A Delayed or Deferred-Income Annuity is designed to provide a stream of income beginning at a future date. It can help your clients pre-fund their retirement by creating a customized stream of income payments. Clients choose when payments begin, and they may also have the ability to change the date should the need arise.
DIAs are financial products that help make sure your clients cannot outlive their assets. Your clients can purchase a DIA annuity before or after they retire, and as soon as they reach a pre-determined date, they can receive a guaranteed monthly income for the rest of their life – no matter how long they live.
Your dedicated team at Ash Brokerage is here to assist you, so you should call us today for a DIA illustration!
“The best ‘worst case’ alternative” – that’s how a large variable annuity producer recently described and positioned fixed-index annuities with income riders. It’s not the most ringing of endorsements – a glass-half-empty view – but it’s still extremely significant and impactful.
I would argue that a more accurate description may be, “the best ‘most probable outcome’ alternative” – a glass-almost-full view.
Whether you see the glass as half empty or half full, making the right choice between VA and FIA income riders can mean the difference between having a client whose objectives and expectations have been met OR having a client who may have to settle for less than expected – or worse.
There are three steps to making a good decision:
Positive or negative, whatever happens after the decision is made won’t change the fact that you made the best possible decision.
So, if we just look at the income rider portion of the VA or FIA choice, what are the facts you should consider to help your client make a good decision?
Next, what other factors should you consider in your decision process?
BUT … (glass half empty) if circumstances are such that your client can’t wait the planned number of years to take income, and they need access to their account values NOW, poor market performance in the VA could result in a diminished account value or even one less than the original contract deposit. This would not happen in a FIA.
In summary, a FIA provides greater guaranteed income – that can be structured to increase – as well as an account value protected from negative market performance. A VA could potentially provide a somewhat higher guaranteed income and a fluctuating account value.
So, what’s your decision? A FIA? A VA? A combination of both?
I’m often asked where advisors are finding client funds for fixed and indexed annuities in our current economic environment. In my opinion, most annuity sales are coming from three sources: equities, banks or bonds.
As financial markets reflect increasing volatility, more and more advisors are suggesting that their clients take some of their gains from the last few years off the table. Clients are increasingly open to the idea of protecting their gains by moving some of their equity assets into guaranteed products such as fixed and indexed annuities. Investors who, during the past 14 years, patiently stayed in the market through two severe corrections, are anxious to protect themselves against another potential downturn.
I think banks are the most obvious source of annuity funding. With consumer deposit rates hovering at historic lows for more than five years, clients who’ve been waiting for higher rates are running out of patience. The quest for a higher return without principal fluctuation risk lends itself naturally to fixed and indexed annuities.
In bonds and bond funds, there’s an entire generation of investors who’ve never experienced a prolonged bear market. As advisors are looking at their clients’ asset allocations, many are looking for bond and bond fund alternatives that are not subject to principal deterioration if rates start to rise. Again, fixed and indexed annuities are often the best solution.
You should take a fresh look at your practice’s current client files. Chances are, annuity sales are waiting to be uncovered. Ash Brokerage is here to help you choose the appropriate fixed or indexed annuity for all your clients’ needs.
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