Annuity Rate

Using Negative Advertising to Acquire Annuity Prospects

2008-05-15T03:41:00.000-07:00

How do you buy toothpaste? Is it because Colgate protects you with fewer cavities or because Crest has been shown to be effective in preventing tooth decay? What about cars? GM has just the one for you however; Ford claims their car is rated higher than the others.

Have you ever noticed that advertising is either negative or positive?

Negative advertising focuses on elevating an existing concern. Positive advertising focuses on the positive attributes of a company or product.

How are politicians elected? Do they emphasize their positive attributes? Do they play above the board and respect their opponents? Do they let the election stand on the record?

No.

They attack, attack, and attack. They harp only the negative qualities of their opponent, both factual and perceived. The results pay off: Negative campaigning wins elections.

Negativity not only wins elections, it also sells products. By instilling distrust and fear into prospects, you can offer solutions to their worries. It can make you an enormous amount of money.

How do you use negative advertising to make money? It's easy. It requires a different approach than is traditionally used by insurance companies and agents. The Insurance industry focuses on establishing an image that comes across as professional and experienced. Agents emphasize how much training they have, how many degrees they've received, and how active they are in their communities. Typically, such advertising is a waste of time and money.

Look at your own experience. When was the last time you ran a company approved advertisement? How many calls did you have from it? We both know the answer to that question. If you had any at all, it's unlikely the results even began to pay for the cost of the ad.

Negative advertising is the key to your success. By talking about how good your company is with the usual claims in insurance advertising, you offer your target audience exactly what everyone else does: a boring sales pitch. Your target market doesn't want a sales pitch. They want solutions to their concerns. Emphasize what they're worried about, and you?ll grab their attention. By offering solutions to their problems, you offer them security and peace of mind.

Security and peace of mind is what is most important to seniors. How do you go about it? Recognize the enemy.

Who is the enemy? Old thinking! Here is an example, LTC salespeople.

Have you ever attended a LTC insurance seminar or a LTC sales meeting? Have you ever listened to a LTC ad on the radio? Do you ever wonder why sales for LTC insurance are so low, when it's so heavily touted as the next great market?

LTC is in fact a great market. It?s a market where an enormous amount of income can be made. However, it?s not easy to sell the insurance.

Selling annuities to seniors who are concerned about LTC, to protect their assets makes the money.

Nothing else is worth the effort.

Let's go back to advertising. When an LTC salesperson advertises, what is the message conveyed?

1. The many benefits their policies have to offer 2. The necessity for seniors to protect their assets 3. Fear: Seniors who don't own LTC will likely be confined to a nursing home where they won't be taken care of properly.

You've heard it all, no doubt. You may have even used some of these points yourself.

The goal is to attack the fear the LTC companies and salespeople instill. Structure ads which plant questions in the minds of our target audience about the competition, and attack LTC as a solution to their fear. This gets your prospect thinking about other possible solutions, other than LTC.

The goal is to create fear, uncertainty and doubt about the enemy.

The following are examples of negative ad headlines used to accomplish this:

? Find out why very few seniors need LTC insurance!
? Find out what LTC insurance companies don't want you to know!
? Find out what your LTC salesperson isn't telling you!
? How to cut your LTC insurance premiums in half!
? Save 50% on your LTC insurance premiums!
? Don't be a sucker! Find out if LTC really works!
? Get informed. LTC insurance isn't for everyone!

The ad provides information on how to contact your office.

Remember you don't want to jump into a sales presentation with these people. They need to be educated. When they schedule time with you, they'll be receptive to a solution that addresses their concerns: you in turn will have used your time productively.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more -- Annuity.com.

Annuity Lead Solving Means Happy Wife Happy Life

2008-05-12T23:50:00.000-07:00

Have you ever been in the situation where you hate to go home after a hard day of selling insurance? I have.

I know what will be waiting for me, an unhappy wife. It is not that she is naturally that way; it is that she is worried about money, bills and the kids eating regularly.

If you sell anything on commissions then you fully understand. It can be feast or famine. I decided a long time ago to solve this issue. I wanted to come home to a happy wife and to leave the insurance business at the door.

I decided if I had more prospects to talk to than I could see then I would always have someone to sell to. I purposely over flooded my prospecting list with excessive prospects.

I used direct mail, referrals and seminars to provide them all for me. I always had more than enough prospects to see and often I would not get to all of them. Seems like a waste you say?

Not really. If you have an enormous amount of people who you could see then the fear of the Monday morning appointment scheduling was a thing of the past.

It was actually very easy to do and it has resulted in a lifetime of comfort when it comes to prospecting. Here is how I did it.

I borrowed enough money from the bank to fund a large direct mail program setup for 12 months in advance. I would mail 5,000 to 10,000 pieces a month with an average rate of response of 3.5%. The amount would vary based on time of the year such as the holidays. Here is the catch: If I had leads left over I could not get to because of the volume of the response, I would throw them all away. I could do so because I had flesh leads arriving in the mail almost daily. If someone did not want to see me or was hard to see I just chucked it.

It was almost like a breath of fresh air and an enormous amount of freedom. At the end of the year I added up my results and readjusted for the following year. At the end of the first year I calculated I had over 600 annuity leads that I could never get or about 50 a month.

What did I do, reduce my mailings? No I increased them by 50%.

The freedom of unlimited annuity leads for me was a breathy of fresh air. I also learned that if I had enough leads I could come home each night and I was happier which of course made my wife happier. The following year and each year afterward I have estimated that I have left 1,000 annuity leads uncalled and while it may seem a compete waste of time I look at it as the very best money I have ever spent. I have eliminated my need for someone to talk to about my insurance products and at the same time kept my home life happy.

A good lesson is this, ?Happy Wife, Happy Life.?

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity.com.

10 Little Known Insurance leads - Annuity Leads Marketing Secrets to Double Your Income in 2007

2008-05-11T23:09:00.000-07:00

1. Failing to Market Your Business Effectively

This one is self-evident?or so we thought. The reality is 90-95% of all Insurance agents with whom we speak aren?t marketing at the level they can or should be, or just plain aren?t marketing at all! Many agents are in a comfort mode where they are living or dying off the referrals they may accidentally stumble onto. Most agents think they are marketing their services yet, when we ask for a specific, step-by-step marketing plan, the telephone usually goes dead for a minute.

Remember this statement, ?Marketing is the ONLY function of your business that makes you money! Every other function is an expense!?

Thus, if you are sitting back and waiting for a minor marketing miracle to happen and not optimizing your time, money or talents to become a top marketer in your field, you are causing yourself to lose thousands of dollars monthly. This could be one of the reasons why many agents drive cars that have over 150,000 hard traveled miles on them. I still believe insurance agents have a right to make a six-figure income and be able to enjoy life to the fullest. You need to be marketing every day to generate a steady flow of leads.

2. Not Fully Utilizing Your Invisible Insurance leads Asset

If you have been in the Insurance business for any amount of time, you have built up a substantial amount of goodwill among your clients. You have brought value and piece of mind to their lives. This asset, however, hasn?t been performing for you the way it should. We will show you how to convert your customers? goodwill into ready cash?and actually strengthen your customers? loyalty to you at the same time. And if you are new in the business and don?t have a client base we will show you how to use ?parasite marketing? to tap other professional sources within your community.

3. Using the Same Old Insurance leads and Annuity lead Ads that Get a Terrible Return

Ads, postcards, and direct-mail pieces cost you the same regardless of whether they bring in 1 new customer or 100. Knowing the secret techniques of creating award winning ads and direct-mail pieces can easily be the difference between driving an old car with 150,000 miles on it versus driving a brand new Mercedes, BMW or some other luxurious car. By testing and using dynamic headlines in all your marketing pieces (like postcards, ads, newsletters, flyers and direct mail pieces) your response can skyrocket by 1,800% and more. We will show you an easy 7-step method that anyone can use to create ads and direct-mail promotions that will bring in floods of new clients.

4. Failing to Customize your insurance lead Letters

I have had some outrageous responses from prospects and clients when I mail them a hand addressed envelope with a message pad sized ?While You Were Out? message saying, ?Evidently you didn?t get my message.? We have also experimented with several other sayings on the message sized pad ?While You Were Out? mailings that are great for annuity sales. Another agent we know uses this concept to recruit agents and has had a 75% response to his letters using the ?While You Were Out? message pad technique.

5. Relying on One Shaky Pillar for Insurance Marketing

What you want to strive for in your marketing strategy is to build strength through marketing diversity. Think of your business as a Greek Temple supported by numerous, sturdy pillars. Each of these pillars represents one aspect of your marketing campaign. For example, you could have pillars for direct sales, telemarketing, direct mail, postcards, flyers, endorsements, referrals, parasite marketing, and joint ventures. The reason that there are so many is if you have failure in one or more pillars you will always have a few pillars holding up your marketing program. We have had dozens of agents who tell us that if this home office flyer fails, they will be out of the business. This concept will almost guarantee you failure in this business. However, could you imagine the commissions you would generate if you combine a wide array of marketing approaches, stabilizing your business with several pillars?

6. Stunting the ?Growth? of Your Insurance Business

We have read countless books and attended dozens of seminars on how to increase your business. However, we have discovered just three ways to grow any business. Now you may think these techniques are too simple or don?t apply to your situation, but could you imagine if you actually implemented these as a foundation for your business?

1. INCREASE your average sale of an Insurance policy. Instead of quoting $82.00 per month round it off to $90.00 and give them more coverage.

2. INCREASE the number of clients. By doing consistent, target marketing to a niche market, you will increase your sales and client base dramatically.

