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Reply to Congressional Scrutiny on Annuity Compensation Practices     
Old 04-28-2015, 11:43 PM   #1
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Congressional Scrutiny on Annuity Compensation Practices Congressional Scrutiny on Annuity Compensation Practices
Warren probes insurers' sales incentives for annuities - LA Times
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Old 04-29-2015, 12:47 AM   #2
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Congressional Scrutiny on Annuity Compensation Practices Re: Congressional Scrutiny on Annuity Compensation Practices
I've never cared about the 'perks'. I'll buy my own toys, if I want them.

I've always looked at these as an incentive to place annuity cases with that particular insurance company... as long as it was going to be an annuity case anyway.

For me, this one is a non-issue.

Then again, it's probably looked at in a similar light as mutual fund wholesalers offering "marketing support" too - as a way to sway the broker to recommend their funds over a competitors. I remember an issue when American Express Financial Advisors had sales incentives for advisors to sell their proprietary funds over others... and that created issues too.
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Old 04-29-2015, 10:13 AM   #3
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Congressional Scrutiny on Annuity Compensation Practices Re: Congressional Scrutiny on Annuity Compensation Practices scagnt83 is the thread starter for: Congressional Scrutiny on Annuity Compensation Practices

Senator Warren investigates rewards offered to 'annuities dealers' advising retirees | LifeHealthPro

Here is the LifeHealthPro article about it. It even has a link to the letter she sent.

I dont get into the perks either. But they are there. If you produce and qualify for a trip most agents are going to take the trip if they have the time. Its not like they give you the option of cash in lieu of the trip. If an agent is just 1 sale away from a trip to Hawaii, which carrier do you think that next sale is going to be placed with??

Its a non-issue in your sales. But not in the annuity industry as a whole.

I actually agree that incentives such as trips and whatnot can & do influence recommendations by advisors. But so does comp... some dont admit that but its the truth. Historically in the IA market, some of the highest comp products (to both the agent & IMO) have been the most popular products pushed by advisors and the IMOs.

Imo, right now is a terrible time to put someone in an income product. A HUGE case could be made against GLWBs/SPIAs/DIAs right now if a persons income horizon is over 3 years. Heck, even if it is immediate a sound case could be made against them. Same goes for Annuties over a 6-8 year surrender period. But still 80%+ of sales are a 10y product with a GLWB Rider attached.

If comp was the same for a 10y product and a 7y product which do you think agents would sell more of assuming they both have competitive rates?
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Old 04-29-2015, 10:26 AM   #4
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Congressional Scrutiny on Annuity Compensation Practices Re: Congressional Scrutiny on Annuity Compensation Practices
I just want to know who will send me to Oahu for $165,000 in premium.

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Old 04-29-2015, 10:40 AM   #5
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Congressional Scrutiny on Annuity Compensation Practices Re: Congressional Scrutiny on Annuity Compensation Practices
Originally Posted by scagnt83 View Post
If comp was the same for a 10y product and a 7y product which do you think agents would sell more of assuming they both have competitive rates?
That's one reason why I work with ANICO versus some of the other carriers.

ANICO doesn't have a single annuity over a 10 year surrender period. When I compared compensation with (my) Midland National contract, it was the same as their 14 year surrender products.

In addition, the maximum issue ages with ANICO were age 80, while Midland was age 65.

And the compensation is the same:
- Midland's 14 yr = ANICO 10 year.
- Midland's 10 yr = ANICO 7 year.

Now I know Midland has some production bonuses as you increase production over time and I could probably get a better contract if I went 'direct', but as I look at the product design, maximum issue ages, and other factors... since compensation was about equal... I'll stick with ANICO.

Oh, and ANICO doesn't appear to 'over-engineer' their products as Midland/NA seems to do. They have lots of index segment choices that seem to confuse me, let alone a potential client. That's a personal observation, but I prefer to keep things as simple as possible.
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Old 04-29-2015, 09:02 PM   #6
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Originally Posted by VolAgent View Post
I just want to know who will send me to Oahu for $165,000 in premium.
In annuity Premium?!

Wish in One Hand Life & Annuity Co...

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Originally Posted by DHK View Post
That's one reason why I work with ANICO versus some of the other carriers.

ANICO doesn't have a single annuity over a 10 year surrender period. When I compared compensation with (my) Midland National contract, it was the same as their 14 year surrender products.

In addition, the maximum issue ages with ANICO were age 80, while Midland was age 65.

And the compensation is the same:
- Midland's 14 yr = ANICO 10 year.
- Midland's 10 yr = ANICO 7 year.

Now I know Midland has some production bonuses as you increase production over time and I could probably get a better contract if I went 'direct', but as I look at the product design, maximum issue ages, and other factors... since compensation was about equal... I'll stick with ANICO.

Oh, and ANICO doesn't appear to 'over-engineer' their products as Midland/NA seems to do. They have lots of index segment choices that seem to confuse me, let alone a potential client. That's a personal observation, but I prefer to keep things as simple as possible.

Your in Kali, so things are not an apples to apples comparison...

Midland has about 9 different 10 year annuities. They range in comp from 5%-8%.

They have I think 9 different annuities in the 4-8 year range. They range in comp from 3%-6%.

There are 4 different 10 year Midland products that pay 7%, which is what I think Anico's 10 year product pays if Im not mistaken.

All of those comp numbers are the normal base comp, no expense grid.


IDK why you would go through an IMO for Midland. That makes no sense at all my friend...


But Anico does have some of the best P2P caps right now. That was not the case 1-2 years ago.
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Old 04-30-2015, 09:08 AM   #7
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Congressional Scrutiny on Annuity Compensation Practices Re: Congressional Scrutiny on Annuity Compensation Practices
Originally Posted by scagnt83 View Post
In annuity Premium?!

Wish in One Hand Life & Annuity Co...
Hey, that is what the article said.

I'm sure they meant compensation, but the way it was written implied premium.

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Old 05-13-2015, 02:06 PM   #8
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Congressional Scrutiny on Annuity Compensation Practices Re: Congressional Scrutiny on Annuity Compensation Practices
ProducersWeb - Annuities - IRI responds to Sen. Warren's investigation into industry's annuity sales practices
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