Annuity Info You Must Have During National Women’s History Month

Josh VerHoeve

By: Josh VerHoeve, VP - Annuity & Life Insurance at Asset Marketing Systems

Originally Written: March 3rd, 2019
Updated: March 7th, 2024

March is National Women’s History Month, and we aim to share a wealth of financial knowledge to bridge the gap of financial literacy between men and women. Between the gender pay gap and longer life expectancy, many women find it extremely difficult to plan for retirement. Women outlive men and women need long-term care more often and for longer periods of time for men. One way to help mitigate some of these risks women face in retirement is by offering an annuity solution. There has been quite a bit of discussion as to whether we should be planning for longevity and long-term care by using traditional LTC products or by using FIAs with guaranteed income riders that have enhancements for income when a client becomes ill.

Most clients will need some sort of guaranteed lifetime income. Why not offer clients an option with both income and home health care benefits? By using an FIA with an income rider, we forgo the traditional medical underwriting and in exchange there is generally a two or three-year waiting period before home health care benefits can be taken advantage of. Most clients have no issue with those waiting periods because it also gives the policy time to for the income benefit to grow. Aside from FIAs with actual income riders, we now have the new EquiTrust Bridge product which is unlike anything we have ever seen hit the market. Of course, Asset offers a variety of competitive proprietary products that can also be utilized. Outside of the EquiTrust Bridge our top FIAs with income riders that enhance for home health care are the North American Secure Horizon Plus, F&G Safe Income, and Investors Heritage Income Advantage. All three of these FIAs are at the top of the list when it comes to highest income guarantees and all three offer enhancements when a client is unable to perform 2 out of 6 Activities of Daily Living (ADLs). Furthermore, you can set these policies up for a married couple using the same dollars to protect both of their longevity and need for care in the future.

A recent case we worked on at Asset was for a married couple in their late 60s with a total of about $900,000. This couple did not have a lot of expenses, but they had both just retired without a plan. The good news is they created a plan quickly and the advisor put $500k of that $900k into an FIA that will guarantee over $50,000/year of income (after a five-year deferral) as long as one of them is still living. Better yet, this $50k would double to $100k when one of them became ill. The income would ultimately reduce back down to $50k after the account value hit $0 but that $50k would still be guaranteed for as long as one of them is living. The advisor used the other $400,000 to bridge the gap between now and five years. This plan allowed the couple to delay and enhance their social security and of course allow their income FIA to grow and generate a substantial payout. The best part about the plan was that it gave each of them more income than they needed, and they had an inflation hedge built in with an outside product.

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