Since being approved in 2014 for use in traditional IRAs, 401(k)s, and other approved retirement plans, Qualified Longevity Annuity Contracts (QLACs) are hot topics in the news. What many don’t realize is QLACs are simply a specific kind of Deferred Income Annuity (DIA) that allows one to purchase a guaranteed income to begin at some specific point in the future.
QLACs provide a guaranteed lifetime income stream, may include legacy benefits for both spouse and non-spouse beneficiaries, and allow for withdrawals to be deferred past the age of 70 ½, thus reducing required minimum distributions (RMD), and in turn, RMD-related income taxes. These additional benefits have sparked interest from consumers, and producers are now trying to best determine how these guaranteed products could best fit into their clients’ retirement portfolios.
In many cases, producers have found when a QLAC doesn’t fit into a client’s portfolio, the less-specific Deferred Income Annuity does.
In fact, DIAs experienced record growth in 2014, reaching $2.7 billion, a 22 percent jump from 2013.1 These record sales levels, despite falling interest rates, show just how beneficial producers and clients think DIAs are.
With both men and women living longer and farther into their retirement, and being more responsible for their retirement income than previous generations, clients are looking for insured financial products to establish a sufficient level of guaranteed income. As they recognize their other investments may potentially become depleted, they are turning to DIAs as some part of the solution. DIAs are usually purchased at or near retirement age and begin paying out two or more years after issue, depending on the client’s preference.2 DIAs offer clients the opportunity to purchase income payments at a discounted price, with a set withdrawal date which begins later in their retirement, when they may need long-term care or additional income for travel.
As a producer, you want to spend your time efficiently. Why waste time visiting each carrier’s website to enter the same information, when you can save time and do it all in one place?
Make getting multiple illustrations easy with CreativeOne’s Single Premium Immediate Annuity (SPIA) Solutions. SPIA Solutions is a 24/7 resource that allows you to illustrate the perfect immediate annuity income to fit your clients’ needs quickly and conveniently. SPIA solutions also provides professional articles, sales concepts, special request forms and an illustrator tool that lets you compare and contrast quotes from eight of the major SPIA & DIA carriers in one illustration.
SPIA Solutions was designed for ease of use and to save you time, and in a time of such advanced technology, why shouldn’t work be easier? After entering the client info and data, the SPIA Illustration Tool will provide you with multiple product options offering the best payouts. Not only does this make the highest payout options easily viewable, but it provides you a simple way to leverage the data and calculations more quickly. With quotes typically only valid for seven days, wouldn’t you prefer to offer your clients the most up-to-date information?
Call your sales team at CreativeOne at 800.992.2642 for more information on deferred and immediate annuities and how they can benefit your clients. We want to save you time and money, so let us help you take advantage of all DIAs and QLACs have to offer. Your work life can be much easier when utilizing SPIA Solutions, so try it out for yourself and give us a call with any questions you might have.
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2 IRI “Fact Sheet for Consumers: Understanding the Function and Features of Deferred Income Annuities” 28 April 2015
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