I have a married couple who I sold a DI policy to that wants to start a deferred annuity. They only want to put about $70 to $100 a month into it. The wife is 51 and the husband is 47. I am very inexperienced with annuities and could use a little advice…
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I have been looking at ING, American Equity, and a few others and I cannot find anything even close to this. Does anyone offer a CD-type annuity that is worth having?
Last edited by maximas : 10-10-2009 at 07:08 PM.
Reason: Posts merged
I would start with a good fixed annuity that will allow you to start with a small monthly contribution. In cases like that I just call the wholesaler that we use and see what they have available. What company/companies do you sell for and do they offer annuities?
Xrac - I am appointed with ING, Aviva, West Coast Life, and others. The companies, I think, are not the problem... It's my general lack of knowledge of the available products that is the problem.
Padthaiforlunch - I will look into your suggestion. That is better than the $10k premium I've seen.
I think that is a problem, i dont think Aviva or Ing have anything you can start with $100 a month, not sure about the others you listed.
I think that LSW you can start with $50 a month NO initial deposit needed, and I believe American General offers a simalar product, just check some products must be Qualified with those low monthly's, which is no big deal as long as they dont all ready have.
Personaly I would consider a ROth if they meet the requirements.
I am appointed with American General, so I will see what they offer.
As far as a Roth goes, I know they do not surpass the income threshold. That said, are there any other disqualifying factors?
Originally Posted by HarryRenard
I think that is a problem, i dont think Aviva or Ing have anything you can start with $100 a month, not sure about the others you listed.
I think that LSW you can start with $50 a month NO initial deposit needed, and I believe American General offers a simalar product, just check some products must be Qualified with those low monthly's, which is no big deal as long as they dont all ready have.
Personaly I would consider a ROth if they meet the requirements.
American General recently raised their minimum monthly flex premium to $300 per month...Great American(Annuity Investors) flexmax product allows you to start with $50 per month no initial deposit, Lafayette Life allows $84 per month minimum until $1000 in the policy then no more limits on contributions, LSW I believe is $100 per month.
I am pretty sure that LSW still offers a few options for $50 a month PAC plan. And if they dont have IRA's I would talk with them about a Roth Ira, the tax free benefits could be nice and who knows they might like it enough to contribute a little extra so you can squeeze a check out of it. By the way LSW does not require an initial deposit and its pretty safe to say someone looking to save 70-100 doesnt have a bigger deposit to spend, and thats just my experince.
Are they contributing to their qualified plans through work? If yes and they qualify, definitely ROTH. If not, ask them how in the world they expect to retire on 100 bucks a month.
Yes, they are contributing to qualified plans. They wanted to start out at a hundred and once their mortgage is paid off ramp up from there. They have most of their investments in relatively aggressive funds, so they wanted to counter that with relative safety an annuity provides. They just don't have the extra cash to "properly" fund anything until they pay off their mortgage.
Originally Posted by Franz Kafka
Are they contributing to their qualified plans through work? If yes and they qualify, definitely ROTH. If not, ask them how in the world they expect to retire on 100 bucks a month.
Why do they want an annuity? Are they looking for safety, tax deferral, growth or something else?
The average lifespan is about 75 so they need their money to last for at least 30 years, right?
The first thing you have to do is calculate how much monthly income they need in retirement to meet their goals.
Then working backward you can calculate what lump sum they need to have saved by the time they retire that will generate income to supplement any retirement benefits they may have.
Once you know the lump sum they need, you can calculate the rate of return needed in the years they have left to save that lump sum.
AFTER you have calculated all that, you are ready to select a product. Selecting anything before calculating leaves you vulnerable to a lawsuit for recommending a product that didn't meet their goals. Worse yet, not even seeking to understand their goals.
It is a litigious world out there my friend and you don't want to be the reason that you clients fall short of their financial goals.
You need to make sure they understand risk and reward.
With all that being said , I like Allianz and ING but honestly many companies have decent products.
If safety is the clients #1 concern then I would look at an index annuity with no down side risk and attach an income rider to it if there intention of the money is income.
It might be just to pass on to children which in this case you would attach some bonus death benefit if available.
Deferred Annuity Question
, I like Allianz and ING but honestly many companies have decent products. 
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