by Tammy Melvold, Annuity Sales Consultant
Conducting business with clients from all walks of life can present with it a never-ending list of challenges. From defeating negative perceptions about a carrier or product to crafting intricate solutions to a wide range of problems, you might feel like you’re a hurdler forced to leap over a bar that just keeps getting higher. If at any time you’re facing obstacles you fear you can’t overcome, consider giving Creative Marketing a call. With our product knowledge, industry relationships and commitment to providing exceptional service to all of our producers, we can bring things in perspective and find ways of helping you cross the finish line a winner on every case.
THE FACTS
- Male client, age 63
- Considerable amount of assets out of surrender
- Unhappy with fees on variable annuities
- Looking for solid rate guarantee
THE GOAL
Reposition assets currently sitting out of surrender into a product that offered competitive rate guarantees without elevated fees. Additionally, take advantage of the opportunity to grow the asset tax deferred with a company the client could trust.
THE COURSE OF ACTION
The client had worked long and hard throughout his life and acquired quite a bit of wealth along the way. He’d taken the time to work with his financial professional, a registered rep, to develop a well-rounded portfolio that allowed him to benefit from the market’s ups while ensuring he could weather the market’s downs. With sizable assets in variable annuities that were out of surrender, the client knew it was time to revisit the financial strategies he had in place and potentially move a portion of his assets into a different kind of product that better suited his needs.
The rep and client met to discuss the current situation. The client explained that he was unhappy with the fees he was paying on the variable annuities given the low rate of return he was experiencing. The client was adamant about protecting the principal value of these assets, but wasn’t interested in indexed products because he felt he had enough other assets linked to the market’s upside potential. The rep contacted his Creative Marketing Annuity Sales Consultant to walk through alternatives that might be available to meet the client’s needs given that the value of these variable annuities exceeded the maximum principal value most carriers allowed for their annuity products.
THE SOLUTION
After considering a number of fixed products that would ensure principal protection and tax deferral while eliminating ongoing fees, we suggested the 7 MYG single premium deferred annuity from Liberty Life Insurance Company. In addition to these benefits, the product currently offers one of the most competitive interest rates in the industry: 4.10% in year one1 and 3.10% guarantees in years two through seven. The rep was concerned that his discerning client would be concerned with the carrier’s B++ rating, but we walked him through the strong management, ownership and financial ratings of Athene Holdings, Liberty Life’s parent company, to eliminate this potential obstacle. (See page 10 for more about carrier ratings.)
Although the maximum principal value is traditionally capped at $1 million for this product, we contacted the carrier directly to work on getting an exception. We completed a thorough pre-suitability process to ensure the client was in good health and that this repositioning of funds would represent an appropriate percentage of the client’s overall net worth, leaping yet another big hurdle.
THE RESULT
For the client: Through 1035 exchanges from two variable annuity contracts, we were able to provide the client with the protection and guaranteed yield he desired from a carrier with which he felt comfortable. The client was pleased with this new distribution of assets and thankful for the time spent and detail work done directly with the carrier to make it happen.
For the agent:
| Liberty Life 7 MYG | $2,900,000 |
| Total commission | $79,750 |
The rep was able to reinforce the strong relationship with his client and position himself as a credible expert who has the resources to get even the most difficult job done successfully.
To get a leg up on your competition and maximize the value of Creative’s resources for your clients, simply give your Annuity Sales Consultant a call.
FOR AGENT USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 12156 – 2012/1/23
1 Year 1 rate includes a 1% interest rate enhancement.
The 7 MYG Annuity is a single premium deferred annuity issued by Liberty Life Insurance Company on policy form series AN3015. This contract contains fees, limitations and charges. Guarantees are based on the financial strength and claims-paying ability of the insurance company. Interest rates as of 01/18/12; rates are subject to change.
Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. 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.