Secret Phrase for Annuity Selling

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

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

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
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Annuities - Don't Put Your IRA In A Variable Annuity

If you?ve talked to a broker or agent about rolling over your retirement account, there?s a good chance the advisor recommended you invest in a Variable Annuity. Don?t do it! I believe the only reason a variable annuity is recommended for an IRA is so the advisor can earn more money. Let me explain.

There?s a high probability that if an advisor doesn?t recommend an Equity-Indexed Annuity for your IRA rollover, a Variable Annuity will be recommended instead. ?There are so many advantages to a variable annuity versus a mutual fund?, you?re told. I disagree. It?s advantageous for the advisor, not the investor.

In this article, I?ll debunk the two main arguments used in selling variable annuities. First, that you don?t pay a commission and secondly, the importance of the death benefit guarantee. I?ll explain how you pay dearly for both.

One of the main sales ?hooks? used in selling a variable annuity is that you don?t have to pay a commission. That can be very compelling when compared to a mutual fund in which you pay the all the commission up-front. Many advisors will even say that they get compensated by the insurance company, not you. Do you really believe that?

Insurance companies are not charitable organizations. If they are paying the broker, they?ll recoup those costs from you?the costs are just hidden so you don?t think you?re paying a commission.

The second main argument for using a variable annuity for an IRA is the death benefit (not offered with a mutual fund). ?That way you?ll never have to worry about your beneficiary getting less than you invested?, the thoughtful advisor says. This feature may seem nice, but you end up paying through the nose for it.

With all variable annuities there is a Mortality and Risk Expense (M&E) charge. Most variable annuities sold through commission-based advisors have an M&E charge of 1.45%. This is an annual fee that is charged against the entire value of the account, not the original investment. On a $500,000 investment that amounts to $7,250 the first year. If your account doubles in 10 years, you?d pay $14,500 that year.

Note that the M&E charge is in addition to the underlying money management fees charged by the people actually making the investment decisions. Their fees can range from .70% to 1.5%. All told, the fees associated with most variable annuities range from 2-3% per year. That?s a 2-3% hole you start in each year. That?s $10,000-$15,000 each year on a $500,000 investment?and that expense increases as the value of the account increases.

Do you really think it costs $10,000-$15,000 a year to cover the cost of the insurance associated with the death benefit? Of course not. The full $500,000 in our example isn?t really being insured, either. They?re only insuring the amount of loss. So if the investment loses 10%, the actual amount of ?insurance? is $50,000. Even when the investment is worth more than you paid you continue to be charge M&E.

So the death benefit associated with a variable annuity is either the most expensive insurance you?ll ever buy, or it pays for more than insurance. The M&E is where the insurance company makes their money. More importantly, the M&E is where the insurance company gets paid back the money it paid your advisor in commission. Here?s proof. The M&E on variable annuities offered by Vanguard (in which no one earns a commission) is about .60%. That?s over three quarters of a percent less than the 1.45% being paid to the commission-based advisor.

The real reason that you are recommended a variable annuity for your IRA isn?t that it?s better for you. It?s because it?s better for the advisor. If you invest $500,000 in a commission-based mutual fund, the advisor?s gross commission will only be about $10,000. The same investment in a variable annuity would yield gross commission to the advisor of $30,000-$35,000 or more!

If an advisor can earn 3 times more by getting you to invest in a variable annuity instead of a mutual fund, which do you think will be recommended?

Don?t fall for the ?put your IRA in a VA? trap. You are smarter than that.

Get free, clear, and unbiased advice by sending your questions to http://www.guardingyourwealth.com/askjeff.htm

Mr. Voudrie is a Certified Financial Planner, nationally syndicated newspaper columnist and President of Legacy Planning Group, Inc., a Private Wealth Management Firm in Johnson City, TN. He can be reached toll-free at 1-877-827-1463.

Nationally-syndicated financial columnist and Certified Financial Planner? Jeffrey Voudrie provides personal, in-depth money management services and advice to select private clients throughout the USA. He?ll answer your financial question ? FREE at http://www.guardingyourwealth.com

Annuity FAQ: Answers To Some Basic Annuity Investing Questions

* How much should I invest in an annuity?

The amount of money that you invest in an annuity will depend largely on your capability to pay the premiums offered by the assurance company. Things to consider when putting money to an annuity include:

- Your probable financial needs

- Type of investment portfolio

- Alternatives available

The most important thing to consider is your financial needs, especially at times when you really need cash to finance something like the birth of a child delivery or an unforeseen accident or illness. However, you must also consider the regulations on withdrawal against the annuity, because it can be a bad scenario if you find yourself being served a penalty just because you withdrew large amounts from your annuity account when it was not permitted on the plan you purchased.

* What is a deferred annuity?