3. INCREASE the frequency of repurchase. Always have other products you can sell your clients. Always contact your client at least every six months. A monthly, client newsletter will help you build your business. If you need a client newsletter check out our "Annuity Pro Lead Capture Web Page."

7. Investing Thousands of $$$ in the Wrong Insurance leads Ads

Before you invest thousands of hard earned dollars in direct mail, postcards or newspaper ads, wouldn?t it be great if you could know exactly which offer would pull in the most leads and qualified prospects?

What you need to do is conduct your own marketing test. Try mailing two or more versions of your sales letter or flyer to a small portion of your mailing lists you intend to use. One version of a letter might have a powerful headline along with a special free report titled ? 8 Secrets on How You Can Get the most Out of Your Retirement Years.? Also, hand-address the envelopes. Another version of the letter may have a different headline and different benefits. Then, after testing, you can mail the most effective letter to the entire mailing list with confidence.

By the way, if you can have your envelope hand-addressed or the prospect?s name typed on the envelope instead of using a label, you can sometimes increase your response by 15%. People today who receive an envelope with a label on it consider it junk mail.

8. Having a Poor Attitude

Having the right mental attitude will make your business work, no matter how many obstacles get pushed in your way. In any business, there will always be problems that come about and you need to address them. Deal with them immediately, and don?t wonder ?Why in the world do bad things always happen to me?? Bad things happen to everyone. Successful people just know how to work through them. For them, when they have a problem, they put on their work clothes and go to work. They don?t assume the end of the world is coming. Tony Robbins says that the definition of insanity is doing the same things you have always done and expecting to get different results.

Example: If you have been afraid to invest any money in marketing for yourself and continue to do that, your income will remain the same. If you never try to improve your sales presentation, letters or advertisements your results will remain the same.

However, if you are willing to test new marketing approaches and new products, your income will go up. If you will implement the following formula in every sales presentation, letter to your client, and advertisements you will greatly improve your income.

1. Get Attention!
2. Arouse interest and emotion.
3. Tell interesting stories that are believable.
4. Offer a reason to act?NOW!
5. Make it easy for people to take the action you want.

Remember, the most important thing you learn is to: GET PEOPLE?S ATTENTION!

9. Blaming Insurance Marketing ?Conditions? for your Lack of Success

Many Insurance agents who have failed in the Insurance business always blame someone or something for their failure or for a low income. If you want to be successful, not only in your business career but also in your life, you must own up to your shortcomings and realize that your success, or lack of it, is totally, 100% your responsibility!

Have you ever heard anyone, including yourself, say the following: ?It?s a slow time of the year. I think I?ll put more effort in my business after the first of the year. I?m really busy right now. I don?t have time for any new products or marketing techniques. I can?t afford to hire a secretary to do the $8.00 an hour office work that I?m currently doing myself. I tried an ad or flyer once and it didn?t work!?

All of these lame excuses are justification for not being more successful in the Insurance business. From this day forward, stop making excuses and start making things happen for yourself.

10. Not Offering Additional Insurance Products and Services to Your Customers.

It is a known fact that existing clients are far more likely to purchase from you than cold prospects. They will, at least give you a few minutes to offer additional services. Unlike prospects, your clients should trust you and enjoy doing business with you again. However, you must treat your clients with respect and they must be satisfied with your service. If you can provide your clients with the proper service, they can reward you for a lifetime with additional business and qualified referrals. Now let?s talk about specifics.

Many of you have clients or their friends who may be interested in alternative financial products that are safe and pay an excellent rate of return on their money! If that is true for you, our office can help you with several products you can use as an alternative to CD?s and Annuities.

Do you think if you mailed out a postcard offering a special report titled, ?10 Deadly Mistakes Most People Make when Planning for Retirement and How to Avoid them,? some of your clients might respond to this postcard and request a copy of the FREE report? Do you think some of the people who receive your FREE report, (which are essentially sales letters) might want to come into your office for an appointment to discuss these issues? Of course they will and when they do, guess whom they will ask to help them.

It should be obvious by now that if you had additional products or services to offer your clients, a percentage of them will want to hear about several of your new products.

Hope you have a great selling year in 2007.

Russ Jones
Creator of the "3-Step Postcard System"
http://www.ultimateinsurancesystem.com
Developer of the "Annuity Pro Lead Capture Web Page System"
http://www.pmrsystem.com

Medicaid Qualified Annuity, Buyer Beware and Agent Liability

2008-05-09T22:54:00.000-07:00

The need for some clients to protect assets from Medicaid Spend down is obvious. It can be because of the well spouse?s needs, a handicap child or a myriad of good solid reasons. This is where the annuity salesperson come charging to the rescue.

Most agents know that certain types of annuities can avoid spend down and can provide protection for the assets in the annuity. These annuities have specific language to make them fully qualified under Medicaid rules. Most annuity contracts DO NOT contain the language to qualify for the Medicaid rules.

The monthly payout must be for the life expectancy of the annuitant. The annuity cannot have any free look in the contract and the value of the annuity is agreed by all parties to be zero. The only value of the annuity is the monthly income. These features are actually part of the contract and are allowed by 29 states in the US. It is sometime referred to as the ?name on the check rule.?

The personal liability comes into play when an agent does not fully understand the rules nor the process that must be adhered to in order to qualify the funds. An agent will sell ?just an annuity? explaining to the client the funds are safe from spend down. You have to ask yourself why would this happen? The reason is obvious, large commissions.

Commissions for the Medicaid spend down annuity are often very low while the commissions for a standard annuity are usually much higher. The agent will sell the concept of the annuity but provide a product that will never qualify for Medicaid spend down. This is where the liability issue comes to the surface. Of course by then the agent could be on to a different career or the obvious answer is ?I didn?t say that.?

At the time of need the client could be faced with additional stress and maximum exposure to exposed assets. This creates a very unfair situation for the client and the agent is almost never left holding the bag. Then of course there is this sales pitch and explanation.

Recently I ran into a situation where an annuity agent had sold a 17 year surrender contact to a widow aged 77. She was told that the annuity would protect all her assets and she could leave those assets to her children. In a couple of years she became ill and was in need of nursing home car and the annuity was the primary asset. Of course as a single person there was no way to protect the funds in the annuity and with the children, I called the agent. His reply was amazing, he said he knew the annuity was not going to be Medicaid qualified but it was not his problem, it was his ?errors and omissions? problem. He knowingly sold the product for the monstrous commission and had calculated the insurance company would make things right.

The client had to eventually cash in the huge surrender penalty annuity and suffer the losses. She was ill and not up to a fight with anyone and just wanted to be left alone.

The shame of this story is as annuity salespeople we are all considered guilty by the actions of a few. So here is my advice.

? Always work with an attorney who specializes in Medicaid planning

? Never call yourself a Medicaid specialist

? Never give legal advice

? If you sell a Medicaid qualified annuity make certain the contract will work in your state, ask the home office, they are there to help

And finally, be honest and open. Make certain the prospect understands exactly how a Medicaid Qualified Annuity works and how the benefits directly affect them and their personal situation.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity.com.

Use The Adwords Miracle To Get More Annuity Leads

2008-05-09T01:00:00.000-07:00

Working with insurance agents over the years I have found one commonality? they fear technology. Of course, not all do, most of you reading this online article probably don?t? but in my experience I find fear of technology generally to be true. Some agents I work with still refuse to use email.

What they?re missing out on is an abundance of fresh, precision targeted leads that can only be found on the web.

I?m not talking about banner ads or pop-ups ads or email spam, which are so broad that they are rarely effective. I?m talking about keyword advertising. While there are many places to purchase keyword advertising Google?s Adwords system is by far the best. So what is keyword advertising? When you type in a search phrase, annuity leads for example, on Google you will be presented with one page displaying two types of similar results.

Organic:

In the center you?ll find organic results, organic being that the sites did not have to pay to be listed. They?re simply relevant to the search phrase.

Paid:

On the right hand column and directly above the middle results you will see other relevant results in boxes. Those are paid results. Companies pay by the click and bid against one another to be listed there.

The magic of keyword advertising is that you can target your ads directly to what people are searching for. If somebody types in annuities they are looking for annuity information. If they type in annuity agent Spokane, Washington for example, it?s obvious they are looking for a representative in the Spokane area to discuss annuities with. If somebody types in targeted phrases such as these the chances of converting the search to a lead are far, far greater than if somebody is perusing a general website and happens to see a banner ad for annuities. Make sense? In other words, people are looking for you.

Google charges by the click. Depending on your website, landing page and offer you can acquire reasonably priced leads. One offer I ran on Google averaged out to about $7.50 per lead. I converted roughly one in twenty-five to a sale. I made huge returns on my investment and the people wanted to see me. I did not have to sell anything? they were already in the market to purchase an annuity and I simply walked into their line of vision. Easy.

Now here is where the fear part comes in. How do you use Google Adwords? I?m not going to lie; it can be complex, especially if you?re inexperienced with internet advertising. I do not have enough space here to explain all the ins and outs. There can be a lot to it and the last thing I recommend is learning the hard way. You can lose a lot of money fast. To make it easier for you I read several e-books on the subject of setting up, running and maximizing adwords campaigns and the very best, most comprehensive book is Adwords Miracle. This book is not targeted to the insurance industry? it?s actually targeted toward affiliate marketers, but it is entirely useful and the same tips and tactics apply to our industry. In your mind simply substitute affiliate marketing with annuity marketing and presto, it?s 100% relevant.

