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In this time of stock market uncertainties, and low interest
rates on certificates of deposits more and more clients are
turning to fixed annuities for the security and tax deferral
they provide.
However, many of these clients do not plan on taking an income
from their deferred annuity, instead they plan on leaving
the proceeds to their children, or grandchildren. When this
happens the gain in account value is income taxable to the
contract owners beneficiaries.
An interesting alternative, or supplement to this annuity
concept is a Whole Life policy with a single premium paid
up additions rider. Remember, your prospect must be insurable!
Because these policies will usually be a Modified Endowment
Contract (M.E.C.) withdrawals during life will be treated
in the same manner as if they had been taken from an annuity.
However there are three significant advantages to the Whole
Life with single premium paid up additions rider.
- Significantly larger early death benefits.
- Income tax free proceeds payable to the beneficiary.
- Average First-Year commission of 6+ percent and generous
renewal commissions
One possible disadvantage is in contract accumulation values.
This variance is quite small, as you will notice in the following
comparisons.
I strongly suggest you review this concept and gain a thorough
understanding of it.
Once you are comfortable demonstrating this to your clients,
you should develop a prospect list including people you have
sold annuities to in the past. This approach may not work
for everyone, however it is well worth considering, and presenting
to your clients.
Farmers and Traders is a mutual company with a strong dividend
history, however dividends are not guaranteed. Be sure and
communicate this clearly to your prospective policyholders.
On a guaranteed basis this concept is still sound.
Attached are sample proposals for various age female clients.
If you have any questions, please contact the USBroker.com
or your marketing service representative. These illustrations
are to be used for training purposes only. Always prepare
a complete proposal for your prospects.
Good Selling!
Arnie Pechler III, CFP, LUTCF, LLIF
Vice President Sales & Marketing
Farmers and Traders Life Insurance Company, Syracuse, NY
If you would like
more information and to receive a "Starter Kit", register
online today and you will receive an email immediately
on how to get started.
USBroker Farmer and Traders representative
Deborah Seymour
1-800-347-0960 ext 230 (EST)
fax: 1-315-471-3912
dseymour@theusbroker.com
See F&T Annuity
Alternative "Flagship Life I & II"
MEC
Comparison page
Guide "What
is a MEC and How to Sell It"
Newsletter "Expanded
Inheritance" & "Sr
Wealth Transfer"
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