Tuesday Tips – November 15th, 2016
John Hancock to Discontinue LTCI Sales
John Hancock has announced that they will be discontinuing individual LTCI sales. John Hancock cited the significant capital requirements of the LTC product as a reason for the discontinuation. John Hancock will accept applications until December 2, 2016. All policies must be issued and paid for by February 10, 2017.
California Assembly Bill 2884
California recently passed Assembly Bill 2884 which places restrictions on fixed annuity surrender charges. This goes into effect January 1, 2017 and will result adjustments to fixed annuity products offered in California including surrender charges, caps, bonuses, etc.
1035’s are a great tool to help a client purchase a new life insurance policy that better suits their needs. Two strategies that can be very beneficial are MEC Rescue and Mirrored Loan strategies. For clients that have a policy that is a MEC and aren’t as concerned about the death benefit MEC Rescue is a potential solution. With this strategy you 1035 the cash value into a life insurance policy that has a chronic or ltc rider attached to it. In the event the client has an LTC need they can now advance the death benefit income tax free because the advancement falls under LTC tax guidelines. With the mirrored loan strategy if a client has an outstanding loan on a policy that they can’t pay off one potential solution is to 1035 the cash value and loan to a new carrier then use the cash values to pay off the loan resulting in a paid up policy. There are only a handful of carriers that will do this so make sure to give us a call if you have this type of scenario.
More and more companies are looking to pension buyouts in an effort to rid themselves of pension plan liabilities. Pension buyouts now top $18 trillion.
F&G Retirement Pro
The Retirement Pro by F&G is a competitive FIA designed to maximize retirement income. The product is on a 10-12 year chassis depending on the state and offers a 7%-5% bonus depending on the state. The products is specifically designed for income and offers a stacking rollup with a base 4.5% rate partnered with annual point to point caps of 13%, monthly point to point caps of 4.5%, and a monthly average cap of 20%. Call today for additional product details and state availability.