Top 5 reader comments this week on ProducersWEB
By Lauren McNitt
Comment of the week no. 1
Sheryl Moore comments on the title of Luke Britt's article, Think Twice Before Selling an Annuity with a MVA:
In all honesty, your article title is alarming to me. You make MVAs sound very negative. Like any other pricing feature, MVAs are simply a tool. In fact, there are many annuity purchasers that have had the opportunity to benefit from a positive MVA. However, I do agree that the majority of problems occur with MVAs when there is a lack of understanding. Some important points need to be understood, relative to MVAs:
1. MVAs do not make a difference if the client never surrenders more than their penalty-free amount,
2. Ratings companies such as Standard and Poors and A.M. Best ENCOURAGE insurance companies to use MVAs on their annuities,
3. An MVA can increase OR decrease the cash surrender value of an annuity,
4. The value of the annuity will only be increased or decreased by the MVA if more than the penalty-free amount is withdrawn or the contract is surrendered during the Surrender Charge period.
In general, if interest rates are lower at the time of withdrawal than at the time the contract was issued, the annuity’s Cash Surrender Value will be increased (market value adjusted). If interest rates are higher at the time of withdrawal than at the time of issue, the Cash Surrender Value will be reduced.
Thanks for taking the time to educate your readers!
Sjm Comment of the week no. 2
Luke Britt responds to Sheryl Moore's comment on his article, Think Twice Before Selling an Annuity with a MVA:
Thanks for taking time to read the article. The article title conveys what I meant to communicate: THINK. In the current interest rate environment, with my specific client in mind, could a product with an MVA be an inappropriate recommendation? That's a question that could and should be asked more often.
That's all the point I'm trying to pass along. Knowledge is power and with that power agents can make more suitable recommendations that fit each individual client need.
Thanks for what you're doing to help the industry and thanks again for reading my article.
Luke Comment of the week no. 3
Steve Forman asks Jeffrey Reeves whether his article, Direct recognition, indirect recognition and the dangers of agent misinformation, relates to the long term care insurance industry:
Spending my days over in the LTCI world, discussions like these are a bit foreign to me, but very interesting and informative. The question of "Mutual" vs "Stock" is one which rarely comes up, and if it does, the conversation is limited to a few sound bites.
Having said that, in your article about DR Mutuals vs NDR Mutuals: does this conversation extend to the Mutuals we represent in the LTCI market space? Obviously, there are no ramifications regarding policy loans against cash value, but is there something I should keep an eye on? One or two carriers famously "pay a dividend" to their policyholders, but that seems almost gimmicky next to their overpriced policies-- and I couldn't tell you whether this company is DR or NDR.
Stephen D Forman, LTCA INC Comment of the week no. 4
Paul Cross comments on Rodney Ballance's article, A real life explanation of the global debt crisis:
A challenging read and re-read. America is where the people, not the government, make impossible dreams come true and once again we will have to rise to the challenge. We must cut short government spending and bring the monetary system into control. The people must make their presence known.
We can argue some points of understanding and that's ok as long as we focus our efforts in the right direction. Keep the mission focused and moving forward.
Paul J. Cross Comment of the week no. 5
Jeffrey Reeves commends Lew Nason on the points he discusses in his article, Do I need a financial advisor?:
Another home run, Lew.
It's odd that folks don't hesitate a minute to call on plumbers, landscapers, interior decorators, etc--folks that contribute only slightly to the wealth and well being of the folks--but hesitate to seek the guidance of a financial advisor.