Annuity FYI Blog

According to Insurance News Net’s “Allianz Life President and CEO Named to IRI Board of Directors,” the Insured Retirement Institute has a new Director on board.  Gary C. Bhojwani, Allianz Life Insurance Company of North America’s President and CEO, has joined the IRI’s Board of Directors.  The not-for-profit IRI is the main authority for everything pertaining to annuities and other insured retirement strategies.

Cathy Weatherford, the IRI’s President and CEO, says that the organization has been very successful in changing retirement planning opinions and laying the groundwork for insured retirement strategies becoming more popular.  They are happy to see their board grow with many of the top leaders in the nation, helping them maintain their position as the top annuity organization.

The IRI’s National Retirement Planning Week in April successfully educated millions of Baby Boomers in the need for retirement security.  Whether through 401k annuities or other retirement plans, Bhojwani feels privileged to be part of an organization helping to promote solid retirement planning to Americans.

In the PR Web press release “Annuity FYI Endorses Secondary Market Annuities, With Rates as High as 7.75%,” secondary market annuities are said to be better investments than most fixed indexed annuities.  In a market with current low interest rates, they rival traditional fixed annuities, equity linked CDs, and bonds.  The one-time investment usually ranges from around $40,000 to $500,000 and can get an interest rate around 7.75% currently.  The investor can receive their payments periodically or in a series of lump sum payments over time from established and dependable companies like John Hancock, MetLife, and Prudential.

A current $50,000 investment in a secondary market annuity from Transamerica would repay an investor $300,000 over the course of 24 years, yielding 7.75%.  There is a comparison table and access to expert help on this Annuity FYI website.  You can also sign up for weekly emails to inform you of the most recent good investments.  Many investors don’t even know what secondary market annuities are, even though they can be such a valuable investment product.  Speak with an expert via phone or internet and see if this investment works in your portfolio.

In a follow up to last week’s blog about the process of selling an annuity in a secondary market, here is some additional information about secondary market annuities.  From JG Wentworth’s article “New Opportunity: The secondary market for annuities creates new options for you and your clients,” Michael Vaughan discussed this unique business opportunity.

There are many reasons why annuity owners might want to sell their investment.  Any change in one’s financial plan, whether it be your retirement strategy or your overall investment strategy, may warrant an annuity sale.  It is also possible that someone who inherited an indexed annuity or another annuity product may not have the same investment strategy as the person from which they inherited the product.  Other reasons someone may want to sell their annuity include any need to liquefy whether it be for medical expenses or a large purchase.

The secondary market for annuities allows the client/adviser relationship to be strengthened.  Advisers can offer their clients new options financially that they might not have had if they were unhappy with their annuity.  New business opportunities and improved marketing for advisers leads clients to receive better one on one treatment that offers them many benefits and opportunities for new products and investments.  This market is good for the insurance industry as a whole as well as the clients that are able to use it.

The secondary market for annuities has only been around for a couple of years, but it offers a wealth of benefits for annuity investors.  According to J.G. Wentworth’s “New Opportunity: The secondary market for annuities creates new options for you and your clients,” a secondary market annuity might be the right choice for many people.  If you own an annuity, this market can help you liquidate.  It also boosts the insurance industry as a whole, including helping agents and brokers.  Financial advisers can increase their revenues, better help their clients, and increase their marketing with the secondary annuity market.

There are five steps that will occur in a typical secondary market annuity sale.  First, an insurance agent or broker sends an annuity contract to the finance firm that may purchase the annuity through a brokerage general agent.  Next, the finance firm sends purchase options back.  The investor and their adviser determine what option is best for selling their variable or fixed annuities and respond to the finance firm via the brokerage general agent.  The finance firm then lets the insurance company know that the purchase has been completed.  Finally, the investor will receive their proceeds in two to four weeks after the agreement is finalized.

Variable annuity sales increased from the 1st quarter of 2009 to the first quarter of 2010, according to Insurance News Net’s “US Sales of Variable Annuities See First Year-Over-Year Gain in Two Years.”  With $31.4 billion in total sales, variable annuities increased 3% from the same time last year.  The first quarter of 2008 was the last time that there was such an increase in variable annuity sales.  A spokeswoman for the Insured Retirement Institute says that this marks a slow and cautious return to the stock market for investors.  The sales are from both individual and group annuities.

Eighty-percent of investors who purchased a variable annuity also included some type of living benefit guarantee.  The most popular was the guaranteed lifetime withdrawal benefit.  Purchasing a death benefit annuity was also widely popular to protect investors’ heirs.  Prudential Financial, Inc. remained the top variable annuity seller in the first quarter of 2010, after capturing the top spot for all of 2009.  The rest of the top five companies were MetLife, TIAA-CREF, Jackson National Life and Lincoln National Corp.  The consensus with variable annuities is that they are getting simpler for consumers and less risky for insurers.