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Annuity Solutions & Resources


The annuity marketplace is rapidly evolving.  We continue to track the trends in the industry.

– Some states are trying to invoke the fiduciary rule on annuities since the national attempt didn’t pass.

– More insurers are developing new products for the RIA space.

– Conservative clients continue to gravitate to the safety of annuities.

We’ve had some unique client situations where an annuity was the best solution based on the client goals at hand.  Below is one example along with some informative resources.

Case Story:  Legacy Planning

We recently worked with a 70-year-old couple who wanted to transfer some of their investments to a safe place for their children.  Their concerns were with market volatility and the fact that they had no long-term care insurance.  Their plan was to self-fund if they needed care, but if they needed it for a long time, they likely would not be able to leave a legacy to their children.

They decided to pull $170,000 out of the market and annuitize it for a lifetime income.  This took risk away from the market and turned it into guaranteed lifetime joint income.  We then designed a guaranteed $300,000 second-to-die life insurance policy that was paid up in 16 years.  If either or both spouses are still living at age 86, they would have spendable income from the annuity thus making it a pseudo income inflation hedge.  They were happy to lower the amount of money they had in the market and guarantee that it will provide $300,000 of tax-free inheritance to their children when they die.

Case Story:  An Unintended Outcome

Larry and Mary purchased an annuity as co-owners.  Thinking they both had access to the annuity as long as they lived, they made their only child the beneficiary.  Unfortunately, since the annuity was annuitant-driven and not owner-driven; when Larry died their son received the proceeds instead of Mary.  Launch the following link to learn how to avoid their mistake:  Annuity Ownership – Case Study

An annuity is a legal contract

Annuities are contracts and require a certain level of knowledge to set them up properly.  Ownership and contingencies are key pieces to an annuity review.  It is important to know whether an annuity is “annuitant” or “owner” driven.  You may want to make sure client’s have a contingent beneficiary and a contingent owner.  Below are a few resources addressing ownership, titling and beneficiary designations:

Annuity Titling Talking Points Q&A
Annuitant-Based Contract Guide
Owner-Based Contract Guide

No commission is better?

The number of advisors, clients and industry pundits who believe commissions are evil continues to grow.  Whether you work by commission or not, it is important to separate theory from reality.  We can’t assume that just because a product doesn’t pay a commission that it is a better product.  There are costs to distribute and a commission is one way to do it. Some of the RIA available products have the perception of being better; and some certainly are.

Let’s explore this further . . . If you strip a one-time 5% commission out of an insurance product but start charging an asset management fee of 1% per year, does your client come out ahead in the long run?  You can only strip so much expense out of an insurance product.  Insurance companies need to properly charge for the benefits delivered.

The variable annuity marketplace has had fee only products available for quite some time.  Whether you are for or against annuities, commission or Fee-Only you will find the below comparison tool of value – it allows you to compare up to 3 variable annuities at a time.

Variable Annuity Comparison Tool



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The information contained on this website is provided "as is" and does not constitute legal, accounting or tax advice. We are not acting as your attorney, accountant or tax professional. We encourage you to contact the appropriate professional for legal and tax information pertaining to your specific needs and circumstances.
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