by Brian Holland, Vice President, Annuity Sales - Creative Marketing

The American landscape is rapidly changing. Longevity continues to play a vital role, as medical advances and new technologies mean that Americans are living longer than ever before. According to the U.S. Census Bureau, people age 85 and older are the fastest growing segment of the population. Planning for retirement has become exponentially more complicated, and for some, that’s causing expectations about retirement years to change.
 

For one client in particular, financial goals and objectives needed to be reviewed when she found herself still thriving at age 80. When combined with the current economic conditions, it was clear that well-intentioned plans made years ago would require a significant change.

The Facts

• Female age 80
• $1 million in a variable annuity with a death benefit rider
• Looking to reposition those funds into a vehicle that better meets her needs

The goal

Reduce fees the client was currently paying for a death benefit rider that was no longer serving its intended purpose. Simultaneously, select a solution that would offer the client continued safety of principal and guaranteed growth for this asset she planned to leave to her beneficiaries.

The course of action

After working hard her entire life to provide for her family, the client was disappointed that the variable annuity she intended to leave as a legacy to her beneficiaries had lost value in recent years due to market volatility. Additionally, she had purchased a death benefit rider on the asset to lock in a higher rate. The rider stopped growing in value when she turned 80, yet she was still paying the required fees on it. At this point in her life, the benefits of principal protection and leaving a legacy for her heirs far outweighed any desire for potential growth that a variable annuity might offer. She phoned her agent, a registered representative, to help her come up with an alternative solution for this money.

In an effort to maximize the benefits of the asset given the client’s current life situation, the agent contacted his Creative Marketing consultant, John Seberger, for suggestions. John understood that it was imperative to offer the client a safe-money solution in addition to potential growth to recover the value she had previously lost in the market downturn. He and the agent determined that an indexed annuity could provide her with upside potential while eliminating risk to her principal.

The solution

After considering a number of options, John worked with the agent to identify a single premium indexed deferred annuity, the BalancedAllocation Annuity 8STM from the Annexus Group, that would enable the clients’ money to grow tax-deferred. The asset would be protected from market downturns while offering an enhanced opportunity for long-term accumulation with no traditional caps on the earning potential.

The BAA8S included a 4% upfront bonus, which suited the client’s desire to try and regain some of the value the asset had previously lost. Furthermore, she purchased an available death benefit rider guaranteed to increase at 4% annually for the next 9 years. She had the flexibility to take withdrawals in case of emergency while leaving an increasing legacy for her family, her primary goal.

The result

For the client:

Given today’s low interest rate environment, market volatility and a death benefit that wasn’t growing, it was the perfect time to review alternatives to the client’s variable annuity. Now she can be confident that both her asset and her family are protected with this safe-money alternative, just as she had always hoped.

For the agent:

Call your Annuity Sales Consultant to find products available to help align your clients’ portfolios with their current objectives.

FOR AGENT USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 11631 - 2011/4/12 | 17848 103261

The above hypothetical example is for informational purposes only and is not indicative of past, nor intended to predict future performance of any Index or annuity product.

The BalancedAllocation Annuity™ Series [forms BAA8 (9/09) and BAA12 (9/09), or state variation], and the BAA Riders [forms BAAIR (9/09), DBR (9/09), BDBR8 (09/09), BDBR12 (09/09), or state variation], optional benefits for which a charge is deducted, are fixed indexed annuities issued by Aviva Life and Annuity Company, West Des Moines, Iowa. Product features, limitations and availability vary by State; refer to the product disclosure for details. Guarantees are backed by the claims-paying ability of Aviva Life and Annuity Company.

To receive the premium bonus the owner must elect the BAA Premium Bonus Rider with Enhanced Death Benefit, an optional benefit for which a charge is deducted. Availability varies by State. Withdrawals in excess of the contract's free withdrawal amount will incur a recapture provision equal to the amount of the bonus attributable to the excess withdrawal.