Rescuing Your Underperforming Annuity Account

It was only a few years ago that interest rates plunged to historic lows. Conservative investors who needed guaranteed income and preservation of principal were in a bind. In many cases, returns at the bank were below two percent and fixed annuity accounts yielded only marginally better. Many of these cautious investors purchased fixed annuities rather than bank instruments in order to capture higher returns.

How times have changed. The United States economy improved significantly. Inflation pressure grew, and the Federal Reserve began to ratchet up interest rates while treasury yields increased in kind. While much of this was good news, it created problems for the annuity purchaser from just a few years ago.

Concerns with Older Annuity Accounts

If you invested in a traditional fixed annuity account during these low yielding years, you may find yourself in a dilemma. The problem: many of these accounts have fallen to their guaranteed minimum yields. Currently, they might only offer a paltry return between 2 and 3.5 percent. There are several reasons for this decline. To begin with, many annuity accounts have a first year bonus that will not be paid in subsequent years. In addition, these accounts often provide a floating rate of return. Their returns are not locked in. A floating rate annuity is quick to go down in years where yields are decreasing, but slow to come back up when yields in the treasury market increase. In essence, if you purchased an annuity in the lean years, you may have locked in poor yields for the duration of your account.

There are other issues as well. If your annuity has not reached maturity, you will have to pay surrender penalties if you cash in the account early. In addition, if you purchased a non-qualified annuity account, you may have accumulated tax deferred interest. Should you transfer your annuity to anything another than another annuity account, you could have income tax to pay. Taxes and penalties will quickly lower your account value upon early surrender.

How to Improve Your Fixed Annuity Returns

Rest assured ─ this is not a story of doom and gloom. The fix to this problem is simple. You simply exchange your old annuity for a new account. Rates have increased dramatically over the last three years, and newer annuities can lock in much higher yields. Furthermore, it may be a wise decision to lock in rates with a guaranteed fixed yield as oppose to a floating rate of return.

Unless your account is very new, the higher guaranteed yields can more than make up for any surrender penalties your may have. A sizeable account can accumulate thousands of additional dollars by making this change. (It is important to note that many economic pundits are already predicting that the Federal Reserve Board will begin to lower rates in 2007. This will most certainly force treasury markets and annuity yields lower for those who have not locked in higher rates.)

Income Taxes on Tax Deferred Interest ─ 1035 Exchange

Additionally, if income taxes are a concern, you should understand that taxes are not due if you transfer your old non-qualified annuity to a new annuity account. This is why owners simply transfer from one annuity to another in what the I.R.S. has deemed a 1035 tax-free exchange. Income taxes will only be due if and when you decide to take out your interest. If yours is a retirement account (also called a qualified account) you can simply perform a rollover. If done properly, (with the help of an experienced agent and/or accountant), a qualified rollover is not a taxable event either.

In summary, no longer do you need to dread your quarterly annuity statements. There are several reputable insurance companies providing very reasonable guaranteed returns. These products will provide you with higher yields, potentially shorter durations, liquidity and peace of mind. An annuity rollover or 1035 exchange can be a wise investment choice.

A.M. Hyers has been working in the insurance and investment industry for nearly ten years. He owns and operates Ohio Insurance Plan, an independent insurance agency doing business in Ohio, Missouri and Georgia.

His agency offers products to individuals, families and any size employee group. They use the leading national insurance carriers to offer quotes, illustrations and relevant information on life insurance, health insurance and HSA accounts. They also offer disability and long term care insurance as well as annuity policies, Medicare supplement plans and Medicare Part D coverage.

Visit them at:
http://www.ohioinsureplan.com
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First Rule In Annuity Seminars: Fill The Room

You need to fill the room because perception is everything. If you begin your Safe Money Seminar with empty tables and chairs in the room, those people who do show up will question whether they should have. The trick is to gauge attendance based on RSVPs. If you have 40 RSVPs for the event, figure 30 will show up. Then set the room up for 20 to 25. It sends a more prosperous message when you have to break out additional tables and chairs to accommodate the overflow. "Standing room only" is your perceived image. On the other hand, having empty seats at your meeting is just lame.

Holding your retirement planning seminar at the right restaurant will help fill the room. A safe bet is an Olive Garden style restaurant. Avoid Mexican food, Chinese food and pizza joints. Limit dinner choices to one: a salad with a single entr?e of general appeal. You can't go wrong with a chicken and pasta plate. Include a glass of ice water at each place setting. That's it; no iced tea or Coca Cola. Never pass out menus, and limit waitress involvement to serving the food then disappearing.

