By: Jeff Affronti

February 23,2016

   

Immediate & Guaranteed Lifetime Income Insurance
Guaranteed Immediate Annuities

The Single Premium Immediate Annuity is still not being presented as much as it should be by agents and advisors. Clients making decisions on Lifetime Income likely do not know they have another guaranteed insurance option. Outside of a few exceptions, most of the major marketing by insurance carriers and brokerage firms do not include SPIA's. They all seem to talk lifetime income, however, they push the higher commission, higher profit and fee based products. This is a major swing from the marketing of the past. A fee in a fixed annuity is anti-everything that us long time fixed annuity guys believe in. The fact that the SPIA has a lower commission should not be a concern or a thought when the product can offer some really outstanding guarantees.

Example: 
A 62 year old male with $1,000,000 and wants to produce income NOW!
SPIA Result: 
5.64% Annually
 with a 141.17% minimum guaranteed return!

Buy purchasing an immediate lifetime annuity with a 25 year minimum income guarantee this male can get a $56,469 (5.64%) annually. That is a guaranteed minimum premium return of $1,411,725 guaranteed DAY 1 and income starts 1 MONTH after premium received. 

The immediate annuity made the client no less than 41% while providing peace of mind. Where else can this type of risk averse client take 5.64% of his nest egg annually and never run out! Not to mention the ultimate guarantee of getting a 41% gain no matter what!  This combination of higher income and premium growth guarantee is why the SPIA should be the go to product for guaranteed income. 

Yes, the commission is lower on an immediate annuity than a fee based FIA Rider which allows income to be taken immediately. This fact should not prevent the SPIA from being shown to the client. Present both fairly with the real income numbers and let the client decide, it is their retirement income after all! 

The idea is to not outlive your money. 
Maximizing it at the same time does not hurt.

Jeff Affronti 
Marketing, illustrating and building fixed annuities since 1995.

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