposit plus the carrier would also have paid full commission? I just find it hard to believe this math can play out to where the carrier could make any money to issue the policy, pay the compensation, invest the money in their general fund & buy the options on the index. If it does, that might be short lived.

On the flip side, couldn’t you have the client just use the IUL carrier Premium Deposit fund. Those tend to pay pretty solid interest rates & doesnt force the irrevocable payout annuity decision a year from now.

Would you have to disclose on the suitability/best interest sections of the application that the funds are only temporarily going into the annuity & will be actually going into an IUL. That may or may not get denied by the carrier

Just conjecture on my part, you could be 100% right

 

[Life Hawk]

Ive heard their FE product was overpriced, not sure if thats still the case.

I called to ask about that a few years back on their life product. The person explained to me they don't want the life business. Their main focus is on annuities but they had to have some product in order to a viable way to sale. Made sense to me.

I second their ease of doing business. Got to be part of a red carpet tour there several years ago and was impressed. The 'old man' was still running shop at the time.

When someone ask about annuities they are on the top 2 for me. I don't chase after the lowest or highest this or that. I like stability and customer service in that area especially. Safety of Principle is my number one reason to provide annuities to my clients.

 

[Allen Trent]

Very positive in my experience. Excellent customer service, very quick processing. Competitiveness varies on current rates, but that is normal for the annuity industry. Generally speaking they are usually pretty competitive. Ive heard their FE product was overpriced, not sure if thats still the case. I dont hesitate to do biz with them and I dont worry if transferring funds away from them.

How do you or would you address the bad PR from their class action lawsuits & charges of elder abuse by several state AGs? Or is this a different American Equity?

 

[Life Hawk]

How do you or would you address the bad PR from their class action lawsuits & charges of elder abuse by several state AGs? Or is this a different American Equity?

I'll address that for you, AGENTS! That's just me thinking out loud.

 

[Allen Trent]

I'll address that for you, AGENTS! That's just me thinking out loud.

agree, but I thought most of the issues were with the 2 tiered product design, the substantially longer surrender charges (even in death claims) & much higher commissions. So the blame was as much or more on the carrier design & almost single handedly the start of much of the suitability/best interest/DOL stuff installed in the industry in recent years

Like I said, I may be mistaken, but I thought they were one of the 2 or 3 main players in that at the time

 

[Life Hawk]

You are referring to 16 yr surrender charge... and you are right on the nose on that one.

Then again, annuities by design are ment for the long haul. Yet we know how that works out. Just had a lady pull from one placed less than a year ago, guess why... if you said her dead beat kids needing money you would be right. They will soak that one dry before its over.

And yes, agents that try to stuff too much net worth into an annuity need to go back to school and learn some economics. I say that then I think of the economics they are teaching now days... no wonder we have the issues we are having!

 

[scagnt83]

How do you or would you address the bad PR from their class action lawsuits & charges of elder abuse by several state AGs? Or is this a different American Equity?

Never had it brought up before. But I would explain it was a combo of agents selling unsuitable products, and some the old products being designed in ways that were not very consumer friendly. They labeled products as being "10 years" but it took 12 or 14 years to get all of your money back... and that made people who didnt understand that upset. And many had a right to be upset because that caveat was often not properly explained by the agent, and the carrier relied on the agents to emphasize this point with the client and judge if its a suitable solution or not. Today's annuity landscape is totally different than back then with much stricter regulations that help prevent many of the negative issues experienced in that type of stuff in the past.

I then would point out the differences in the product I was showing them and the products that got into trouble back then. Im showing either a 7 or 10 year surrender, those were effectively 12-15y surrender products, etc. etc.

---

Basically it was the very long surrender products, especially the ones that required annuitization upon surrender. They would market a product as "10 years" but in reality it was a 13 or 15 year product if you include the annuitization period to get all of your money back.

Allianz got into trouble about the same thing. I forget who the 3rd big carrier was that made news. Consumers certainly didnt understand the Surrender provisions of those products.... many agents probably didnt either. I will say that the performance of those products was very good though from what I saw... many were 10%+ (never sold them but replaced some of them).

Some annuity carriers have played games with surrender charges and made it needlessly complicated. They paid a price for it. Was it elder abuse?? In my opinion the agent is the one committing elder abuse, at least at the individual level. The carrier might be accessory to that if they did not perform sufficient due diligence in judging Suitability... but the main offender in that situation is the agent. Now maybe the carrier had systematic issues that created the whole climate which (insert legal jargon) caused them to be legally liable for the entire situation. But the product was solid and gave solid returns... if the features were fully explained to the client and it was sold in a suitable situation. Its just hard for people to commit to such a long time with their money, especially during the accumulation phase, it causes issues, even if its just mental blocks of "wanting something different" despite their money performing great where its at now.

Fast forward to today, those types of products mostly do not exist anymore. The suitability process on the carrier level is entirely revamped and much more in depth. Product features are much more client friendly on all levels. Totally different market/climate now vs. then.