In choosing a restaurant, stop by several possibilities around 4:30 on any given afternoon. If you see a lot of Seniors there, it means they like that restaurant and are familiar with it. Just make sure your entree is a notch above the typical early bird special.

Always remember that a Safe Money Seminar is not a teaching event and not a sales event. It's a social event! Now that you've managed to fill the room, don't set it up like a classroom or like a horseshoe. Set the room up just like people sit in a restaurant - 2 per table or 4 per table at most. And don't think it's you they're coming to see. It's your food they're coming to eat. You are just the dinner show. Remember, you must get people to (a) like you and (b) respect you, if they are to give you that all-important appointment. Now that you've gone to so much trouble setting the stage, go out there and show them your star power!

The most effective form of advertising to fill the room is direct mail invitations. Direct mail allows you to target your demographic. You can sort your mailing list by several parameters, but age (60 plus) and address (within 5 miles of the restaurant and your office) are all that really matter. Wedding style invitations look nice and cost around 75? each. Simple post card invitations cost around 30? each and often wind up under a refrigerator magnet for future reference. Surprisingly, both wedding style and post card invitations pull about the same. But with post cards you can mail approximately 2 ? times the quantity for the same money.

Expect between a .75% and a 1% response on your mailings. By mailing 10,000 pieces, you'll get 75 to 100 RSVPs, of which around 50 to 70 will come out to your two seminars. This will fill the room with 25 to 35 attendees per night, which keeps it cozy and gets you up close and personal.

Another way to boost your response rate is to add emotional appeal to your invitation's headline. For example, which headline gets your attention better? (a) "You're Invited To Our Safe Money Seminar" or, (b) "Five Serious Mistakes That Wipe Out Retirement Savings, And Simple Ways To Avoid Them." The answer is B. Few people will show up to a Safe Money Seminar. We don't use our seminar's name in the invitation because it's not an emotional draw. But once the people are in their seats, stop teasing them and start rewarding them. "Ladies and gentlemen, welcome to our Safe Money Seminar," is now music to their ears. Remember, people act on emotions then justify their actions with logic.

The seminar business is all about working the numbers and setting enough appointments so that if one or two should cancel (which they will) what you get is an unexpected but much needed break between eager, pre-sold prospects. As always, keep your eyes on the prize: This is a career objective leading to seven figures annually. Fill the room, set the stage, make a million. 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.

Structured Settlement Annuity Buyer

Annuities are one of the most important and inevitable and lucrative policies for the well being of the senior citizens of America. However, at some crossroads of life one might need to have their future to be planned in a proper way, especially during and after the retirement phase. The best time to buy an annuity is age 55 or older. An annuity is the ideal life planning tool for a senior citizen that comes up to him or her with all the advantages near the end of his life.

A structured settlement annuity is a particular kind of an annuity plan that has its own advantages and disadvantages. A structured settlement means ?by the obligation of a payment that is deferred?. This type of annuity results from the settlement of a personal injury lawsuit. Usually a structured settlement annuity buyer has to make his or her payments over a considerable time or over a period of several years. This kind of annuity plan varies from personal injury accidents and such other mishaps to product liability. It is the fundamental right for a citizen to receive the amount of compensation that he or she deserves if he or she is hurt for some other person. Therefore various insurance companies and agencies buy annuity plans. This plan would be valuable enough to pay a combination of principal and interest over a long period of time. This payment is even possible on the conditions of restrictions regarding the schedule of disbursement.

There are a number of structured settlement companies, however, that offer a number of flexible, individually tailored plans. This is a great leap for those who are structured settlement recipients in receiving a considerable amount of money for their future payments. In one word, a structured settlement helps one to meet today?s needs, turning the future and distant payments into the money one needs today.

Annuity Buyer provides detailed information on Structured Settlement Annuity Buyer, Annuity Buyer, Annuity Buyer Payments, Annuity Buyer Guides and more. Annuity Buyer is affiliated with Condos For Sale.

Fixed Indexed Annuity: Bank CD Alternative

A fixed indexed annuity (FIA) is the product of choice for top selling annuity agents who are tired of seeing their clients lose money in low interest rate CDs. A fixed indexed annuity is a hybrid fixed product that is fast becoming the new "safe home" for billions of former CD, stock market and mutual fund dollars. And with good reason.

