Immediate Annuity Industry Receives an F !

Annuity Secure Act Impacts Not Being Disclosed at Point of Sale Originally, I intended to author this blog one year following the passage of the Secure Act but, out of fairness, decided to give the life insurance industry a little more time.  Now, a full TWO years later, I think sufficient time has passed to assign the life insurance industry an “official” F grade. I’m not going to single out individual carriers…

IRA Annuity Stretch Disappears Quietly Into the Night

“We all got up to dance, Oh, but we never got the chance!” – Don McLean At the stroke of midnight on 12/31/2019, with the Presidential signing of the new fiscal year 2020 appropriations bill with the SECURE Act (Act) attached, the very last effective opportunity to preserve Stretch IRA rights for future decades and to complete a stretch IRA annuity with unlimited funds to any Beneficiary by purchasing a…

Longevity Insurance, Protect Me and My Kid too!

Longevity insurance protection is the purchase of a fixed and scheduled income (usually monthly) permanent annuity contract that is priced today and supports a known annual income many decades from now, all guaranteed by the issuing life insurance company. Typically, the initial annuity income payment date occurs on or after your age 80. Annuity pricing mechanics have to do with interest rates and an estimate of how long you and…

It’s Official: Ken Fisher Hates … Me! (A Fictional Conversation With Ken Fisher– Satire)

Several weeks ago, a feverish annuity agent/industry response was unleashed driven by the posting of the USA Today interview of Ken Fisher (KF), Founder, Executive Chairman and Co-Chief Investment Officer of Fisher Investments titled; “Why I still hate annuities: Here are the reasons these investments are bogus”, on LinkedIn. This was, yet again, another annuity attack in a long series of such attacks spanning many years. A long-time Ken Fisher…

SPIA Commutations and Income Taxation Considerations

SPIA post issue management concerns are not often considered.  To most agents and individuals these contracts tend to be “fire and forget”.  Post issue management concerns are typically associated with SPIAs issued via the new business application process and not associated with SPIAs that are created via “supplemental” annuity contracts when one annuitizes an existing deferred annuity contract or life insurance policy.  Supplemental annuity contracts are altogether different animals when…

Deferred Annuities, Breaking the Serial – SPIA Rescue

As annuity interest rates start to heat up coming out of their ice age thaw, it’s time to revisit what serial annuity contracts are and how to break serial contracts once they occur.  Should general interest rates continue to rise and new declared rate deferred annuity business begins to pick up, there will be a fair amount of new 1035 exchange activity from older declared rate contracts with low current…

DOL Fiduciary Rule and SPIA Pricing Disclosure, It’s About Time!

There is a new sheriff in town! And his name is Fiduciary.  Given the new Department of Labor (DOL) Fiduciary rules regarding individual retirement arrangements (IRAs) and qualified retirement plans along with the retention of fixed immediate annuity contracts under the PTE 84 – 24 exemption, I believe the time has finally arrived to compel a more thorough and complete fixed immediate annuity pricing disclosure.  If all you carriers out…

A Blast from The Past SPIA Protection Unintentional Consequences

Several years ago, the old Presidential Life Insurance Company, Nyack New York (Presidential), issued a SPIA with very unique variability which, I helped design.  Of course, this was prior to the Athene Life and Annuity Company (Athene) purchase in 2013.  Up until the Athene purchase, tens of millions of dollars of premium were accepted by Presidential for the “Income & Legacy”, the marketing name for the SPIA.  As fate would…

Joint & Survivor Annuity (qualified) Non-Spouse Creditor Protection

Weeks ago, I commented on Forbs post regarding establishing a “conduit trust” for a non-spousal IRA beneficiary, usually an adult child.  The attorney was recommending such a trust from a creditor protection standpoint relative to the IRA beneficiary.  In June of 2014, the Supreme Court ruled a non-spousal inheritance of an IRA isn’t protected as “retirement funds” relative to the non-spousal Beneficiary.   Therefore, inherited IRA funds may be seized in…