When Does a Joint Payout Election Make Sense?
Typically, annuity income riders are structured to favor single lifespans, resulting in a vast majority of payout elections covering a single life. But this approach doesn’t always make sense for married clients—especially considering there’s a 45% chance that a wife will outlive her husband by five years and an 18% chance by 15 years.* For couples who share income and expenses, a single life payout election could leave a surviving spouse without an essential ongoing income stream.
When to consider recommending Single Life Payout:
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When to consider recommending Joint Life Payout:
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If you want a leg up on your competitors, consider the power of quoting both single and joint life payouts for your married clients. A common income rider misconception is that there will be a dramatic income difference between single and joint payouts. But with the Ameritas Life Insurance Corp. FlexMark Select® Fixed Index Annuity and MyFit Income Rider® or MyFit Income Rider With Booster,** you can offer your married clients the potential for guaranteed income for the length of both of their lives, without a large dollar reduction in annual payments.
As these examples show, the difference between single and joint annual payout can be minimal—especially when spouses are the same age. When there is an age difference between spouses, it’s important to consider not only the annual payout amount, but also the total amount the clients may receive (and need!) over time. By offering this perspective, it shows that you care about taking care of their long-term needs.
7-Year Deferral (MyFit Income Rider, $100,000 Qualified or Nonqualified)
| Payout Election | Issue Ages | Spouse Age Difference | Annual Level Payout | Annual Payout $ Difference | Life Expectancy† | Total Payout at Life Expectancy† |
|---|---|---|---|---|---|---|
| Single Male†† | 60 Male | NA | $8,671 | NA | 16.49 | $142,984 |
| Joint Spousal | 60 Female 60 Male |
0 Years | $8,109 | - $562 | 18.89 | $153,179 |
| 55 Female 60 Male |
5 Years | $7,226 | - $1,445 | 22.94 | $165,764 | |
| 50 Female 60 Male |
10 Years | $6,182 | - $2,489 | 27.13 | $167,717 |
Hypothetical examples assume $100,000 starting value, no withdrawals, and no step‐up on FlexMark Select and a current 7% compound Premium Accumulation Rate, and 0.95% annual rider charge on the MyFit Income Rider. Hypothetical examples further assume Single Life or Joint Spousal option, gender, and ages as shown in the table. Hypothetical examples are not reflective of actual annuity performance. Past performance, whether actual or hypothetical, does not guarantee future results.
10-Year Deferral (MyFit Income Rider, $100,000 Qualified or Nonqualified)
| Payout Election | Issue Ages | Spouse Age Difference | Annual Level Payout | Annual Payout $ Difference | Life Expectancy† | Total Payout at Life Expectancy† |
|---|---|---|---|---|---|---|
| Single Male†† | 60 Male | NA | $11,213 | NA | 14.40 | $161,467 |
| Joint Spousal | 60 Female 60 Male |
0 Years | $10,524 | - $689 | 16.57 | $174,383 |
| 55 Female 60 Male |
5 Years | $9,541 | - $1,672 | 20.49 | $195,495 | |
| 50 Female 60 Male |
10 Years | $8,360 | - $2,853 | 24.60 | $205,656 |
Hypothetical examples assume $100,000 starting value, no withdrawals, and no step‐up on FlexMark Select and a current 7% compound Premium Accumulation Rate, and 0.95% annual rider charge on the MyFit Income Rider. Hypothetical examples further assume Single Life or Joint Spousal option, gender, and ages as shown in the table. Hypothetical examples are not reflective of actual annuity performance. Past performance, whether actual or hypothetical, does not guarantee future results.
Running a joint quote may give you an advantage over other agents and help your clients achieve their retirement goals. Visit the Illustrations/Calculators page of LegacyNet® to compare rider payouts for your clients, or call the Legacy Sales Team at 800-395-1053, Ext. 4002.
