by Tom Felich Annuity Sales Consultant
Winston Churchill once wisely said, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” Even though we’re facing historically low interest rates and a volatile market, there are many reasons why fixed indexed annuities continue to grow in popularity among clients at or near retirement. At the same time, there may be sales opportunities you have yet to uncover that could dramatically increase your bottom line and provide your clients with solutions they may not have considered for achieving their retirement goals.
Did you know that the average Baby Boomer will have experienced at least 11 job changes before retiring?1 Now, think about what that could mean to your business. How many of these workers have 401(k)s from these jobs that they’re not tending to or have yet to rollover? Some of your pre-retiree clients may even currently be in the process of changing jobs. If these individuals are concerned with the performance or safety of their accounts, they could potentially enjoy greater rewards from the benefits provided by an indexed annuity by taking in-service distributions.
In-service distributions allow working individuals to transfer money from a qualified plan at age 59½ and after, and according to the Profit Sharing/401(k) Council of America, roughly 70% of qualified plans allow for in-service withdrawals. Ask your clients, “If I could take a portion of these funds and reposition them into an account that offers a portion of the market’s upside with none of the downside risk while providing you with better access to your money should you need it, would that kind of solution interest you?” By moving funds into a Secure Index annuity from ING USA Annuity & Life Insurance Co., you can help clients better address their concerns about current retirement planning challenges and overcome common objections.
WHAT IF I NEED TO ACCESS MY MONEY?
One of clients’ main fears today is locking away their money and not being able to access it should a financial need arise. With the ING Secure Index Five Annuity, clients can purchase an optional Return of Premium Rider that provides the security of knowing they will be able to access the premiums paid at any time should they need to terminate the contract for an emergency or any reason*. Clients afraid to make a decision because they fear interest rates will potentially rise in the next few years might welcome this feature. They will also be able to withdraw 10% of the accumulation value after the first contract year without penalty.
For clients who are looking to access these funds in the form of a guaranteed income in retirement, the IncomeProtector Withdrawal Benefit available on both the Secure Index Five and the Secure Index Seven might be just what they’re looking for. This rider option provides a 6% compounding roll-up for the first 10 years in addition to the flexibility to turn income on or off at any time prior to annuitization. Keep in mind that, for clients who select the Secure Index Five, the return of premium rider cannot be elected concurrently with the income rider, so it’s important that you help clients weigh all of their options and pinpoint their most critical needs.
WHAT IF I WANT TO LEAVE A LEGACY?
Some clients may have been accumulating funds in a 401(k) they haven’t touched because they’re planning to leave any remaining balance of the money (after RMDs) to loved ones when they pass. This is a great time for you to let them know that the Secure Index annuities can provide a vehicle for continued growth with guaranteed principal protection while ensuring that the full accumulation value would be paid directly to the beneficiary at the time of the owner’s death. Why leave their legacy money exposed to risk when these benefits are so easy to access?
WHAT IF INTEREST RATES START TO RISE?
Another reason clients may be hesitant about moving their money during this low interest rate environment is the likelihood that, at some point, interest rates may rise. Clients concerned that we may be entering an inflationary period might be interested in the benefits of ING’s innovative Interest Rate Benchmark Strategy crediting option. This strategy allows clients to take advantage of rising rates on an annual basis if at any time during the contract year the three-month LIBOR increases. These clients would then receive a credited rate which is the annual change in the LIBOR multiplied by the LIBOR rate factor (e.g. 3.50, the Interest Rate Benchmark Participation Multiplier) up to a specified cap – 10% for example.
In addition to these benefits, the Secure Index series is available for issue up to age 80 and offers premium banding to provide clients with higher principal values even more accumulation potential. In addition to the Interest Rate Benchmark Strategy, clients can choose from a fixed rate and four other crediting options. As the producer, you’ll benefit from street commission of up to 5% (depending on the product and options chosen) or the opportunity to earn trail commissions to contribute to your own retirement future.
Despite the difficulties facing today’s pre-retirees, don’t miss out on your chance to capitalize on the opportunity to help clients maximize the value of their assets through in-service distributions and address even their most pressing concerns. Building a Secure Index annuity solution from ING into their portfolios can give them the assurance they’re looking for and the benefits they desire. Call your Annuity Sales Consultant for a complete rate schedule and additional ways to turn opportunity into income – for you and your clients!
* Less any prior withdrawals or premium taxes withheld. This rider is only available at contract issue and cannot be terminated once selected.
1 National Longitudinal Survey of Youth 1979. U.S. Department of Labor’s Bureau of Labor Statistics, September 10, 2010.
FOR AGENT USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 12297 – 2012/5/7
Contracts issued by ING USA Annuity and Life Insurance Company, Des Moines, IA 50309. Contract Form Series: IU-IA-3034 (07/11), IU-RA-3059 (08/08), IU-RA-3060 (08/08), IU-RA-3107. ING IncomeProtector Withdrawal Benefit Contract Form Series: IU-RA-3059 (08/08); IU-RA-3060 (08/08). Guarantees are based on the claims-paying ability of ING USA Annuity and Life Insurance Company.
Withdrawals may be subject to Federal/State income tax and, if taken prior to age 59 1/2, an additional 10% Federal penalty tax. Withdrawals do not participate in credits of benchmark, index, or interest. Federal law requires that withdrawals be taken first from interest credited. A withdrawal includes any partial surrender. All distributions from qualified annuities may be taxable. State premium taxes may reduce the final value of your annuity.
Agents may not give tax, legal, accounting or investment advice. Individuals should consult with a professional specializing in these areas regarding the applicability of this information to his/her situation. Guarantees provided by life insurance and annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC.