Selling a variable annuity – now an optionBlog added by Joe Zucker on January 12, 2011
Annuity Recover

Joe Zucker

NY, NY

Joined: February 23, 2010

My Company

Everyone at this point has heard of life settlements (LS). Initially when the LS market was in its early stages issues, ethics and regulations were main concerns of agents and policy owners who were reluctant to sell insurance policies for cash.

Now, over 10 years later the LS market with its ups and downs (as any other market) has slowly established itself as a viable option to restore wealth to seniors. However, with liquidity in the LS market tight, new financial products are constantly born in order to adopt to financial realities on the ground.

One such financial product that is slowly gaining popularity is a variable annuity exit program.

With the stock market still significantly down off of historic levels, most variable annuities have experienced market losses, with a corresponding decrease in their cash values.

To the extent your client does not need the death benefit or the specific income benefits of the contract — or to the extent they can re-purchase those benefits at a lower cost with the proceeds they receive from the new program, just as with LS — there is now an exit strategy which allows the client as well as the agent a more lucrative exit opportunity.

Again, because this product is fairly new, many agents and clients may shy away and only realize an opportunity when the margins get lower and demand decreases, as I have seen numerous times with agents in the LS market. But with FINRA approval and regulatory issues complied with, this market allows an easier transaction than the LS market considering age and health are only taken into account based on standard mortality — meaning the program will look at any age without medical records.
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