HOW IT WORKS

A FIA provides a safety net of usually 1-3% interest compounded annually. But this is just the minimum guarantee through the contract term. The upside earning potential is much higher. As the name implies, the fixed indexed annuity is tied to an equity index such as the Standard & Poor's 500. The S&P 500 is the benchmark for U.S. equity markets, representing the general health of the overall stock market. As the market goes up your client's earnings go up because they participate in a percentage of the increase. But (and this very important) when the stock market comes back down again as it always does, your clients don't lose any money.

WHAT WAS THAT AGAIN?

This bears repeating. When the stock market goes up, earnings go up with it subject to a cap. But when the market comes back down again as it always does, the policy does not lose any money. Earnings are locked in at each annual anniversary index point. FIA owners earn 2 or 3 times the guaranteed interest rate when the stock market goes up, and when the stock market comes back down again they get to keep all profits. Upside earnings without the downside risk. How cool is that?

TAX DEFERRED GROWTH

What's more, your client's earnings grow tax deferred as long as they stay in the annuity. This means they earn even more money on the portion they don't have to send Uncle Sam. Unlike a CD, there is no Form 1099 to add to income tax returns each year. Why pay taxes on income you don't spend? Seniors citizens are especially fond of Fixed Indexed Annuities since deferred interest is not counted as provisional income and can reduce or eliminate taxation of Social Security benefits. FIAs are also becoming the favorite funding vehicle in small business retirement plans like the 401(k) and SEP-IRA.

WHAT TO DO?

Whether you sell to retirees or future retirees, you owe it to yourself to learn why millions of people are moving billions (actually, trillions) of dollars into fixed indexed annuities. They're the sensible alternative that can make you very large commissions.

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. See also Insurance-Lead-Programs.com

Fixed Annuity Quotes

People are of two minds about where is the best place to get fixed annuity quotes. Some would say that the best place to get fixed annuity quotes is at the place where you actually intend to buy the insurance as you get all of the information that you need to know "direct from the horse's mouth" as they say. The quotes are direct and would accurately reflect what the institution or insurance company has to offer you as a deal on that day.

Others say that the best way to go about getting fixed annuity quotes is to get them from a broker or look them up on one of the many sites on the World Wide Web that will allow you to compare fixed annuity quotes in nicely designed, easy to read charts. There are absolutely scores of sites on the Internet run by insurance brokers that specialize in comparing fixed annuity quotes specifically so don't be afraid to take advantage of your search engine box to find the rates that are best for you.

The reason that getting them from a broker or a brokerage site is a good idea is that you will get a larger selection or idea of what is actually out there when it comes to fixed annuity rates and terms and conditions. However the fact is that some web sites or brokers are of course there to represent the best interests of their affiliates. In order to make a decision some of these brokers may slant their reviews or assessments of different plans in favor of what they are selling.

Another thing to look out for when shopping for fixed annuity quotes online are claims that seem too good to be true. Don't trust any broker that asks for your social insurance number, banking account number or credit card number by email. This means that you could be a potential victim of identity theft. To avoid this type of grifting you might also want to consider getting your quotes by phoning a broker or by talking to one in person.

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

Finding a Buyer of a Structured Annuity Settlement

If you receive a big insurance settlement (such as a personal injury settlement) or win the lottery then it might be a good idea to find a buyer of structured annuity settlement. An annuity settlement means that even though you have won a big jackpot or been awarded a huge sum of cash that you will only see a small sum of it that is sent to you by check once a year. This is where a buyer of a structured annuity settlement can come in handy especially if you want to take advantage of all of your winnings at once.

A buyer of structured annuity settlement winnings will offer you a big lumps sum payment so that you don't have to wait to be paid over a period of several years or even decades. In a way you could perceive this type of annuity as a kind of cash advance for the winnings you would have received in the future.

Keep in mind that doing a deal with a buyer of a structured annuity settlement is not necessarily that profitable. They in actuality keep the majority of your winnings. For one thing the buyer will be receiving all of the interest on the money as it is collected for many years. You on the other hand may be tempted to splurge all of your winnings or insurance money at once.

Still opting for a structured annuity settlement is a good idea for individuals who need a huge lump sum of cash to take care of immediate physical needs which is often the case with people receiving large insurance settlements as the result of personal injury or medical abuse.

Tiffany Walker has finally revealed her annuity secrets online. Read the latest by clicking here: Buyer of structured annuity settlements.