The book is on the spendier side but with this you truly get what you pay more. You will save the money you spend on Adwords Miracle in the first week of running adwords. The book even covers landing pages and how to build in triggers to get higher conversion rates, which makes it truly invaluable. I heartily recommend Google?s Adword?s system for laser-targeted lead generation and Adwords Miracle as a map to get you there.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity.com.

Think Of Gathering Instead Of Accumulating For Annuity Sales

2008-05-08T01:19:00.000-07:00

Client Gathering

Our goal is to extend our marketing effort with new relationships. These relationships should be with agents who have experience with selling products in the senior market. This vision is to build an interactive client base through the process of client gathering.

Client gathering is much different than client building which is a term associated with large career life insurance companies such as New York Life, Prudential etc. Client Building was a concept by which the agent grew with the client and as the client increased net worth and insurance needs changed the agent was there to provide the insurance products. Studies have shown that this concept when followed to the end would have provided a relationship with 7 direct sales and 20 indirect insurance sales over the course of the agent?s career. This type of selling is arduous and expensive plus it is not especially profitable. It is however profitable for the insurance company because it allows for the careful spacing of different age brackets of the insured. The agent in effect has used his career and effort to make certain the insurance company has hedged itself against changes in attitudes by a single person by spreading out the risk over many different people.

Client gathering is much different. Client gathering is collecting people at the end of their careers when their accumulation process is ending and the need for stabilization becomes the goal.

That is what we do, stabilize.

Everyone at one some time of their lives needs to run to safety. Safety falls into three possible categories.

? Banks or financial institutions
? United States Treasury
? Insurance Company Annuities

Our goal is to assist the client into repositioning their assets into the most stable positions while earning the best possible yield. This is done by educating the client on the benefits they will enjoy with each of these products.

The process of education centers on understanding how the client feels about their life and how their assets could be used to accomplish their goals. By understanding how a prospect feels about their personal assets allows us to determine exactly how safety and security can play a part.

When a prospect decides that safety is the more important goal with their finances then providing stabilization becomes the most important agenda.

Stabilize for safety.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity.com

Generating Insurance And Annuity Leads Using Squidoo Marketing

2008-05-07T04:31:00.000-07:00

Heard of Squidoo? I?ve only been using it a few weeks, but the website has major buzz and justifiably so. The site is an incredible marketing tool. Basically it?s a web page builder? You can build what they call lenses which are simply web pages. Your lense can be about any topic you choose. It could be a professional bio, an article about insurance, maybe you want to review an annuity product or you simply want to show off pictures of your grandkids or pets.

You?re probably saying, great. I can build webpages. Big deal. What you really want to know is how Squidoo can help you get more leads and make you more money. When you setup a Squidoo lens pick search engine key words and phrases people are searching for. You can get a general estimate of keywords people are plugging in on the search engines and how many searches a word or phrase gets every month by using this keyword tool.

Type in annuity here and you?ll see the number of monthly phrases and other related keywords.

These constitute the number of searches performed on Yahoo. Google tends to run 50-100% higher. Plus you have engines like MSN, AskJeeves and the others which provide even more searches.

If ?Annuity? is the key phrase you?d like you would want to attempt to secure www.squidoo.com/annuity. Granted that?s a highly desirable word and (I?ve checked) it?s already taken. But why not secure phrases close to your area? why not grab.

(Note: For some reason unclear to me the Yahoo keyword tool only returns singular words. That doesn?t mean there aren?t plural searches as well? don?t discount plural words and phrases because there doesn?t appear to be searches.)

Google and the other major search engines love Squidoo and tend to rank Squidoo pages very high on their search results. If you get a good ranking and take the time to write useful, original copy with your contact information you will likely pick up leads.

Squidoo is fairly straight-forward and easy to use, but it can take a while to learn. I ended up reading a short very well-written manual to help me navigate the Squidoo system. Check it out: Squidoo Marketing

Squidoo is just another tactic in the neverending quest to obtain leads. It should be a part of a comprehensive annuity lead generating and selling system, not used as the sole method for attracting new business. The best part about Squidoo is that it costs you nothing. It's 100% free to use.

Bill Broich is veteran annuity salesman who helps agents generate annuity leads and close more sales. Visit his website for more information: Annuity

Annuity Marketing Tactics To Sell More Annuities

2008-05-05T23:57:00.000-07:00

I mean it, selling annuities is the easiest sale in the insurance industry. It is all a matter of positioning and having a focus. The focus is simple: numbers. Having lots of people to see and tell the annuity story to is the secret. Leads and lots of them is all that it takes.

Insurance agents all have one thing in common, who can I see today? Many agents even have such a fear of not having anyone to talk to that it makes them almost paranoid. The solution is very simple, do more marketing. Remember, it is all about numbers.

Here is how to do it. Decide on a target market such as seniors age 65 and above as an example. Your target market can be almost anything such as any age group, any income and any asset level. Once you have located your target market then place your marketing plan in motion.

The marketing plan can be built around many different approaches so for the sake of simplicity let?s use direct contact (direct mail.) With your selected target market decide on a subject that will be of interest to this group. A sample topic may topics like this:

? Reduce your social security taxable income
? Protect your assets from nursing home expenses
? New rules regarding your IRA and how to reduce taxes
? Avoid probate cost for your heirs
? Etc. Etc. Etc.

Next select a service to do the marketing so the actual work is outsourced. Numerous choices are available and trying several will help you select one which fits your geographical area and personal approach. A simple Google Search will locate several choices but my personal favorites are (America?s Recommended Mailers, Kramer Mailing Services and Russ Jones)

Next do this, mail 5,000 mailers a month for a solid year. Do not stop and do not evaluate the program for the whole year. Be focused and do not quit. The cost will be approximately $1,300 a month and you should expect a return of about 2%.

Take the expected returns of 100 leads and have a professional telemarketer set your appointments (cost should be about $10 and a little spiff to her/him will go a long way, start small and bonus). If averages hold, you can expect approximately 40 quality leads a month or an average of 10 a week. The leads that you are unable to see place in a drip system and have your telemarketer recall every 2 months for a year. Working 10 quality leads a week for the work year will provide you with 1 (one) sale and the drip system will provide ? sale every other month.

The total sales you should make is 52 plus 6 from the drip system for a total of 58 a year. Next calculate your average premium per sale and for this you may use the industry average of $37,000. Multiply the $37,000 times the 58 sales and your total premium will be $2,146,000.

Multiply the premium ($2,146,000) times the average commission of 7% (varies and should be higher) and your gross income will be $152,220. Now subtract your cost of leads (12 months times $1,300 = $15,600) from the gross income and that will leave you a net income after sales cost of $136,620. You also need to average in the cost of the telemarketer and that will depend on your personal situation but a good rule of thumb should be $500 or so a month.

An annual income of $136,620 will place you in the top .6% of income earners in the United States. And it is all done with a simple process based on numbers. One important type is this; throw away the leads that you cannot reach and those who want to be contacted later. By throwing away the leads will set you free, truly.

There it is, simple, easy and totally manageable. Oh, one other thing, it is very profitable.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity.com

Annuity Marketing Through Gender Separation

2008-05-03T01:48:00.000-07:00

These are really interesting when you break them down. The differences between how men and women look at life. Here are some thoughts.

REMOTE CONTROL. Female.... A device for changing from one TV channel to another. Male... A device for scanning through all 375 channels every 5 minutes.

COMMUNICATION

Female... The open sharing of thoughts and feelings with one's partner. Male... Leaving a note before going drinking with the guys.

Gender selling, is there a different approach? Here are my experiences: Selling annuities can also be separated based on the gender of your prospect. If you are selling to a single female (senior) safety and security is at the top of the list and trying to sell indexed annuities is not a good idea.

Single men are much the same way, generally safety and security is important and I have found that single men are always interested in how much of a monthly income they receive at some future point in time. Single females don?t seem to have this concern.

Now put them together and a whole new chemistry is developed. The male always wants to know how much can they make and to the female it is less important. In a married couples situation an indexed annuity almost always will win and it may have something to do with the hunter/gatherer/nest builder syndrome.

I am not being sexist here, but based on my experiences, men are hunter gatherers and women are nest builders. A nest builder goes through three stages, build the nest (early family), keep the nest tidy (family years) and clean out the nest (later in life).

So it is important to sell to the situation, married couples will almost always have an interest in indexed annuities because of the thoughts and needs of the male. Focus on upswing and yield as a benefit.

? Single females will almost always want safety and security and would not be a good target for an indexed annuity. Focus on safety and security.
? Single males will always have an interest in future income so focus on the benefit of annuitization.
? Married couples will almost always have more interest in how the money can grow. This can always be accessed by who is talking the most. If the husband talks the most then it is an indexed annuity sale. If it is the wife talking the most, then safety and security is the benefit to focus on.