In approved states, FlexMark Select Index Annuities (Form 2705) and riders are issued by Ameritas Life Insurance Corp. (Ameritas) located at 5900 O Street, Lincoln, NE 68510. Products are designed in conjunction with Ameritas and exclusively marketed by Legacy Marketing Group®. Ameritas and Legacy Marketing Group are separate, independent entities. FlexMark Select Index Annuities are single premium deferred annuities that offer a fixed interest option and index interest options. The index options are not securities. Keep in mind, your clients are not participating in the market or investing in any stock or bond. Policies, index strategies, and riders may vary and may not be available in all states. Optional features and riders may have limitations, restrictions, and additional charges. Product guarantees are based on the claims-paying ability of Ameritas Life Insurance Corp. Refer to brochures for additional details. FlexMark Select and MyFit Income Rider are registered service marks of Legacy Marketing Group.
Withdrawals may be taxable and, if taken prior to age 59½, a 10% penalty tax may also apply. The information presented here is not intended as tax or other legal advice. Ameritas, Legacy Marketing Group, and their authorized representatives do not give legal or tax advice. It is recommended that tax advisers be consulted.
Information gathered from external sources is believed to be reliable; however, we make no representations as to its completeness or accuracy. This information should not be construed as investment, legal, or tax advice. Unless otherwise specified, any person or entity referenced herein is not an affiliate of Ameritas or any of its affiliates.
| * | Society of Actuaries (SOA) Age Wise Longevity Infographic Series – 1, https://www.soa.org/research/age-wise/ (2019). |
| ** | Income riders are not available with certain tax-qualified plan types. Upgraded income riders are available for an annual charge of 0.95% for the MyFit Income Rider and 1.05% for the MyFit Income Rider With Booster (not available in all states). |
| † | Life expectancy of younger spouse when payouts begin. Based on the Social Security Actuarial Life Table, https://www.ssa.gov/oact/STATS/table4c6.html, as of 11/7/2019. |
| †† | Gender-specific rates and factors not applicable in all states and situations. |
| LMG4177v1119 | FOR AGENT USE ONLY. NOT FOR USE WITH CONSUMERS. |
FUSION Strategysm:* A Cure for the Low Rate Blues
During this period of historically low rates, are you struggling to find an indexed strategy with strong performance potential that also responds to client concerns about low renewal rates? Look no further than Americo Financial Life and Annuity Insurance Company’s FUSION Strategy. Illustrating a net average annual return of 6.75%** for the last 10 years on the LibertyMark® SE 10 fixed indexed annuity, the FUSION Strategy deserves a closer look.
This game-changing new five-year strategy—also available on Americo’s ClassicMark® and FutureMarksm FIAs—features a fixed rate on gain that locks in for the first four years plus uncapped participation in the five-year performance of the Index (if positive), providing clients with the best of all worlds:
- Certainty of crediting rates that are locked in for five years, plus ...
- Opportunities for annual crediting and multi-year upside.
The engine behind the FUSION Strategy—the proprietary SG Columbia Adaptive Risk Allocation Index—is the result of a powerful collaboration between Société Générale, one of the largest European financial services groups, and Columbia Threadneedle Investments, a leading global asset manager. The SG CARA Index is designed to seek consistent returns through (1) globally diverse investments, (2) a 5% volatility mechanism, and (3) a market state model that automatically adjusts allocation based on current market conditions. To learn more, watch this three-minute video or visit www.sg-columbia-index.com.
Before presenting the FUSION Strategy to clients, be sure to run an illustration and bring along a product kit that includes our NEW “Understanding the FUSION Strategy” brochure. For more information, including sales tips, call the Legacy Sales Team, 800-395-1053, Ext. 4002.
