Refinancing Your Client's Retirement Using Premium Bonuses on Fixed Index Annuities

When you hear the word refinancing, you probably immediately think about a mortgage. If interest rates drop or there's an opportunity to improve the situation, you take a look at what you currently have and see if there's a better option available. I think we should be looking at our clients' retirement money the same way. There are a lot of clients sitting in annuities they purchased five, ten, or even fifteen years ago. At the time, those products may have been exactly what they needed. But that doesn't necessarily mean they're still the best fit today.

That's where some of the premium bonuses available on fixed index annuities can become really interesting. 

Depending on the product and the client's situation, a premium bonus may help offset some or even all of an existing surrender charge, while giving the client an opportunity to move into a product that may better fit what they're trying to accomplish today. With S&P 500 index strategy rates near all-time highs, cap lock features and strong lifetime income payouts, there are folks in your client file whose policies could be improved simply by transferring the funds to another carrier.

Maybe they're looking for better accumulation potential. Maybe income has become more important as they've gotten closer to retirement. Maybe their legacy goals have changed. Or maybe the annuity they purchased years ago simply doesn't offer some of the features available in today's marketplace. Obviously, we're not replacing an annuity just because there's a bonus. Any replacement has to make sense for the client when you look at the entire picture, including surrender charges, surrender periods, benefits they're giving up.
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But that's really the point of the refinancing conversation.

We're not saying the client's existing annuity was a bad decision. We're simply asking whether the retirement strategy they put in place years ago is still the best strategy for them today. As agents, I think that's a conversation worth having with every existing client. Take another look at those older contracts. Find out what they own, what their current goals are, and what options are available today. You may find opportunities sitting inside your existing book of business that you didn't even realize were there!

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Until Next Time – Good Selling! 

​Joseph R. Ohlson, LUTCF
President
1-877-844-0900
[email protected]