By separating sales concepts via gender separation will in fact provide you an edge in selling annuities. Whatever you do always focus on the benefits an annuity can provide and how those benefits can be of use to your prospects.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity marketing

Secret Phrase for Annuity Selling

2008-05-01T01:06:00.000-07:00

Selling annuities and being able to sell tons of them boils down to a simple concept, being polite. We all want to be nice and want people to be nice to us but being polite is different. I have used this concept for my entire sales life and not only does it work but it becomes the basis of a business plan that is not taught in business schools. And yet it is the full basis for any successful relationship, be polite. How do we use it in our business plan to convert it to sales. If you are basing your sales efforts on building relationships then you are not an annuity salesperson, you are an order taker, an amateur not a professional. How do we begin this process? We do it by learning an very important phrase. A phrase that will transcend your selling efforts to actually becoming a salesperson. What is that phrase and how does it help you to become more successful? The important phrase to learn is ?would it be a bother?? Would it be a bother? What is this actually saying? It is saying may I have permission. It is saying I am polite. It is a link from one subject to another and a powerful tool to change and control a relationship. It does have some limitations and those limitations have to do with your desired target market. If you are working with people who were in their early 20?s during the Korean War, World War II and older as a target market, this is complete power. This generation operated on the premise of ?politeness? ?Would it be a bother? Is based on being polite and can bridge any two subjects and allow you to dig deeper into the relationship. Try this?.?I know Mrs. Jones that you are not in the market for my services but ?Would it be a bother? if I can over this afternoon and just introduced myself?? Dead mortal cinch she will say yes?if she is in this target market age group. You are really asking permission to change a relationship from looking at you as an outsider to one where you may become a friend. ?Would it be a bother? is a bridge from one topic to another and a method to explore more fact finding questions and to seek answers based on how your prospect actually feels. Adopt this attitude into your selling and it will become part of your life. Being polite is the secret of developing suspects to prospects to clients. Once a relationship is developed on being polite almost any question can be asked. With the freedom to ask feeling questions begins the basis of selling annuities. ? Politeness ? Feelings ? Relationships ? Suspects to prospects to clients. It is this approach that sets the true professionals form the rank amateurs. Amateurs make $5ok a year; professionals make $5ok a month. Learn this approach and join the ranks. Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity Selling

More Bottom Life Profits by Hiring a Specialist to Evaluate Your Annuity

2008-05-01T01:03:00.000-07:00

While watching golf on TV the other day I was inspired by the name on the hat that Phil Michelson wore. I Googled them and found out they were business consultants. Their expertise was consulting with medium to large companies to evaluate their business practices and to locate bottom line methods to increase profit. I thought how in the world did I miss this for my little annuity business.

I hired a business consultant to look at all aspects of my business and help me make better business decisions so I can be just like GM, Boeing and United Airlines. The overall cost was a little more than $5,000 and I spent about 2 days answering questions and filling out questionnaires. All the information was entered into their computer and it must have cranked on it for at least a day. The report was mind-blowing; things I had never even considered were introduced to me.
They had evaluated all my expenses and the bottom line were these ideas.

? Send E cards and save on postage.
? Buy all my stationary in bulk based on a 12 month need.
? Use only ATMs that have no fees.
? Cancel magazine subscriptions and use the internet for my news.
? Cancel my whole life insurance policy and replace it with term.
? Make my 2 employees coshare their health insurance cost.
? Cut back on Starbucks and make coffee at the office, quit going out to the coffee shop.
? Buy copy paper in bulk one pallet at a time and make the stationary company store it for me until I need it

I read all 99 of their suggestions and thought... not no, but Hell No!

Who wants to live like that? Who wants to be that extreme. What should I do if I want to have a better bottom line? It was very easy, see only 10 more people in a year and this will result in 1 ? more annuity sales. Based on my average care size of $77,000 this would provide an additional $10,000 to my bottom line. Only 10 more new seens a year! How simple is that?

Here is my plan for expense reduction?.DON?T!!! Life is way to short for this type of bottom line drive.

When your whole focus is on reduction and not sales you become very negative and not proactive. We are annuity salesmen and we need to be active and proactive.

One terrific tax benefit I did receive from my consultant, I got to write off his consulting fee. My attitude is that it is much simpler to sell than to reduce.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity.com

#BREAK# #TITLE#Attention Annuity Salespersons - Control Your Own Destiny#/TITLE#

Sales organizations love to sign you up. Contracting you is one of their greatest joys and why shouldn?t it be. You do the work, you invest your money and they get the cream of the overrides. What do they invest in you?Oh yes I know?.Service! In my book, service is a synonym for greed.

Answer these questions:

? How many times have you had an annuity marketing company attempt to recruit you?

? How many telephone calls and emails do you get each week from annuity marketers?

? How many times has a marketing company offered you free leads as an incentive to contract?

? How many times has a marketing company offered you their ?secret? CD to learn what how the big boys do it?

Insider Secret Number 1:

You control your contracts Here is my very first rule and one I hope you will adopt. Get a pre-release letter! When you contract with a marketing company they forget to tell you about being released in the future!

? What if your situation changes?

? What if you found a marketing system better suited to your personal situation?

? What if you wanted a change?

? What if we did not satisfy your marketing needs?

? How do you get released?

Do not become a slave to your FMO, demand the pre-release, they all will do it!

Insider Secret Number 2:

Most annuity sales marketing organizations do not know how to sell annuities. It is the old saying.. Those that can?t sell, TEACH!

Learn how to sell annuities and how actually market yourself and your business from ?those that do.? This is an easy topic to check out, just ask your FMO how they would make a sale in a specific situation and their answer is always based on product. Try it and see for yourself. If you are committed to working with an FMO, also hire yourself a coach, one who has sold and who can sell. This is the very easiest direction.

Insider Secret Number 3:

Insurance company products are designed for only one reason, to maximize profit to the insurance company.

The newest, latest and greatest annuity is just a new wrapper around the same old product. The insurance company buys bonds to guarantee the performance and no matter how you look at it, the yield and the annuities are all in the same arena. Just more sizzle. If you chase the new products you will be just that ?a chaser.?

Chasers never build a practice, never have anything worthwhile to sell to their clients other than the newest wrapper on the same product.

Be different! Sell annuities based on the benefits they can provide to the owner. The real reason to buy an annuity is not based on yield but on benefits.

Learn these secrets and do as much for yourself as possible. Rely on the FMO as little as possible.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity.com

How a Blind Annuity Insurance Agent Tripled His Income in Just 90 DAys

2008-04-08T02:12:00.000-07:00

Had a phone call from an agent who said that by following these five marketing strategies he went from being blind about marketing to tripling his annuity production.

Check it out...

1. He was blind to the fact that he needed a good quality mailing list to use when he mailed out a series of postcards he received from our marketing system. In fact by following our "3-Step Postcard System" and mailing a 1,000 to 1500 postcards every week his production increased.

In addition, he found by mailing the same prospects at least three times over a three month period his response increased.

2. He was blind to the marketing fact that he had a horrible phone approach and door approach that cost him sales. He took our advice and by using just three key words he was able to set two appointments for every six seniors called who had received his postcard, but never responded to his 800 number or website he placed on the postcard.

These three magic words I've tested for years and I could personally call in the morning just six seniors (preferably widows) and I would have two solid booked appointments for the afternoon.

3. In addition, he learned in my marketing system that he was blind to how to approach prospect at their door. I gave him a door approach that I used when I was full time in the field working that allowed me a 65% in the house ratio for the initial interview. He used this approach with the people who he mailed out the postcards, but never responded to his request for a free report, or a benefit kit.

4. And that's not all...he was blind to the fact how important it was to stay in touch with his current client base on a monthly basis. He uses both our Annuity Pro Lead Capture Web Page and monthly Client Newsletter to stay in touch with his clients.

5. And here's the kicker...he started using our referral technique that gave him an average of three referrals on every appointment.

You will slap your forehead when you learn this technique.

The above five steps allowed this agent to average three solid appointments per day and literally triple his annuity production.

You can read more success stories and also my story how I was a lead junkie and always had 50 new leads a week in my shoebox on my front seat.

Go forth and prosper,
Russ Jones
http://www.ultimateinsurancesystem.com
http://www.PmrSystem.com
http://www.89Million.com (new)

Want More Annuity Sales Leads? Use a Pitch Book

2008-03-30T22:28:00.000-07:00

A ?pitch book? is a short explanation about what you do as a salesperson and a brief insight into our industry and our products.

My pitch book changes constantly as situations in the financial marketplace change but it is always the same. It tells the prospect about me and our industry. I like to keep it fresh and always in movement as situations evolve. This business is very competitive and keeping a pitch book fresh will have an impact on your ability to build relationship quickly.

Here are some tips to building and managing a successful pitch book.

A historical perspective of the past is important. If you are an annuity salesperson then show how annuities have helped so many people in the past. Connect the past to the present with human evolution such as ?Did you know that Benjamin Franklin owned annuities??

A nice touch is to relate the American economy with the possibilities of the future. This allows for your prospect to relate to their present situation w by viewing a longer period of time such as 1950 to 2000. The Dow Jones Industrial Average and the S/P 500 can be very persuasive in making this point.

A good point is to show how world events can affect the financial markets and by showing the possibility of a downside will strengthen the overall presentation. This allows the prospect to understand that there can be times when investments may become more volatile and that a plan that stays the course is a plan that will work over a long period of time.

Third party information is essential. By referring to another source will show credibility to you. These can be newspapers and magazines that are relevant and allow their use.

Explain the process about how you work and the time frames and the steps to working towards a goal. Try and place the client into understanding how this process can be personalized to his situation.

Fully explain your services and what the prospect may expect from you. I always include a list of references in my pitch book and I always give my book to the client as a first meeting gift. If possible package the book in an upscale manner so that your prospect fully understands you are a professional and you expect to be treated that way. By setting the stage in this manner you will remove many obstacles that will appear during the final sales process.

1. Describe how any unique features of your approach that are aided.
2. Close by showing samples of what your thinking might look like if it were pulled together into a plan or specific portfolio for today.

A good pitch book helps point out what you have to offer, how it's different and what you hope to accomplish. Your pitch book will set you aside from other salespersons and by taking the extra step in content and packaging will take a huge step in making your prospect your client.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity.com

Successful Annuity Selling by Becoming a Barber

2008-03-28T22:21:00.002-07:00

Have you ever considered the experience in getting a haircut to the marketing of annuities? They are very similar in the process.