LibertyMark 7, 10, 10 LT, SE 7, SE 10, SE 10 LT (Contract Series 411/4196/4205); LibertyMark 7 Plus, SE 7 Plus (Contract Series 411/4191/4196/4205); LibertyMark 10 Plus, 10 LT Plus, SE 10 Plus, SE 10 LT Plus (Contract Series 411/4179/4196/4205); ClassicMark 10, 10 LT (Contract Series 411/4190/4204); ClassicMark 10 Plus, 10 LT Plus (Contract Series 411/4179/4190/4204); FutureMark 10, 10 LT (Contract Series 416/4416). Products are single premium deferred fixed indexed annuities underwritten by Americo Financial Life and Annuity Insurance Company (Americo), Kansas City, MO, and may vary in accordance with state laws. Products are designed and exclusively marketed by Legacy Marketing Group®, an independent, authorized agency of Americo. Some products and benefits may not be available in all states. Certain restrictions and variations apply. Consult contract and riders for all limitations and exclusions. On FutureMark, the Optimizer Fee of 1.00%, and on LibertyMark, the Liberty Optimizer administrative fee of 1.00–1.75% (depending on the product version selected), will be deducted from the Accumulation Value at the end of each contract year, including the first. LibertyMark and ClassicMark are registered service marks, and FutureMark and FUSION Strategy are service marks, of Legacy Marketing Group.
The SG Columbia Adaptive Risk Allocation Index (“Index”) is the exclusive property of SG Americas Securities, LLC (together with its affiliates, “SG”). SG has contracted with Solactive AG to maintain and calculate the Index. “SG Americas Securities, LLC”, “SGAS”, “Société Générale”, “SG”, “SG Columbia Adaptive Risk Allocation Index”, et al. (collectively, the “SG Marks”) are trademarks or service marks of SG. SG has licensed use of the Index and the SG Marks to Americo Financial Life and Annuity Insurance Company (“Americo”) for use in fixed indexed annuities. SG has licensed use of certain marks from Columbia Management Investment Advisers, LLC or its affiliates (collectively, “Columbia Management”) and sub-licensed use to Americo. Neither SG, Solactive AG, Columbia Management nor any other third-party licensor has been authorized to act as an agent of Americo or has in any way sponsored, endorsed, sold, promoted, structured or priced any fixed indexed annuity or provided investment advice to Americo. Such parties make no representation regarding the advisability of purchasing, selling, or holding product linked to the Index, including Fixed Indexed Annuity and shall not be liable for any related loss or payment thereof. Obligations to make payments under the fixed indexed annuities are solely the obligation of Americo. Neither Americo nor SG are obligated to invest annuity payments in the components of the Index. The Index levels are net of a 0.50% annual maintenance fee, calculated and deducted daily. The Index also deducts fees to cover rebalancing, replication, and other costs. The total amount of these fees is unpredictable and depends on a number of factors. These fees and costs, which are increased by the Index’s leverage, will reduce the potential positive change in the Index and increase the potential negative change in the Index. While the volatility control applied by the Index may result in less fluctuation in rates of return as compared to indices without volatility controls, it may also reduce the overall rate of return as compared to products not subject to volatility controls. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. Additional information is available at www.sg-columbia-index.com.
| * | The FUSION Strategy, also known as the SG Columbia Adaptive Risk Allocation Index Point-to-Point (Without Cap) With Amount on Gain, is not available on 7-year products or in NH, NJ, or PA. |
| ** | Hypothetical example assumes 89% participation rate and 4% fixed rate on gain, net of 1.75% Liberty Optimizer Fee on LibertyMark SE 10. Rates effective November 22, 2019, and subject to change. Example further assumes a new contract is issued for $100,000 at the start of each 10-year calendar period over the past 20 years and held for 10 years with no withdrawals. Participation rate and fixed rate on gain may be higher or lower but the participation rate is guaranteed never to be less than 5% (may vary by state) and the fixed rate on gain is guaranteed never to be lower than 0.50%. The Liberty Optimizer Fee applies at the end of each contract year, including the first. Keep in mind that past performance is no guarantee of future results. Any such example must not be regarded as guaranteed or as an estimate of future performance, unless it is based solely on the minimum guaranteed interest rates. Results prior to the Index’s actual existence on September 7, 2018, are simulated and based on back-testing. The results obtained from such back-testing should not be considered indicative of the actual results that might be obtained from an investment in the Index. The actual performance of the Index may vary significantly from these results obtained from back-testing. |
| LMG4177v1119 18-625-12 (11/19) |
FOR AGENT USE ONLY. NOT FOR USE WITH CONSUMERS. |
What Went Up May Come Down ... Act Now!