A deferred annuity pays out to investors interested in getting an income from an annuity, but who want the payments to begin some time in the future, usually at retirement. Or, they may want the insurance company to invest the money for a few years to increase the payments. A tax deferred annuity allows income tax to be deferred until the money is withdrawn, and you can contribute as much money yearly as you like.

* What is an immediate annuity?

An immediate annuity is an investment policy usually purchased from an insurance company. Immediate Annuities are sometimes known as Single Premium Immediate Annuities. Immediate annuities are commonly purchased with a lump sum and used as a retirement investment. In an immediate annuity, the investor begins to receive lump sum pay-outs anywhere from immediately to one year from the date of purchase. Generally, payments begin one month after investing in the annuity.

Immediate annuities can be fixed or variable. While a fixed immediate annuity payment depends on the amount you contributed, your age, as well as the interest rate at the time or purchase; a variable immediate annuity depends on the type of investment purchased.

There are a variety of different options available to you when purchasing an immediate annuity. You can decide whether you would like a set period of payments or a lifetime of payments. You can also decide on whether the payments are solely for the person who holds the policy or also for a secondary person, such as a spouse.

* What are the advantages of annuities?

There are three principal advantages to an annuity:

1. Tax-deferred accumulation. This allows you to set aside the funds that you pay into the annuity for as long as you want, without worrying about exceeding federal tax limits.

2. Flexibility. An annuity can offer you a variable or a fixed return, unencumbered by federal tax limitations.

3. Security. An annuity offers a fixed-income payout option which would grant an income that cannot be outlived.

* How will I receive my annuity payments?

There are several pay-out methods available when you begin receiving annuity payments. With some options, you or your beneficiaries can select how you want to be paid. The following are some of these:

You can get income for your entire lifetime even when the money in your annuity account has been used up. This is advantageous if you live to an advanced age because it will maximize the income that you will receive. However, there is a risk involved: when you die, all the money cannot be claimed, even by your assigned beneficiaries. If you die young, you simply lose this money.

Another is the joint and survivor annuity where it pays you during your lifetime, and after your death your beneficiary (usually your spouse) will also be paid during his or her lifetime.

You can also refund your annuity, meaning you're gaining income for life. However, when you die, the portion if the income payments that you have not collected will be the only amount that your beneficiary receives.

Alex Trenor is editor of Annuity Yes, the online guide to Annuities. He also writes Annuity FAQ's for PrettyGreatAnswers.com.

Annuity Cost Basis and Previously Taxed Money

Before you think of withdrawing any money from your annuity you should look into what type of annuity cost basis is defined in your agreement with the life insurance company. This is because if you are not careful you could easily exceed your annuity cost basis and be taxed heavily from borrowing from the policy.

You should also examine the annuity cost basis before you buy an annuity of any kind as it could impact how much you might have to pay if you had to withdraw that money for an emergency one day. After all one never knows when a sudden illness or accident may require digging into your retirement money.

Technically the annuity cost basis is defined as the initial payment or premiums that you paid out when you purchased a nonqualified annuity. In this scenario you have already paid taxes on the money so you will not be taxed to the gills if you have to withdraw the money.

Sometimes the annuity cost basis is not taxed upon withdrawal. This is particularly true if it was not fully taxable n the first place. This means the cost basis would be minus the amount that is non-taxable by the government.

It is a good idea to look at the fine print of any life insurance offer to see what the conditions are when it comes to your cost basis. You need to look to see how much of your money will not be taxed upon withdrawal.

Another valuable thing to know is that most insurance companies insist that any withdrawal that you make from your annuity must come from what you have earned first. After that any amounts that exceed your cost basis will be taxed as ordinary income is and if you are under the age of 50 years, an additional ten percent in federal tax will also be slapped upon your withdrawal.)

Tiffany Walker has finally revealed her annuity secrets online. Read the latest by clicking here: Fixed Annuity Choices.

Life Insurance Settlement Finds Hidden Cash For Annuity Purchase

A life insurance settlement may hold the hidden source of cash to fund your next fixed indexed annuity sale. Every agent on the planet who is actively selling annuities has heard the objection from a prospect, "I love your concept, but all my money is tied up." Of course, your comeback is to motivate Mr. & Mrs. Prospect to move at least some of their funds into the safety of an FIA. But if and when you find yourself out of bullets, please do not part company without taking a final shot with something like, "One last thought before I go. We sometimes find that retirees may have an old life insurance policy they're still paying on, or that may even be paid up. Oftentimes the reason for taking it out so long ago has changed because life circumstances change over the years. I have a way to 'repurpose' this kind of dormant asset for usually more than its cash value, and apply the money toward your retirement needs today..."

Eureka! Suddenly your dying sales interview springs back to life with the prospect of using the settlement on a life insurance policy as found money.

Actually, before life insurance settlements (also known as viatical life settlements), there were two options when a senior had a life insurance policy that was no longer needed. He or she could either let the life insurance policy lapse or cash it in for its surrender value.