Many agents call me and want me to help a specific case with all sorts of contingency issues. The agent wants to make the sale and if he could get some help on a certain point then the prospect will surely buy. Generally this is a situation where the issues are not as clear and the agent thinks. My experience has shown that resistance to buying is based on one thing?a lousy fact finder.

When I encounter this issue in my own practice and a prospect I think should buy will not then I just use the ?barber syndrome.?

NEXT!

It is so much easier to move on to another sales situation than to beat a dead horse to death. Put your energies to work in marketing and finding new prospects than worrying about one prospect. If they haven?t bought after you presented the solution developed in the fact finder?they are never going to buy from you.

The idea of firing the prospect and moving to the next one is totally liberating. It puts you as the salesperson in control and makes the business model work so much better. Our products are not for everyone and our prospects situation can never be put into a prefabricated mold. By retaining control over who you do business with gives you an attitude of control and professionalism. Do not be afraid to fire a prospect and move on. There is always someone else to see and someone else to tell our story too.

Next!

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity.com

Close More Annuity Sales Leads

2008-03-28T22:21:00.001-07:00

Most agents lose tons of sales because they are so obsessed with talking they forget to listen. They need to tell all about their products features and how great it all is. They can never wait to make their point about how much an annuity can yield. Product Product Product.

The problem is simple, the prospect just doesn?t care. The features of an insurance product are secondary and nothing more. Selling product features makes you an amateur. If you want to be an order taker, go to work for the bank, that is what the tellers do, follow and take orders. Focusing on the ?selling of the product? is what bank clerks do, fill an order.

How do you set yourself apart? Listen and focus on what the prospect is saying because they will always tell you how they feel. Once you understand how they feel then you can provide a product that fits their needs. It is such a simple process, listen and quit talking.

It couldn?t be simpler or more difficult. We all want to talk when in fact listening is a far better way to sell. By asking simple probing questions that elicit a feeling answer is how you place the benefits of the product in line with the feelings of the prospect.

A very simple method of ?feeling? selling is basing the sale on building the relationship. This is easily done by using a track to run on. I prefer a fact finder one in which I can follow a script with the questions in order.

Ask yourself, am I an amateur or am I a professional? Professionals develop relationships based on client needs and amateurs spend their time talking and selling products. Professionals focus their time learning their client needs compared to amateurs who use the sales approach. It is not about the products, it is how the benefits of the product can fill the needs of the prospect. The more questions that can be asked and answered will build the relationship the quickest.

Listen, probe, question?sell.

Bill Broich is a 30 year annuity salesman who helps agents generate annuity leads. Visit his website to learn more - Annuity Sales Leads

The Most Powerful Annuity Lead Farming System

2008-03-27T22:13:00.001-07:00

The Most POWERFUL, Annuity lead MONEY-MAKING Farming System You Will Ever Use.

This is probably the MOST POWERFUL FARMING METHOD you will ever use for getting clients. AND, this one strategy should pay for your course at least 30 times over within your first 3 MONTHS!

One Insurance agent farms an area with a single letter, then follows up with a phone call to a list that has been scrubbed for the ?Do-Not Call List.? 9 times out of 10 the prospect doesn?t remember getting his mailing. Does this sound familiar?

Most agents complain they lose money on mailings like this. Aside from the wasteful ?image? marketing we?ve been duped into believing works, you will generate anywhere from 100% to 500% more response when you use a ?multi-step? farming sequence rather than a single step.

What is multi-step? Simple. Instead of sending simply one mailing, send several mailings in a timed sequence. And by all means ? STOP using the wasteful ?image? farming most agents. The only way you will get the response you?re looking for is to use ARM farming methods.

And if you don?t think multi-step isn?t more profitable for agents, think about this: Let?s say you create a farming piece, and send out 500 letters costing $.50 each. That?s $250. 9 Times out of 10, you?ll get less than a 5 responses. Now your not very happy.

Now, let?s say you decide to mail the same 500 pieces, but with a 3-step multi sequence. This time, you?ll spend $250 X 3 mailings = $750. But because of the effectiveness of multi-step farming, your chances of getting a half dozen new clients are up 500% or more. If you get one annuity sale for $100,000 and your commission is $8,000. Would you spend $750 to get $8,000. Work the numbers. This method works and will continue to work for years to come.

The bottom line is this: AS A FINANCIAL ADVISOR, IT WILL ALMOST ALWAYS MAKE MORE ECONOMIC SENSE TO USE MULTI-STEP A.R.M. FARMING, VS. THE WORTHLESS ?IMAGE? FARMING WE?VE ALL BEEN TAUGHT TO USE.

Here?s how the sequence works:

Letter # 1: Send out on DAY 1 (remember to test a small quantity before spending a lot of money on something ?unproven?!)

Letter#2: Sent out 1 week to 10 days AFTER letter one is sent. You?ll also note that letter 2 refers to letter 1 in its introduction.

Letter#3: Sent out 1 week to 10 days AFTER letter #2 is sent. It also refers to letter #2, and frequently has a ?FINAL NOTICE? headline in it.

You can continue this sequence for as long as it?s profitable for you.

Go forth and prosper, Russ Jones http://www.ultimateinsurancesystem.com http://www.PmrSystem.com http://www.89Million.com (new)

Annuity Selling Tip - Sell to Feelings and Build the Relationship

2008-03-26T23:15:00.000-07:00

I read a new book recently called Secrets to Social Success about how people interact socially and this quote was at the beginning and it sort of stunned me because it is the basis of how I sell annuities.

?The deepest principle in human nature is the craving to be appreciated.? -- William James

I have long believed that selling annuities is about knowing and understanding how people feel. Once you know how they feel it is possible to probe deeply into their personal life and their finances. This goes hand in hand with the need to be appreciated. Appreciation is understanding how another person relates to you, themselves and their surroundings.

Another famous saying is from Dale Carnegie:

?You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.?

Selling annuities is just that simple, being interested in another person enough to fully understand how they feel. The problem of course is how to bridge the gap from a new acquaintance to understanding how another person feels. That is the ?Art of the Deal.?

Selling annuities is learning the art of asking the right questions in order to solicit a feeling response. There are several ways to do this but my favorite has always been to ask someone what they hoped to accomplish and then expanding on that answer. Once someone tells you how they feel it opens a door to ask more and deeper questions that always lead you further into the feelings of the prospect.

In one sense you are really becoming friends with the prospect and the temptation to do so should be restricted. Selling product allows you to have a relationship of counselor/client but deepening into a relationship can be financially awkward for both participants. Remember, the secret to selling anything (annuities) is to understand how someone feels and how our simple products can bring benefit to their lives.

Bill Broich is thirty year annuity salesman who helps agents generate leads and sales. He blogs frequently about the insurance industry and selling. Visit his website for more information: Insurance News

For more tips on creating social success in business and your personal life visit Secrets to Social Success

What Really is a Death Benefit in a Variable Annuity?

2008-03-26T23:14:00.000-07:00

Let?s talk about the basics first. Variable annuities allow the owner to invest in a wide range of options. These options can include stocks, bonds, real estate and a guaranteed fund. The investments are not mutual funds but a close family member called sub-accounts. The money is managed by the manager of each sub-account in accordance with the goal of that account.

Fees and More Fees

Variable annuities are noted for the fees they charge. The average annual expense on variable annuity subaccounts currently stands at 2.08% of assets, according to Morningstar. Many variable annuities also have loads on their subaccounts, surrender charges for selling within, say, seven years and an annual contract charge of about $35.

What Death Benefit?

The death benefit guarantees that your account will hold a certain value should you die. With basic accounts, this typically means that your beneficiary will at least receive the total amount invested, even if the account has lost money. Options are available at an additional cost that will allow your death benefit to increase over a period of time (life insurance). The fees charges for this ?additional benefit? are very high compared to just buying a separate life insurance policy. If additional life insurance is needed in your financial planning it would make much more economic sense to buy a separate policy.

According to LIMRA, an insurance industry research group, only 3 out of every 1,000 variable annuities are surrendered due to death. And this report doesn't even measure whether those four accounts were made whole by the death benefit. If the variable annuities were paid with invested funds then there was no death benefit paid by the insurance company which means all the fees paid to the insurance company would never be needed. The death benefit was paid with the owners own invested assets! Morningstar has calculated the annual fee for this death benefit to average 1.03% on the WHOLE value of the invested dollars in the variable annuity.

The death benefit fees charged to a variable annuity provide a huge benefit to the insurance company because the risk they are insuring is low and over time may vanish to no risk at all. Be informed about how this death benefit on variable annuities really works.

Bill Broich helps seniors manage their retirement money. Visit his website for additional information: Variable Annuities

Flexibility In Your Annuity

2008-03-24T23:04:00.000-07:00

In any financial transaction, whether a debt or investment, flexibility should always be sought out. As with certain debt programs, there are annuities that are highly flexible.

One of the really good things about annuities as a money management and financial planning tool is that there are quite a variety of different forms that they can take to meet individual needs. One of the really good forms is the FPD Annuity. Its main advantage is, well, it is flexible. Since an annuity is a financial contract and is regulated by various laws and by the Internal Revenue Service regarding taxation issues, flexibility is an attractive option.

The FPD Annuity basically allows you to make payments into it when and if you are able to make them. There will be limitations and minimum and maximum deposit levels, but the payments are generally not on a set schedule. If you have a sudden windfall or find yourself with some excess investment capital, you can add it to your annuity. If you pass through a particularly hard period and are short of funds, no payment is necessary at all.