Heads up! Given today’s low interest rates, it’s likely that Americo’s minimum guarantee will be changing from 1.6% on 100% of premium* to 1% on 100% of premium for all contracts issued on or after January 1, 2020. We encourage you to get your Americo new business issued before December 31, 2019, to ensure your clients receive the higher minimum guarantee.
Of course, no matter what happens, Americo fixed indexed annuities offer one of the strongest minimum guarantees in the industry—with powerful upside potential beyond that!
For sales positioning to promote the current rate, call the Legacy Sales Team at 800-395-1053, Ext. 4002.
Products are issued by Americo Financial Life and Annuity Insurance Company and exclusively marketed by Legacy Marketing Group®. Some products and benefits may not be available in all states. Certain restrictions and variations apply. Consult contract and riders for all limitations and exclusions. Policies and riders have limitations and exclusions.
| * | Available upon death, surrender, or annuitization, less any withdrawals, surrender charges, and applicable premium tax. Rate for contracts issued in 2019. |
| LMG4177v1119 18-625-12 (11/19) |
FOR AGENT USE ONLY. NOT FOR USE WITH CONSUMERS. |
Funding Acceptance and Trust Ownership Decoded
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I’m looking for a strong fixed index annuity to offer my clients who have qualified money. What type of funding and trust ownership do you accept? |
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Legacy’s carriers have individual funding and contract ownership requirements. Refer to the below matrix for a handy guide. |
| Americo Financial Life and Annuity Insurance Company | Ameritas Life Insurance Corp. |
|
| Fund Type | ||
| Nonqualified money | Yes | Yes |
| Nonqualified Stretch | No | No |
| 401(a) | No | Yes (no GLWB) |
| 401(k) | No | Yes (no GLWB) |
| 403(b)/TSA plan | Yes (non-contributory only) | No |
| 457(b) | No | Yes (no GLWB) |
| 501(c) | No | No |
| Defined benefit plan | No | No |
| Keogh (HR-10) plan | No | No |
| Money purchase plan | No | No |
| Profit sharing plan | No | No |
| Traditional IRAs | ||
| Rollover IRA (Traditional) | Yes | Yes |
| Custodial IRA | No | No |
| Inherited IRA | Yes | No |
| Nondeductible IRA/Taxable IRA | No | No |
| Self-directed IRA | No | No |
| SEP IRA | Yes | Yes |
| SIMPLE IRA | No | Yes |
| Spousal IRA (Living spouse assumes deceased spouse’s IRA) |
Yes | Yes |
| Roth IRAs | ||
| Roth IRA | Yes | Yes |
| Roth IRA Conversion (Full) | Yes | Yes |
| Roth IRA Conversion (Partial) | No | Yes |
| Backdoor Roth IRA | No | No |
| Designated Roth/Roth 401(k) | No | No |
| Inherited Roth IRA | Yes | No |
| Self-directed Roth IRA | No | No |
| Spousal Roth IRA (Living spouse assumes deceased spouse’s IRA) |
Yes | Yes |
| Ownership | ||
| Charitable Lead Annuity Trust | No | Yes |
| Charitable Remainder Annuity Trust | No | Yes |
| Charitable Remainder Trust | Yes (no Heritage Maximizer) | Yes |
| Charitable Remainder Unitrust | No | Yes |
| Corporation | Yes (no Heritage Maximizer) | Yes |
| Irrevocable Trust | Yes (no Heritage Maximizer) | Yes |
| Family Limited Partnerships | No | No |
| Revocable Trust | Yes (no Heritage Maximizer) | Yes |
If you have a client with a scenario that’s not listed here, please contact the Legacy Sales Team at 800-395-1053, Ext. 4002.
Have a question for the Legacy Sales Team that you’d like considered for the next issue of On the Mark? Ask us at onthemark@legacynet.com!
Products are exclusively marketed by Legacy Marketing Group®. Some products and benefits may not be available in all states. Certain restrictions and variations apply. Consult contract and riders for all limitations and exclusions. Policies and riders have limitations and exclusions.
| LMG4177v1119 18-625-12 (11/19) |
FOR AGENT USE ONLY. NOT FOR USE WITH CONSUMERS. |
Thinking of Advertising?