Now seniors have an excellent opportunity to capitalize on their current life insurance policy using a life settlement solution. Such life insurance settlements allow seniors to cash in their insurance, but in a new way. Instead of cashing in their policy with the issuing life insurance company, they can work with a bonded life settlement broker to cash in their policy with a financial institution that will pay more.

Simply put, the transaction is a buy-and-sell exchange between a policy owner and an investor, facilitated by a bonded life settlement company or broker. The policy owner deals directly with the broker who negotiates on his or her behalf. There is no fee to the seller. The broker's job is to package and present the deal for competitive bidding. Financial institutions bid for the best portfolio investments. Once limited to the terminally ill, senior life insurance settlements have evolved into a unique opportunity for today's mature market. And it works for individuals, businesses and charities.

Dollar amounts are based on the death benefit, not the cash value. Ideal life settlements are a percentage of the net face value (death benefit minus outstanding loans and accrued interest) and are always greater than any cash surrender value. For example, one recent case involved a 74 year old male with a $420,000 term life policy, no cash value. The life insurance settlement broker converted the policy to whole life. The purchasing investor took over premium payments. The happy client tucked a tidy $68,000 into his equity index annuity. And the agent socked away $12,600 commission on the life insurance settlement (3% of the policy death benefit) plus $6,120 commission on the FIA. Not a bad day's pay.

When your prospects need a little prompting on the reasons for using a life insurance settlement to fund an equity indexed annuity, suggest the following:

* Beneficiary is deceased and coverage is no longer needed, or beneficiary is financially well off and no longer in need of death benefit for survival

* Premiums are no longer affordable

* Estate size has changed and policy coverage amount is too large for estimated estate taxes * People are living longer. Retirement income needed over longer period

* Better quality of life with greater cash flow

In its simplest form, your clients can receive more money in the secondary market than from their life insurance company. They avoid paying surrender charges from the insurance company and no longer need to make premium payments.

All of this may sound simple, but resources, time, and experience are essential. A bonded life insurance settlement company should have all the tools to make sure that your client's settlement is completed properly and efficiently. While InsuranStar.com neither endorses nor recommends any life settlement solution or senior life insurance settlement broker, as an annuity producer and Wholesale Distributor I've worked with one bonded life settlement broker whom I can recommend with confidence. Please feel free to contact me for a trustworthy reference.

http://www.Free-Insurance-Leads.com Gary Le Mon is a wholesale distributor of fixed indexed annuities for Allianz, American Equity, Sun Life Financial, and ING. Author and developer of the Safe Money Seminar, a financial planning seminar for Seniors, Gary serves as guest speaker on behalf of agents and agencies nationwide. He is coach, mentor and motivator to

Annuity Basics

Annuities can be very good things for some of us and a disaster for those of us who have not been made aware of the pitfalls and traps that in turn can easily befall them. Since most people have or are going to look into annuities as a retirement or and an investment vehicle, make sure it fits into today's needs and parameters. It has to be right for the times we are in and it needs to be periodically revaluated for tomorrow's world.

Precautions to be taken when buying annuities:

1. One should not Buy Annuities With Long Surrender Periods:

People are talked into buying an annuity that locks up their money for an excessive period of time with a surrender period that is longer than another comparable annuity with similar interest rates.

2. Do not fall for First Year Bonus Interest Rates:

Some annuity companies offer you a 'bonus' or 'bonus interest rate' on your first year deposit into an annuity.

3. Understand exclusion rations and the value of a partial 1035 exchange.

This is a rather complicated subject because there are enormous variables in determining how to properly structure your annuity contract from day one so as to maximize the taxable exclusion ratios when and if you decide to take an annuitization income from your annuities in the future.

4. Do not use small companies with questionable financial ratings

An annuity by definition is a contract guaranteed by an insurance company. Annuity consumers sometimes forget this and buy and annuity without factoring the claims paying ability of the insuring company. This does not only apply to the questions of solvency or bankruptcy but to the more subtle effect it might have ones contract. If an annuity company has financial trouble it most likely will not go bankrupt (even though it is a possibility) because of the various government regulatory groups that monitor annuity companies. But what can happen is the annuity company will lower the rates at which it credits interest to your account in order to make up its losses in other areas of its business.

5. Know the guaranteed cover per person per insurance company

One needs to know if an insurance company goes broke what is the guaranteed cover per person per insurance company is available .One should not invest more than that in the fixed or guaranteed annuities and the variable annuities are not covered. Because if they broke then one may get stuck or spread the amount between different insurance companies.

6. Consider the shortest penalty free surrender date The next thing you have to consider is getting the shortest possible penalty free surrender date term as possible so long as the interest rate is better than any CD.

Lastly and most importantly get the best professional help, one who will always tell you "like it is" even if its sometimes hard to listen too and even harder sometimes to act upon.Mansi gupta writes about annuity basics .