When the annuitization time arrives and withdrawals are going to be made, the amount of the payouts will, of course, be determined by how much you deposited into the annuity and how well it was invested by the Insurance Company that manages it. Most Insurance Companies that have these annuity plans have several different types designed to meet various retirement and investment goals. This allows even more choice for the purchaser, but also requires that he carefully review his own financial goals to be able to best determine the proper package.

The deferred part of the annuity refers to the taxation issue. As with most annuities, the earnings on the money invested are not taxed as they occur. This is a tremendous advantage of an annuity. The fact that the investment earnings are not taxed at the time they are realized means that the amount that would have normally been paid in taxes remains invested. Since an annuity is a long term investment, this means that this extra earnings saved from the tax man is reinvested and compounded over the entire life of the annuity. This can result in a substantial increase in income when compared to a normal savings account.

The only drawback of the annuity is that it does require a bit of self discipline in the individual to realize its best potential. When a person is faced with a mandatory deposit or has funds withdrawn from his paycheck for deposit into an IRA or 401 K plan, it is usually easy and painless. However, a person who is serious about financial planning and determined to make the most of his earning potential to insure security for his family and funds for his retirement can benefit from the flexibility of this kind of investment. As is the case in all annuities, your Insurance Agent will be able to guide you to the plan that is best able to meet your personal budget and goals.

Read more annuity information at UFCAmerica.com

New Medicaid Annuity Rule Enacted

2008-03-23T22:31:00.000-07:00

A small but important change relating to Medicaid annuities was signed into law Dec. 20, 2006, as part of the Tax Care and Health Care Act of 2006. It changed the word "annuitant" to "institutionalized individual" in the section of the federal statute that described annuities intended to be helpful for Medicaid planning.

So what does all this really mean? Essentially, if a spouse who is living in the community (the so-called "Community Spouse") purchases an annuity that meets all the requirements necessary to avoid having that purchase treated as a gift, that spouse must now name the state as beneficiary up to the amount of any Medicaid payments made on behalf of the "institutionalized individual" (instead of the "annuitant").

So who, exactly, is the "institutionalized individual"? Well, clearly if the Community Spouse purchases an annuity, the other spouse, who is in a nursing home, is the "institutionalized individual." As such, upon the death of the Community Spouse, if the annuity has not yet made its final payment, the state will be entitled to receive future annuity payments, up to the amount of the value of all Medicaid benefits it made and will make on behalf of the nursing home spouse.

Prior to this change in the law, repayment in the above situation would have been due only for nursing home expenses of the Community Spouse.

Example: Mary and Dan have $150,000 in assets. Mary lives in the community and purchases a $50,000 Medicaid annuity payable to her. Dan, who is in the nursing home, immediately qualifies for Medicaid, because (i) the annuity itself does not count as an asset for Medicaid eligibility purposes, assuming it is correctly structured, and (ii) Mary's remaining assets are less than $101,640, the excluded amount for community spouses (although some states only allow Mary to exclude half that amount, most states allow exclusion of the full amount).

Two years later, Dan dies. Results:

1. If the annuity pays out completely before Mary dies, then the new law makes no difference, since there is no remainder to go to the state. (This would typically be the case in so-called "half-a-loaf" planning, a topic for another day!)

2. If Mary dies before the annuity is fully paid out, then it will make a difference, because now Dan's costs must be repaid from the remaining annuity payments. Under the prior law only Mary's costs---if any---would need to have been repaid (and if Mary never went to a nursing home, then Dan's costs would never be recouped by the state).

3. If Mary enters the nursing home during the annuity payment period, those payments will go to the nursing home, since they are considered her income. If Mary then dies before the annuity is fully paid out, not only must Dan's Medicaid benefits be repaid to the state, but depending on how the new law is eventually interpreted, it's quite possible that Mary's Medicaid benefits must also be repaid out of future annuity payments.

Note that although this change was just signed into law, the law itself states that it is effective as if it were part of the original law that it is amending. Thus, it applies to all annuities issued after February 8, 2006, the date of enactment of the Deficit Reduction Act of 2005.

K. Gabriel Heiser

Attorney K. Gabriel Heiser has devoted his legal practice to Medicaid planning, elder law, and estate planning for the last 23 years.
NOTE: For more information on this topic and other Medicaid planning techniques, see http://www.MedicaidSecrets.com, which describes an exciting new 256-page book written by attorney Heiser, "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets." You don't have to go broke to get Medicaid to pay your nursing home bills, you just have to know the rules and planning techniques. For the first time ever, you can learn the inside secrets of high-priced estate planning and elder law attorneys, in attorney Heiser's new book.

Charitable Gift Annuity - Immediate, Deferred, College, Flexible Annuity

2008-03-23T22:30:00.001-07:00

For some people, a Charitable Gift Annuity (CGA) is a convenient way to donate funds to an educational, religious or other charitable organization. A Charitable Gift Annuity works very similar to other annuities you might purchase through your insurance company, but in this case you will receive an annuity payment directly from the organization. Typically, you donate a monetary amount to the organization of your choice and then begin receiving payments either immediately or at a predetermined date in the future.

Donations to charities are subject to the charitable tax deduction, and you are entitled to make this deduction on your income tax return for each year you make a new donation. You can choose to receive your annuity payments yearly, quarterly, or monthly, although most people choose quarterly payments. Quarterly payments from a Charitable Gift Annuity are received on the last day of the quarter, not the first.

Similar to other annuity options, Charitable Gift Annuities are subject to state and federal regulations. The American Council on Gift Annuities (ACGA) sets uniform gift annuity rates for use by charitable organizations. These rates set the recommended limits for payout rates to the donor.

If a charity stays at or below these rates, they are not required to justify that their rates are within state regulatory laws. If the charity chooses rates above those set by the ACGA then an actuary is necessary to ensure compliance to the individual state laws. Rates are determined by the age of the annuitant and when the withdrawal period for the annuity begins.

A charity may spend a portion of a donation immediately but must retain enough money in its reserve to satisfy its annuity agreement with the donor. The agreement for Charitable Gift Annuities states that the annuitant will receive fixed payment amounts for their lifetime only and not an additional period of time thereafter for their beneficiaries.

This means that once an annuitant dies, payments cease and the remainder of the annuity is absorbed by the charity. The donor can opt to extend the annuity agreement to an additional annuitant, as with the joint and survivor or two lives in succession options, but the annuity payments will be split between the two individuals and will cease after both parties have died.

DIFFERENT TYPES OF CHARITABLE GIFT ANNUITIES:

IMMEDIATE GIFT ANNUITY

1. If you choose an Immediate Gift Annuity, payments will begin in the payment period immediately following the final contribution date. As mentioned previously, the annuitant can choose to receive payments annually, quarterly, monthly, etc. Depending on when the contribution was made, you can request your first payment to be for the full, and not prorated amount.

DEFERRED GIFT ANNUITY

2. With a Deferred Gift Annuity, the annuitant is allowed to receive payments at a future date predetermined by the donor. The date chosen must be at least one year from the contribution date, but the payout schedule offers the same flexibility as the Immediate Gift Annuity.

COLLEGE ANNUITY

3. A parent or grandparent may want to establish a college fund for a child to offset the rising cost of higher education. In this case, they would donate money for a College Annuity which will only pay out over the lifetime of the child (annuitant). Payments usually begin at age eighteen, or when the child/annuitant is old enough to attend college. The annuitant may choose payments for life or receive larger payments spread out over the number of years they attend school.

FLEXIBLE ANNUITY

4. A Flexible Annuity allows the annuitant to decide the starting date for payments. Usually the annuitant chooses retirement or another date of importance to begin receiving payments. Keep in mind that one factor for the annuity payment rate is age, so you will receive larger payments if you wait until you are older.

HOW DOES A CHARITABLE GIFT ANNUITY WORK?

You may be asking how this works in a real life example. Let?s assume you just turned seventy-five and have $25,000 that you would like to donate to your alma mater as a Charitable Gift Annuity. You opt to receive immediate annuity payments on a yearly basis, and your calculated annuity rate is eight percent. Based on your annuity agreement with your alma mater, you will receive a payment for $2000 every year for the rest of your life, and an immediate tax deduction of over $9000!

This is only an estimate, and your actual deduction will vary according to changing tax laws and changing rates established by the ACGA. You should always consult with a knowledgeable financial advisor such as Estate Street Partners before donating or investing large sums of money to guarantee your rights are protected.

Author bio - Rocco Beatrice, CPA, MST, MBA
Award-winning estate planning & trust expert
MS - Taxation, Master of Science Taxation
MBA - Management / Taxation
BSBA - Management / Accounting
CPA - Certified Public Accountant
-----
Irrevocable Trust Asset Protection, Medicaid Asset Protection
Private Annuity Trust
71 Commercial Street #150, Boston, MA 02109
tel: +1.508.429.0011 fax: +1.508.429.3034

Private Annuity Trust, Ensured Installment Sale (Structured Sale)

2008-03-20T22:57:00.000-07:00

Warning: As of October 18, 2006 Private Annuity Trusts (PAT) are no longer recognized by the Internal Revenue Service (IRS) as legal means for managing assets tax deferred! The Private Annuity Trust has been replaced with The Ensured Installment Sale (Structured Sale), which will be discussed later. The following information applies only to Annuity agreements funded prior to October 18, 2006, which are still honored by the IRS.

PRIVATE ANNUITY TRUST: WHAT IS IT?