The Variable Annuity and Retirement Planning

Over the years, there has been much debate on why an annuity should not be used for retirement planning. However, we will save that debate for another day. The annuity got its first big break in the retirement business when TIAA-CREF introduced the variable plan in 1952. Today, the variable annuity is used in many other forms, including the 403B, 457, and the traditional, Roth, Simple, and Sep-IRA. We will discuss some of the features and benefits of the annuity. Earnings inside the variable annuity grow on a tax-deferred basis and are subject to a 10% early withdraw penalty before age 59 1/2, except with a few exceptions including: separation from your job at age 55 or older, when money is used to pay medical bills exceeding 7.5 % of your Adjusted Gross Income in a given year, etc. Also, the variable annuity generally has a death benefit. Usually, the annuity's death benefit will pay the named beneficiary the greater of the premiums paid into the account minus any withdraws or the current account balance. For example: if you invest $100,000 in a variable annuity and upon your death, your account balance is only worth $30,000, your beneficiary will receive $100,000 minus expenses and withdraws, but taxes may be due at that time (this applies only to annuities with this specific death benefit). The variable annuity usually has several separate accounts. One of the advantages of the variable annuity is the chance for diversification, in spite of limited dollars. If a person has only $3000 to invest in a Roth IRA and wants a portfolio to match their risk tolerance, this can generally be attained in a variable annuity. The separate accounts in a variable annuity represent large, small, mid-cap, international investments, bonds, or indexes like the S& P 500 or the Russell 2000.?Often a person would have to pay a $1000 to a mutual fund company, in order to have the same offering of diversification. You can usually switch between fund families in a variable annuity without paying another sales charge, unlike some mutual funds. While everyone might not need a variable annuity for retirement, some people enjoy its features. The death benefit of some of these annuities allow some individuals to leave an inheritance without the worry of market loss. However, be mindful that a variable annuity is subject to retirement rules and regulations, just as one's IRA or 401K at work. *Disclaimer: This article does not constitute financial advice. Always consult a tax advisor or financial advisor when making investment decisions.?

Mr. Jason Cunningham is the author of many articles at Financial-Shopper-Network.Com and Financial Shopper Network Blog

Making A Rational Decision About A Structured Settlement Annuity

It is very easy to become aghast by the sheer volume of e-mails, web sites, tv and journal advertising and legal talk when considering the issue of structured settlements or annuities. We will investigate what, exactly, a structured settlement is so that you are better able to understand the concept and be able to make a rational decision.

To begin, let's explore just what a structured settlement is. It is simply a series of guaranteed disbursals - also known as annuities - made over a certain period of time and is usually the result of an injury settlement or another situation in which you are awarded access to a substantial whole amount of money. It is the alternative to accepting an upfront lump sum.

Structured settlements are individualized arrangements meant to help you cover present and forthcoming expenses. By working closely with an experienced attorney or financial advisor you can determine an effective structured settlement to give you the security of a fixed income over a set period of time. This can help you sleep better at night by taking a huge burden off your back.

There are various types of these annuities. You can learn more about them over at http://www.fixmyannuity.com, but here is a brief explanation of each. This is by no means a complete list, but should give you a fair idea of what is out there:

A certain Period Annuity has a certain period of time for the payments to be paid out. They can be made monthly, quarterly, semi-annually or annually. Upon your death, all remaining payments are made to you beneficiary.

A Life Annuity will make periodic contributions for a guaranteed number of years (based on your life expectancy) or for life, whichever is up first. Again, the beneficiary receives any remaining disbursals should you die before the full whole amount is paid.

A Temporary Life Annuity will pay you for a designated number of years if you are still living, so your annuity ends when you die. There?s no provision for a beneficiary to collect remaining disbursals.

In a Life Contingent Lump Sum you?ll receive a lump sum, provided you are alive on the due date. If you die before this date, your beneficiary is not entitled to the whole amount.

Finally, with Lump Sum Option you can set it up to receive the lump sum on a particular date, say, fifteen years from now. Your beneficiary will receive the lump sum on the future date if you have died before then.

So which type is right for you? The best advice we can offer is to do your fact-finding work. Discuss your situation with your financial advisor and family. That way when you make the decision you'll know what your getting and have considered all the options.

Yvonne Volante, the author, is a big fan of annuities and proper planning and writes for fixmyannuity.com, which is the premier annuity resource on the internet. You can see all of the articles over at http://www.fixmyannuity.com