It's About The Risk, Not The Rate
We are honored to feature one of the most respected individuals in the world of fixed annuities as a guest writer for this month's Annuity News. Jack Marrion's article, "The Case For Fixed Annuities," emphasizes the primary reasons why people buy this type of product. I'm sure you won't be surprised when Marrion reveals that it's not about the rate, but more about risk aversion. Mark Twain spoke for most investors when he said, "I am more concerned with the return of my money than the return on my money," a sentiment which still holds true in today's volatile markets. Find out what tips Marrion has to help consumers overcome their fears about purchasing annuities.
Director, Sales & Marketing
The Case For Fixed Annuities
Reprinted with permission from Jack Marrion, President, Advantage Compendium LTD. Originally published Oct. 3, 2011, in the e-newsletter LifeHealthPRO, a Summit Business Media publication.
A recent study found that when retirees were essentially faced with a coin toss, where if it came up heads they'd win $100 and if it came up tails they'd lose $10, that half of the retirees wouldn't take the bet — even though the upside is 10 to one. This has strong implications for fixed annuities. The first one is that a significant number of retirees won't have anything to do with the stock market if they understand that money can be lost. The key here is the retiree understands that there is a risk of loss. You need to ask questions such as "If you had $100,000 in an investment and it was worth $80,000 tomorrow, what would you feel like doing?"
How can you make the case for a fixed annuity despite your client's risk aversion?
Agent Of Record Updates Now To Annuities Administration
As of October 1, the Annuities Administration team now has the responsibility of updating the agent of record. Initially the person who wrote the annuity, the agent of record is the recipient of all correspondence and information relating to the policy.
There are multiple reasons why a policy might need to have an agent of record updated, including, but not limited to:
- Policyowner request
- Assignment of a new producer ID
- Writing agent no longer active with The Standard
- Business reorganizations
Please review these recent compliance alerts.
Illinois — Rule 3120.20 – .90: Suitability Of Annuity Sales
Illinois — Legislation Senate Bill 1607, Public Act 527: Use Of Professional Designations And Senior-Specific Certifications
Iowa — Rule Iowa Insurance Bulletin 11-4 re 191 Iowa Administrative Code 15.68 – 15.73: Permitted/Prohibited Purchase Recommendation Activities
North Dakota — Rule Senate Bill 2111: Life & Health Guaranty Association Notice: Increased Coverage of Cash Surrender Value of Annuities
Vermont — Regulation SI-2011-03: Use Of Professional Designations And Senior-Specific Certifications
Annuity News is an online newsletter for annuities producers of The Standard.
Holiday Dates And Deadlines
November 24 and 25
December 23 and 26
January 2, 2012
Distributions By December 19, 2011:
- All distribution requests received at the home office complete and without any additional requirements by December 19 will be completed by December 30.
- All requests received after December 19, or incomplete requests will be processed with the intent of completion by December 30; however, we cannot provide the same guarantee.
New Business By December 28, 2011:
- All complete deferred and immediate annuity applications received at the home office by December 28, including premium and without any additional requirements, will be issued by December 30.
- Applications and pending requirements that are met by December 28 will be issued by December 30.