A Private Annuity Trust works very similar to an Immediate Annuity, although you will use assets other than money to fund this Annuity. Typically, you transfer ownership of a home or land with high value to a Trust. The Trust agrees to make lifetime payments to you, and can then sell the asset you gave them and use the money to fund this Annuity agreement through investments.

You cannot use other retirement funds such as a 401k to fund a Private Annuity Trust, but you can add multiple properties to increase your tax break and Annuity payment. If you decide to add an additional property to your Private Annuity Trust you must create a new Annuity agreement for each property, unless your original agreement contained a provision to include additional assets at a later date.

Each new agreement will have a different deferral period which creates an added benefit to you by providing both immediate and long term income. The withdrawal period from a Private Annuity Trust must begin by age 70 ?, but you can always choose to receive payments sooner.

When structuring a Private Annuity Trust, you must name a Trustee who will be responsible for controlling the investments of your assets in the Private Annuity Trust. The Trustee can be an adult child, relative, close friend, attorney, or anyone else other than you or your spouse. By law, the annuitant is not allowed to have any direct control over the investments of their Annuity. You may make council to the Trustee but cannot have any direct contact with the assets once they are transferred into the Private Annuity Trust, and your transfer of ownership is irrevocable.

ASSETS TRANSFERRED TO A PRIVATE ANNUITY TRUST: HOW TO ESTIMATE THE ANNUITY PAYMENTS

It is fairly easy to estimate what your Annuity payments will be for the asset transferred into a Private Annuity Trust. The IRS uses the following factors to determine your payment:

1. Your life expectancy

2. The selling price of your asset

3. The Annual Federal Mid-Term Rate (AFMR) effective when your property was transferred (this rate will be the rate used for the duration of your Annuity)

4. The length of time you defer payments

Using these factors, the amount you will receive from an Annuity is a fixed amount and you cannot start and stop payments from a Private Annuity Trust. Once the withdrawal period begins you will continue to receive payments for life.

The ?life expectancy? factor is only used by the IRS to help determine what your payments should be and is not to be confused with a payment ?cutoff? age. If you live beyond what the IRS factored as your life expectancy, you will continue to receive payments for life.

JOINT ANNUITY FOR SPOUSE TO RECEIVE PAYMENTS

Owning a joint annuity will allow your spouse to continue receiving Annuity payments should you die first. After your spouse dies, payments will cease and your beneficiaries will inherit any surplus money remaining in your Private Annuity Trust created by wise investment options of the Trust?s reserve.

By law there must be enough money set aside for the Trust to fulfill its Annuity agreement with you, and there will usually be a reserve account established of five to ten percent of your asset?s value as a safety precaution. Remember, your Annuity payment is fixed and will not increase regardless of profit your assets create via the Private Annuity Trust.

NO ESTATE TAX, INCOME TAX OR GIFT TAX ON PRIVATE ANNUITY TRUST TRANSFER

When you establish a Private Annuity Trust, you are not subject to estate, income, or gift taxes. The transfer of ownership of an asset to a Trust is ?paid for? by the Annuity agreement. The IRS cannot accurately determine your life expectancy, and therefore cannot determine how many payments you will actually receive.

Taxes will be deferred on the transfer until you start receiving payments, and a portion of your payment will be taxed based on your income amount. The transfer of ownership involving your assets is not considered a gift to the Trust because they are agreeing to pay you for the asset at a later date, and as a result you will not have to pay a gift tax.

Once your asset is transferred to the Trust, it is removed from your taxable estate. This is of particular benefit to your beneficiaries who will not be held responsible for paying estate taxes when they receive excess funds from your Annuity. After your death it is the responsibility of the Trust to cover any unpaid taxes due on the assets.

ENSURED INSTALLMENT SALE (STRUCTURED SALE)

The Ensured Installment Sale was developed by the Allstate Insurance Company in 2005 and works in a similar manner to the Private Annuity Trust. The major difference between the two is that when you sell your assets, the Annuity is purchased directly from an insurance company. The insurance company, and not the Trustee for a Private Annuity Trust, is responsible for making investment decisions and ensuring you receive Annuity payments for life.

Author bio - Rocco Beatrice, CPA, MST, MBA
Award-winning estate planning & trust expert
MS - Taxation, Master of Science Taxation
MBA - Management / Taxation
BSBA - Management / Accounting
CPA - Certified Public Accountant
-----
Irrevocable Trust Asset Protection, Medicaid Asset Protection
Charitable Gift Annuity
71 Commercial Street #150, Boston, MA 02109
tel: +1.508.429.0011 fax: +1.508.429.3034

Tax Sheltered Annuity TSA 403b - What is It?

2008-03-19T23:19:00.001-07:00

Tax-Sheltered Annuity (TSA), also known as a 403(b), is an alternative retirement savings plan. Not everyone can participate in this plan, and it is restricted to those who are employed by educational, cultural, or non-profit organizations such as religious groups (also known as 501 (c)(3) organizations).

TAX-SHELTERED ANNUITY BENEFITS

Contributions to a Tax-Sheltered Annuity are done through a payroll deduction and are therefore taken out pre-tax. This feature of a Tax-Sheltered Annuity is very beneficial since your contributions are not seen as income and you may pay less federal tax at the end of the year. A Tax-Sheltered Annuity is also tax deferred during the accumulation phase. This means you will not pay any taxes on the amount you contribute or the interest earned until you begin the withdrawal phase.

If your plan allows, you may elect to contribute post-tax money to your Tax-Sheltered Annuity by using your paycheck. Any money you contribute post-tax must be declared on your income tax return and is not subject to the tax-deferred exemption. When selecting a Tax-Sheltered Annuity you may choose between fixed and variable, or a combination of the two.

It is possible to take loans from your Tax-Sheltered Annuity, but these loans are limited to the lesser of $50,000 or fifty percent of your vested amount. Another feature of a Tax-Sheltered Annuity is the ability to rollover funds into other investment options. For example, it is possible to use your 403(b) to fund your 401(k), Individual Retirement Account (IRA), or another 403(b).

It is important to check any contribution limits or rules established by the new plan administrator before committing to a rollover. If you die before receiving payments, your beneficiaries are entitled to similar options using your Tax-Sheltered Annuity. A spouse is entitled to all of the aforementioned options, while a non-spouse is prohibited from using your annuity money to fund an IRA. A non-spouse beneficiary is only able to transfer funds from one 403(b) to another.

CONTRIBUTION LIMITS OF A TAX-SHELTERED ANNUITY

Unlike a regular deferred annuity, there are maximum contribution limits determined by the Internal Revenue Service (IRS) for each year. Beginning in 2006 the maximum personal (elective) contribution limit was increased to $15,000 per year, up from $14,000 in 2005. Also in 2006, your employer (non-elective) may choose to contribute to your Tax-Sheltered Annuity with a combined maximum contribution limit of $ 44,000.

You may be able to contribute up to $5000 more per year if you are age 50 or older and an additional $3000 per year if you have been with the same company for more than fifteen years. Failure to comply with these contribution limits can result in additional taxes and penalties for both the employee and contributing employer.

TAX PENALTIES OF TAX-SHELTERED ANNUITY AND AGE REGULATIONS

As with the deferred annuity, a Tax-Sheltered Annuity is used to supplement retirement income. If you decide to withdraw money prior to age 59 ? you will be subject to a ten percent penalty by the IRS in addition to the standard income tax. There are a few exceptions to paying this penalty, although specific criteria must be met.

If you leave the service, encounter extreme and immediate financial hardship, or become disabled you can avoid paying the ten percent penalty. Although the ten percent penalty is not enforced in these cases, you are still responsible for paying income tax on the money you withdraw. You must begin taking minimum payments from your Tax-Sheltered Annuity in either the same year as your retire or by age 70 ?, whichever comes first.

Failure to do so will result in a fifty percent excise tax on the money you should be receiving. The only exception to this age restriction pertains to all contributions made to a Tax-Sheltered Annuity prior to January 1, 1987. Anyone who paid into a Tax-Sheltered Annuity before this date is allowed to defer withdrawal until age 75. If you die before the withdrawal period your beneficiaries may receive payouts from your Tax-Sheltered Annuity without paying the ten percent penalty, but they are still responsible for the income taxes.

Regulations on tax compliance change every few years to accommodate inflation rates, and it is important to familiarize yourself with these changes to avoid penalties from the IRS. Helpful resources including articles, worksheets, and an updated FAQ page can be located at www.irs.gov and search for keywords "tax sheltered annuity."

Author bio - Rocco Beatrice, CPA, MST, MBA
Award-winning estate planning & trust expert
MS - Taxation, Master of Science Taxation
MBA - Management / Taxation
BSBA - Management / Accounting
CPA - Certified Public Accountant
-----
Irrevocable Trust Asset Protection, Offshore Asset Protection
Charitable Gift Annuity
71 Commercial Street #150, Boston, MA 02109
tel: +1.508.429.0011 fax: +1.508.429.3034

Offshore Annuity, Deferred Variable Annuity

2008-03-18T23:43:00.000-07:00

An Offshore Annuity works very similar to a deferred variable annuity. The owner pays into the annuity during the accumulation phase using either a lump sum or paying scheduled amounts over a period of time. The money in the annuity will gain interest at a rate determined by the investment portfolios in which it was placed, and either the owner or annuitant will be taxed once the withdrawal period begins.

You should remember that the owner and annuitant do not need to be the same, and for an Offshore Annuity the owner is usually an offshore trust. If the two annuities are so similar, then what is the benefit of having an Offshore Annuity versus a U.S-based deferred variable annuity?

