Guest post by Marc Montini, Chief Marketing Officer, Shurwest

The variable annuity world has been rocked by low interest and high volatility. The damage has been felt in reduced benefits to GMDBs and GMIBs.  As a result, we’re seeing lower roll-up rates, lower income payouts and lower benefit options. Plus, companies are getting out of that business completely.

It’s time to reexamine why we started selling VAs in the first place. VAs were designed as accumulation products, a function they perform very well.  The addition of GMDBs and GMIBs allowed us to capture a new audience interested in some level of protection from stock market volitility.

Unfortunately, a GMIB never provided protection against loss of principal. If you’ve ever taken a call from an angry customer wanting to know where their principal went, you know that’s not a fun conversation.

Losing principal is one thing, losing control is something else entirely.  FIAs also share this problem. Any time there is a gap between “income” value and cash value,  you and the client have both lost control.  That gap can result from market losses, fees (watch this http://www.shurwest.com/fees/) and caps.

If your income rider grows at 4-6% and your client suffers market losses or is limited to a 3% cap, then a gap is created. At that point the client must make a tough decision, begin income payments or accept the lesser value. Either way, it puts the advisor in a difficult position because the client has lost control.

The point is, use VAs for their intended purpose:  accumulation.

The best part is that you do not need to stop doing what you are doing. Join us on a webinar and learn about the asset protection vehicle advisors are using in conjunction to their VAs.

Shurwest provides a product with:

•             True principal protection from market loss

•             Uncapped strategy to take advantage of market gains

•             Competitive GMIB and GMDB

Contact us at Shurwest if you want more information:  (800) 440-1088

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