In Turbulent Times, Annuities Shine
Everyone knew it wasn't going to be pretty. But the August 8th sell-off of U.S. equities in the first trading day since credit rating agency Standard and Poor's cut the U.S. government's sovereign debt rating to AA+ sent stocks into a tail spin. Investors and their financial advisors are wondering what — if anything — they should do.
For me, it just reinforces the great features and benefits fixed annuities offer and why someone who is looking for a safe place to invest their money should consider a fixed annuity. People often get caught up in rate of return and forget the all the important features and benefits a fixed annuity offers, including the following:
- Guaranteed minimum crediting rates
- Guaranteed return of premium (not all annuities)
- Guaranteed income for life upon election
- Guarantees that are backed by multibillion dollar financial institutions
- Tax-deferred growth
- Contract-specific surrender-free withdrawals
- Surrender-free withdrawals if confined to a nursing home* (in the vast majority of states)
- Surrender-free withdrawals for terminal illness*
- Proceeds often pass outside probate
- Values not subject to the claims of creditors (within state limits)
- Special, favorable tax treatment for annuitized payouts
So, in these turbulent times where uncertainty is the only certainty, remind your clients that fixed annuities are an excellent choice to keep their hard-earned money safe.
Director, Sales & Marketing
*Not all annuities offer this feature
Autumn RMD Reminder
Kids heading back to school and leaves changing color is a good reminder that the end of the calendar year is fast approaching — along with the deadline for annual required minimum distributions (RMDs) from qualified policies for annuitants age 70½ and older. Here are some facts about RMDs and why an autumn distribution is a great idea.
First and foremost, if an annuitant does not take their required minimum distribution by December 31, they risk an IRS penalty of 50 percent of the amount of the distribution. Insurance companies are not allowed, by law, to back-date distributions to a prior tax year, which means it's never a good idea to request an RMD at the last minute. An autumn distribution ensures that the requirement is met by the December 31 deadline, and the possibility of an IRS penalty is avoided.
Take this opportunity to check in with your clients, provide their RMD options, set up necessary accounts and obtain required documentation for their RMD option of choice. If this is your client's first year taking an RMD from The Standard, ensure that we have the previous year-end balance from the other carrier if it has not already been provided.
All required forms can be found on our website by clicking on Find Forms and Materials and selecting Policyowner Service. Please call our team for information about other documentation that might be needed for special handling options.
RMD requests that will be sent directly to the annuitant, with no special handling or requirements, may be faxed to our office at 800.378.4570. Any special handling situations require original paperwork to be returned to the home office.
RMD quotes are available both over the phone and also in written form upon request. Contact our Annuities Administration Team for RMD quotes or answers to any questions at 800.247.6888 or e-mail us at firstname.lastname@example.org.
Please review these recent compliance alerts.
South Carolina — Regulation 69-29: Suitability of Annuity Sales
Delaware — Senate Bill 30: Civil Union Arrangements
Annuity News is an online newsletter for annuities producers of The Standard.