We encourage you to promote the strong features and benefits of our products. In fact, our online Ad Catalog offers an assortment of preapproved advertisements that can be personalized with your contact information for free. If you’d prefer to create your own advertisement, remember that Legacy and/or carrier approval is needed before using advertising materials promoting Legacy and/or the carriers or products we represent. This applies to materials used for prospecting clients and for recruiting agents. “Blind ads” (ads that mention product features but don’t necessarily name the product or carrier) still need prior approval.
Approval is also needed for all material used to generate interest in our carriers’ products, including general descriptions of annuities or of how annuities might be used to further particular financial objectives. This applies to all media, including e-mail, websites, print, social, and video. Don’t risk an ad violation (which could result in a fine up to $10,000 and termination). For more information, see Legacy’s Advertising Guidelines on the Compliance page.
Five Facts About Patrick Perez, Legacy Facilities Administrator
- Patrick has been with Legacy for TWO decades, filling multiple roles along the way. After starting in the mail room, he went on to support various company needs, from marketing supply and new business to phone support and policyholder services. Today, Patrick is a staple on the Facilities Team, as he wears many hats—managing our inventory of marketing collateral, ordering company supplies, and covering the reception desk. His face is often the first you see!
- Prior to joining Legacy, Patrick was an active member of the United States Army—committing 21 total years to air defense and medical services before retiring. He lights up talking about his experiences and teachings, and it is apparent that he still has much pride in the time he spent in between active duty and the reserves. On behalf of everyone here at Legacy, thank you for your service, Patrick!
- What Patrick enjoys about his role today is also what makes him so good at it. When we have a new product rollout, his job includes printing, storing, managing inventory, and handling shipments of related marketing materials. He excels at these tasks and finds the project of filling orders rewarding. In fact, he says he “likes to not be able to keep up with orders!” Hint, hint ...
- The people at Legacy are what excite Patrick the most about working here. He enjoys collaborating with employees on various teams throughout the office. The foundation of family and the teamwork involved takes him back to what he greatly appreciated about the armed services and leaves him feeling fulfilled.
- Speaking of family, Patrick met his now wife while working at Legacy many years ago and they have since had two children. The fact that Legacy is a family business is what really resonates with Patrick. When you have that environment and feeling, “it is different, and special,” he says.
Holiday Schedules and Year-End Processing Requests
We want to help you finish the year, the decade in fact, strong! Please note these important dates and plan accordingly to ensure your business is submitted in time to count for 2019. For questions, please contact Legacy’s Suitability Help Desk at 800-395-1053, Ext. 5819, or SuitabilityHelpDesk@legacynet.com.
Office Closures—In observance of the holidays, there are office closures to note for each of the Legacy, Americo Financial Life and Annuity Insurance Company, Ameritas Life Insurance Corp., and NTT Data offices.
| WHEN? | WHO? | WHAT? |
|---|---|---|
| Nov. 27 | Americo | Closing at 3:30 p.m., Central time. |
| Nov. 28, 29 | Legacy, Americo, Ameritas, NTT Data | Closed for Thanksgiving. |
| Dec. 17 | Legacy | Closed noon to 1 p.m., Pacific time, for employee Christmas feast. |
| Dec. 24 | Legacy, Americo, Ameritas | Closed for Christmas Eve. |
| Dec. 25 | Legacy, Americo, Ameritas, NTT Data | Closed for Christmas. |
| Jan. 1 | Legacy, Americo, Ameritas, NTT Data | Closed for New Year’s Day. |
If you have immediate needs during the times listed above, please be sure to visit LegacyNet® for all your business resources.
Year-End Processing Requests—ALL year-end processing requests—including required minimum distributions (RMDs) and withdrawals—that are to be categorized during the 2019 tax year must be received by the intended carrier by December 13, 2019.
| LMG4177v1119 18-625-12 (11/19) |
FOR AGENT USE ONLY. NOT FOR USE WITH CONSUMERS. |