Yes, I know that the MYGA (Multi Year Guarantee Annuity) market is hot. With the Fed steadily raising rates over the last year, the marketplace has seen an explosion in fixed annuity business. And with the inverted yield curve, the short term rates are even better than long term rates! Lastly, with the stock market being rocky, clients are flocking to guarantees. While all of this equals great returns for short-term planning for your clients, we shouldn’t lose focus on long-term goals.
I’d like to re-introduce you to the “other" MYGAs. I’m talking about guaranteed lifetime withdrawal benefits, or income riders. In my opinion, right now is the perfect time to sell these GLWBs. The products give your clients GUARANTEED growth to the income account value and GUARANTEED benefit payouts for life.
I know many of our agents stopped promoting income riders to their clients during the bull market times of the last ten years. Historical projections looked fantastic due to illustrations relying heavily on returns of the last decade. But times have changed. Consumer attitudes have changed. Many clients believe we will have a recession soon and a topsy turvy stock market will continue. So what’s the solution?
We need to get back to income planning by asking our clients, “How much do you need and when do you need it?”When we know this, we can solve for how much premium we need to put into an index annuity with an income rider to pay out that needed benefit for life. Of course we’re still tied to an index, since these are index annuities, and we’ll be able to capture significant returns when the stock market does bounce back. But you’re protecting your clients from another downturn, should it happen.
In conclusion, I think we need to look outside of the short-term MYGA market and look to solve your clients’ long-term income planning needs. Call the Ohlson Group so we can help design your client’s next Personal Pension Plan to solve their biggest problem – GUARANTEED lifetime income!