BENEFITS AND ADVANTAGES OF AN OFFSHORE ANNUITY

There are several advantages to having an Offshore Annuity, but they can be easily narrowed down into three main benefits:

1. flexibility

2. protection

3. tax advantages

FLEXIBILITY OF AN OFFSHORE ANNUITY VS DEFERRED VARIABLE ANNUITY

When you choose to purchase a deferred variable annuity you are usually opting to place your money into mutual funds, equity funds, bond funds, etc. The investment portfolio chosen for your money is done by the insurance company you purchase the annuity from, and is limited to venders they have contracts with.

An Offshore Annuity offers more investment options since the overseas advisor can choose to place the money in any of the previously mentioned portfolios, or, for example, they can invest your money in gold. The overseas advisor is not limited by contracts and can invest your money into a number of diversified accounts. Your rate of return is not guaranteed, and is determined by the success of your advisor?s chosen investments.

ASSET PROTECTION AND SECURITY OF AN OFFSHORE ANNUITY

Offshore Annuities offer much more than just increased investment options; they offer a secure way to hide your existing assets from the U.S Government. This feature of an Offshore Annuity is also known as Wealth Preservation. If the offshore issuer of your annuity has no U.S-based affiliations, U.S Courts have no jurisdiction over them or your annuity. This means that anyone wishing to effect a garnishment of your assets must receive permission from the host country where your Offshore Annuity originates.

This is not as easy as it seems since Offshore Annuities are not subject to U.S foreign account reporting requirements. This feature of an Offshore Annuity makes it extremely difficult to link you to any funds other than what you report on your income taxes. It is important to note that while you can be both the owner and annuitant for your annuity, this situation only applies if the owner of the annuity is an offshore trust. (Please note Estate Street Partners and its partners do not ever condone on misreporting on your income.)

FRAUDULENT TRANSFER LAWS ON ANNUITY

If you are both the owner and annuitant, you may be ordered by a U.S. Court to use your annuity to pay a creditor. There are only a few states which exclude annuities from creditors, but you will be subject to fraudulent transfer laws if you obtained the annuity for the sole purpose of hindering or delaying a creditor?s claim.

Having an offshore trust take ownership of your annuity avoids this situation altogether, although it is important to investigate the fraudulent transfer laws of the offshore trust and choose only those which appear investor friendly.

OFFSHORE TRUST OF ANNUITY: WITHHOLD DIRECT ANNUITY PAYMENTS TO BENEFICIARY

Having an offshore trust for your annuity offers you, as trustee, the option of withholding direct annuity payments to a beneficiary. If the beneficiary is affected by a drug or alcohol addiction, or is battling legal issues, you may choose to allocate annuity payments indirectly for their benefit. This is very different from a deferred variable annuity which only offers a direct payment to the annuitant or beneficiary in the form of lump sum or scheduled payments.

TAX ADVANTAGES OF OFFSHORE ANNUITY AND OFFSHORE TRUST

Your Offshore Annuity will grow tax-deferred until you begin withdrawing money, and the U.S Government only requires a one percent excise tax on the premium you paid to implement your Offshore Annuity. Another difference between a deferred variable annuity and an Offshore Annuity owned by a trust, is your beneficiaries do not need to receive payments immediately following your death. Therefore they can delay paying taxes on your annuity until the trust begins distribution of the annuity.

HOW TO PURCHASE AN OFFSHORE ANNUITY? WHO IS IT FOR?

An Offshore Annuity is not for everyone. Most issuers require more than one million dollars to implement your annuity. As previously mentioned, it is wise to have an offshore trust own your annuity. In this case, the offshore trust completes the annuity application and sends it to the issuer. Upon approval you will wire funds to the bank account of your trust, who will then wire the premium to the issuer to complete the transaction.

author bio - Rocco Beatrice, CPA, MST, MBA
award-winning estate planning & trust expert
MS - Taxation, Master of Science Taxation
MBA - Management / Taxation
BSBA - Management / Accounting
CPA - Certified Public Accountant
-----
Asset Protection Irrevocable Trust, Estate Planning
Annuity Types
71 Commercial Street #150, Boston, MA 02109
tel: +1.508.429.0011 fax: +1.508.429.3034

Annuity - Fixed, Variable, Equity-Based Annuity - Deferred, Immediate Annuity

2008-03-18T23:42:00.000-07:00

Annuities are not a new concept, although they have become more complex over time. The first annuities were documented in America during the mid-eighteenth century by Pennsylvanian ministers, and it was not until the early twentieth century when they became available for purchase by the general public.

WHAT IS AN ANNUITY? HOW CAN YOU BENEFIT FROM AN ANNUITY?

So, what is an annuity, and how can you benefit? A simple answer is that an annuity is an agreement between you and your insurance company. Annuities can only be sold by agents specifically licensed to do so, and each insurance company is regulated by individual state insurance commissions. Your insurance agent must possess a life insurance license as well as a license from the National Association of Securities Dealers (NASD) or the Securities and Exchange Commission (SEC).

If your insurance company goes bankrupt, other licensed companies in the state are required to honor your contract. The terms of an annuity are that you will pay a sum of money to the insurer (either a lump sum or series of payments) and they will make scheduled payments to you immediately or delay payments until after a certain period of time.

Unlike your 401(k), annuities grow tax-deferred and you will not pay any taxes to the Internal Revenue Service (IRS) until you begin withdrawing funds from your annuity. Unlike other savings options through a bank which may calculate and charge yearly taxes on your interest, in a tax-deferred annuity your taxes are based only on the final accumulation of your annuity at the time of withdrawal.

ANNUITY TYPES: FIXED ANNUITY, VARIABLE ANNUITY, EQUITY-BASED ANNUITY

In addition to deciding when you will receive your money from an annuity, you can also choose between a fixed and a variable annuity. A fixed annuity guarantees a minimum interest rate while your annuity accumulates, and guarantees equal check amounts when you withdraw from the annuity.

A variable annuity allows you different investment options for your funds, with a mutual fund as the most common choice. A variable annuity offers no guarantee to payout amounts, and your income from this annuity will fluctuate depending on the investment vehicle you chose. On occasion you may be offered an equity-based annuity which determines your interest rate based on an equity index such as the S&P 500.

CHOOSING BETWEEN A DEFERRED ANNUITY AND IMMEDIATE ANNUITY PLAN

Deciding between a deferred and an immediate annuity is a matter of personal preference. If you prefer to save for a long-term goal such as retirement, and have no immediate need for the money, you should consider a deferred annuity. It is important to remember that if you choose this type of annuity there are penalties for early withdrawal. The IRS imposes a standard ten percent penalty, in addition to income tax on accrued funds, if you withdraw money before the age of 59 ?. Your insurer may also charge you surrender fees for early withdrawal.

3 METHODS FOR REQUESTING PAYMENT FOR DEFERRED ANNUITY

If you wait until retirement to withdraw money, there are three methods for requesting payment from a deferred annuity. You can:

1) Request a lump sum payment or

2) Take out money only when you need it or

3) Annuitize and receive a set dollar amount every month for as long as you live

Most people choose to annuitize because it also spreads out the required income tax payments. If you die before withdrawing from the annuity your beneficiaries are entitled to receive the balance of your annuity by these methods as well, although if they choose a lump sum they will be charged all the tax on your accrued interest at once.

IMMEDIATE ANNUITY IF CLOSE TO RETIREMENT

If you are close to retirement, or already retired, an immediate annuity is a wiser financial choice. Immediate annuities must be purchased with a lump sum since payments will usually begin within one month of purchase. When you purchase an immediate annuity you are guaranteeing a steady income for the rest of your life, or for a predetermined time period. When you receive payments from an immediate annuity you are only taxed on the earnings from your initial investment. The part of your check that is the principal is not taxable.

3 MAIN OPTIONS FOR WHEN YOU RECEIVE AN ANNUITY PAYMENT

There are three main options to choose from when receiving an annuity payment.

1) The first is Income for Life which guarantees you a set income for the duration of your life, but payments will cease upon your death. This option is risky since you don?t know exactly when you will die. Should you die before your annuity has been completely paid out, the insurance company, and not your beneficiaries, will receive the remainder of the annuity funds.

2) The second payout option is Income for Life with a Guaranteed Period. This option is more appealing because it provides the same coverage as the first option, but if you die before the predetermined guarantee period expires, your beneficiaries will continue to receive payments until the guarantee period ends.

3) A third option is known as the Joint and Survivor option. This option guarantees payment to you and another person, usually a spouse, until both of you dies. Annuity payout options are flexible and any of these options can be combined to fit your individual needs.

DOWNSIDES TO AN ANNUITY

Annuities may also be used to fund your 401(k), 403(b), and Individual Retirement (IRA), although it is not generally advised to use your annuity for this purpose. The two downsides of greatest concern are a contribution limitation, and the federal government requirement for you to begin receiving minimum payments by age 70 ?. Additionally, once you have used your annuity to finance your 401(k), for example, you will incur a ten percent penalty for early withdrawal if you take money before you reach age 59 ? and there are few exceptions to paying this penalty. Once you begin receiving annuity payments you cannot change your mind, and you will continue to receive payments for the predetermined time frame established during the accumulation phase.

author bio - Rocco Beatrice, CPA, MST, MBA
award-winning estate planning & trust expert
MS - Taxation, Master of Science Taxation
MBA - Management / Taxation
BSBA - Management / Accounting
CPA - Certified Public Accountant
-----
Asset Protection Irrevocable Trust, Offshore Asset Protection
Will Contest: What is it? How can you Protect a Will?
71 Commercial Street #150, Boston, MA 02109
tel: +1.508.429.0011 fax: +1.508.429.3034