Insurance Pro Blog Podcast | Life Insurance and Annuity Insights

 

According to all media reports and the long fought battle around the Department of Labor's new “Fiduciary Rule”, fixed indexed annuities are evil. If that's so…why are more people than ever choosing to purchase them?

Based on recently released numbers from 2016, sales of fixed annuities are on the rise. Here are some of the highlights:

* Total fixed annuity sales for 2016–$117.4 billion, 14 percent higher than 2015

* Fixed indexed annuity sales were up 12% to a total of $60.9 billion

* Fixed deferred rate annuity sales $38.7 billion, an increase of 25% over 2015

* Fixed immediate income annuity sales only grew 1% to $9.2 billion

* Deferred income annuity (DIA) sales increased by 4% to $2.8 billion

* Variable annuity sales continue to falter, down to $104.7 billion from their peak in 2007 of nearly $190 billion

But why would we even care? And more importantly why would you?

Opponents of fixed annuity products have been on the warpath the last few years which has culminated in the Department of Labor's “fiduciary rule”. Without getting lost in the minutiae, the thrust has been to convince the public that the only reason someone would ever buy an annuity (in particular a fixed indexed annuity) is that a crafty insurance salesperson snookered them.

Because you know, everyone who earns a commission for making a sale is evil…right?

 

We're veering off course slightly this week to discuss long term care insurance. The recent decision to finally allow the beleaguered long term care insurance company, Penn Treaty (not to be confused with Penn Mutual) to be liquidated, sparked a need to discuss the ongoing issues with long term care insurance in general. We are ... Keep Reading

 

We're veering off course slightly this week to discuss long term care insurance.

The recent decision to finally allow the beleaguered long term care insurance company, Penn Treaty (not to be confused with Penn Mutual) to be liquidated, sparked a need to discuss the ongoing issues with long term care insurance in general.

We are asked about long term care insurance on occasion and we certainly think using the product is a good idea for some people.

However, there continues to be turmoil in the industry at large as to what sort of premiums need to be paid to sustain these products over the long term.

The jury is still out on that matter obviously as we see fewer and fewer companies in the business of issuing new long term care insurance policies and substantial increases on existing blocks of business continue to increase.

To be clear, we're not talking about long term care insurance benefits that sit atop a life insurance chassis. There a handful of options that do this quite well.

In today's episode we're strictly dealing with the issues associated with what we call “traditional long term care insurance”. These products require a premium paid monthly or annually strictly for use as insurance to provide long term care benefits.

It's honestly a bit shameful that we produce a podcast for well over a year that has life insurance as its primary subject and we've yet to discuss the subject of life insurance premium financing. Well, that stops today. With one caveat… Please keep in mind that this is a complex topic with many moving parts and we ... Keep Reading

 

It's honestly a bit shameful that we produce a podcast for well over a year that has life insurance as its primary subject and we've yet to discuss the subject of life insurance premium financing.

Well, that stops today.

With one caveat…

Please keep in mind that this is a complex topic with many moving parts and we can hardly do it justice in a half hour. We are merely scratching the surface with how it works and when it may be an appropriate solution.

In the future we may discuss in more detail some of the misapplication of premium financing.

Do you have experience with using premium financing to fund life insurance? We'd like to hear from you We'd like to hear from you–contact us here.

If you believe the government needs to figure out a way to help you better fund your retirement, you probably should just skip this episode. On the other hand, if you'd like to hear us discuss a recent survey regarding retirement preparedness and how 80% of Americans believe the government needs to fix their problem, ... Keep Reading

 

If you believe the government needs to figure out a way to help you better fund your retirement, you probably should just skip this episode. On the other hand, if you'd like to hear us discuss a recent survey regarding retirement preparedness and how 80% of Americans believe the government needs to fix their problem, you're in for a treat.

Here are some other useful statistics from the survey results compiled by Greenwald & Associates for teh National Institute on Retirement Security (NIRS):

* The perceived “retirement crisis” is not a partisan issue– among the 800 people surveyed, 83% of Democrats and 72% percent of Republicans favor state-sponsored retirement savings plans for those who are not offered work sponsored plans.

* Government spending cuts that might lead to a reduction in Social Security benefits are highly unpopular as 76% said no to that suggestion.

* 80% of survey respondents say the average worker “cannot save enough on their own to guarantee a secure retirement”

* Making sure that Americans have a secure retirement should more of priority according to 88% of those surveyed.

Wow…just curious, what do you think about this? Please let us know.

 

In episode 59, we're not directly discussing the finer points of cash value life insurance. Just thought I'd get that out of the way in the spirit of full disclosure. No, we're adding another episode to our Soapbox Series. It actually comes on the heels of a private discussion Brandon and I were having about ... Keep Reading

 

In episode 59, we're not directly discussing the finer points of cash value life insurance. Just thought I'd get that out of the way in the spirit of full disclosure.

No, we're adding another episode to our Soapbox Series. It actually comes on the heels of a private discussion Brandon and I were having about using leverage to “juice” your returns.

Every now and then, one of us will stumble upon a blog post, magazine article, or something of that sort that makes our skin crawl a little bit. To us, “financial advice” that seeks to demonstrate the merits of using leverage aka “other people's money” (OPM) is pretty high on the list of things that sound like a good idea but rarely work in practice.

On the other hand, the carnage left behind in failed experiments using leverage is a much longer list.

Yes, we understand the math.

Yes, we know it should work.

Yes, your logic is almost perfect.

Except it seems there's most often an “x” factor. Some variable that flies in from parts unknown that ruins your perfectly balanced equation.

Take a look at the picture toward the beginning of  this post, it is the perfect example…it looked good in the picture, I had all the right instructions, so what went wrong?

Well, I was way out of my depth. I discounted the fact that the person who constructed and baked this cake likely has years of experience. They certainly gave me clear instructions but there are probably hundreds of little things that they just do without thinking based on their past experience. These little adjustments weren't intentionally omitted.

However, those little adjustments when compounded make the difference between the picture on the top and what my result would be if I attempted this cake (the one on the bottom). Glorious success or complete failure.

To hear more specifics of our discussion, listen to the full episode.

 

Typically when someone says, “we've decided to go in a different direction” I get the image of sitting in the conference room of my very first job post-college. The conference room was affectionately known as the “fish bowl” because it was all glass and all of your co-workers could gawk at you being admonished by ... Keep Reading