When you hear the words “revolutionary new product,” do you find yourself rolling your eyes, envisioning an infomercial salesman promising something that’s too good to be true? What if I told you this new product was a fixed indexed annuity that really might change your practice by providing clients with the safety and accumulation potential they’ve been looking for in this challenging market environment? The Total Value Annuity from Security Benefit Life Insurance Company (Security Benefit) may be just that. Sounds intriguing, but maybe not enough to make you pick up the phone and call us – until you find out that what comes with the product just might be exactly what you need to make the transition to a new level of success.
At Creative Marketing, we’re committed to developing lasting relationships with our carriers and producers that are mutually beneficial. These individuals and companies share our drive to provide consumers with the solutions they need to enjoy a comfortable, safe retirement. And core partnerships meshed with core product for your sales arsenal is the kind of combination that’s more than just a novel idea. It’s our promise to you day and day out. Spend a few minutes reading through this article, and find out how a groundbreaking product from an IMO with a rock-solid foundation is worth that phone call.
THE PARTNERSHIP
Creative Marketing has been chosen by Security Benefit as one of four exclusive partners for the Total Value Annuity. If you’re thinking “who the heck is Security Benefit,” let’s take a more in-depth look. Security Benefit is currently in its 120th year of helping clients prepare for the future. Established in Topeka, Kan., as a fraternal society, Security Benefit has remained true to its nature of caring for individuals and the community as it has evolved. In 1973, Security Benefit entered the 403(b) space and by the year 2000 had established a strong variable annuity distribution platform.
In 2010, Security Benefit was purchased by an investor group led by Guggenheim Partners, and has since renewed its focus on product innovation in the annuity space. Security Benefit currently provides fixed and variable annuities to about 200,000 policyholders in 49 states and has more than $9 billion in assets. Although currently a B++ rated company by A.M. Best, Security Benefit’s solvency ratio is an indicator of its stability and financial strength. This financial strength measurement showcases the ability of a corporation to meet its financial obligations both short-term and long-term. At more than 106%, Security Benefit’s solvency ratio is higher than those of many A rated insurance companies. Furthermore, its risk-based capital ratio is well over 400%, representing capital available to protect customers against adverse developments based on an assessment of outstanding policies, the risks they pose and how the company manages its pool of assets.*
When these factors are combined with the strength of Guggenheim Partners, you can be confident the company is poised for growth and positioned for continued success. Guggenheim Partners, LLC, is a privately held, global financial services firm with more than $125 billion in assets under supervision and is a unit of one of the most well-known and well-respected legacies in modern global business. The firm’s fixed income investment expertise helps Security Benefit provide competitive guarantees to its clients.
THE PRODUCT
Knowing that the carrier’s history, strength and loyalty to serving its customers are solid can provide a great story to go alongside the great story the product tells. The Total Value Annuity (TVA) is a fixed indexed flexible premium deferred annuity positioned to help clients address their accumulation, income and legacy needs. Both non-qualified and qualified IRA money are eligible, and a minimum premium of $25,000 is required. Contracts issued for more than the maximum $1 million total premium will require prior home office approval.
As you start to dig deeper, you can see that the TVA’s core features and benefits may address the needs of many of today’s retirement savers. The product is built on a 10-year chassis and can be used as a straight accumulation sale. In most states, the base product includes an 8% premium bonus that applies to all first-year premiums and is credited to the Account Value.1 To ensure your clients have the flexibility to access these funds for life’s “what ifs,” 10% free withdrawals of the prior contract anniversary’s Account Value are available beginning in year two. If a client is of the age to take required minimum distributions (RMDs), he or she can begin taking those in year one without penalty. Keep in mind that a Market Value Adjustment (MVA) may apply during the surrender charge period. If those “what ifs” mentioned above include terminal illness or nursing home care, waivers are built into the base product and can be accessed after year three.
In order to build up the contract’s Account Value, the Income Benefit Base of the Guaranteed Lifetime Withdrawal Benefit (Income) Rider and the Death Benefit Base of the Guaranteed Minimum Death Benefit (Death Benefit) Rider, the TVA offers clients three index crediting options. The Fixed Account is crediting daily with a 1% minimum guarantee. An S&P 500® Annual Point to Point Index Account offers interest credits linked to the S&P 500® Index (without dividends), and includes full participation and a cap. Lastly, the TVA features a proprietary, innovative new index account that features no cap and no spread,2 with a five-year reset with vesting: the 5 Year Annuity Linked TVI. The index utilized by this index account, the Annuity Linked Trader Vic Index (ALTVI), is designed to be non-correlated with equity and bond market performance and is uniquely volatility controlled. With many individuals at or near retirement having suffered major market losses in the past five years, this may be the index interest option they’ve been waiting for. There are no restrictions on how clients can allocate their initial premium.
For clients who need lifetime income or want to transfer wealth to heirs upon death, two optional riders are available at issue for 95 basis points: a Guaranteed Lifetime Withdrawal Benefit or a Guaranteed Minimum Death Benefit. The base product and the Death Benefit rider are available for issue ages 0 to 80, while the Income Rider can be issued for clients ages 50 to 80. Initially, the premium bonus is increased by 2% if one of these riders is selected. Then, a stacking roll-up that consists of a guaranteed 4% compounded interest rate plus the weighted average of the interest credits from the index interest crediting options selected provides maximum lifetime income potential.3
To let your clients remain in control of just how their money is working for them, the Income Rider includes very competitive payout factors and a Home Healthcare Doubler that doubles the amount of annual income they will receive for up to five years if they cannot perform two of six activities of daily life (ADLs).4 As far as the death benefit goes, the TVA has the potential to dominate the wealth transfer space. Your clients’ beneficiaries may receive the Death Benefit Base as a lump sum, capped at 300% of the total premiums, excluding the bonus.
THE STORY
As we’ve taken a deeper look at the individual layers of the product and this partnership, the “revolutionary” nature of the product is clear. Plus, it includes a 7% street comp. But don’t forget about what else you get when you choose to write TVA business through Creative Marketing. We’re not just here to tell you about the groundbreaking index or its unique crediting methodology, or sell you on product and comp – we’ll work with you to design cases where the TVA solution benefits your clients most. Through our new Geared producer success platform, we’ll also provide one-on-one business consulting to make sure that competitive edge is yours.
The exclusive distribution platform is nothing new to Creative, and we look for it to be a continued part of how we provide resources and solutions you can’t get anywhere else. Focusing on clients is your job. Recognizing opportunity and helping you grab hold of it is ours. With a limited number of producer contracts available, call your Annuity Sales Consultant today to get contracted and take the required product and carrier training. With the Creative’s support at the core of your practice, the sky’s the limit.
