Highest MYGAs Rates IMOs Don’t Have Access to!
If you want to learn about a MYGA carrier that has some of the highest rates but virtually NO IMOs have access to (meaning you have NOT heard about it), click on the following link:
I’ve never done a Multi-Year Guaranteed Annuity (MYGA) newsletter because I didn’t think I could offer much value. However, with advisors selling companies they should NOT be selling and because most IMOs do NOT have access to the best MYGA rate carrier, I thought it was time for a newsletter.
Most advisors pick the MYGAs by looking at a spreadsheet given to them from an IMO which shows the highest rates for 3-, 5-, and 7-year products.
What’s the problem when using a MYGA spreadsheet given to you by an IMO?
- Most IMOs do NOT have access to “all” carriers.
- Many carriers with the “best” MYGA rates have only been writing them for a few years (which you can’t tell from the spreadsheet).
Stop Selling Companies New to the MYGA Space
Did you know that 4 of the top 5 highest MYGA rates are offered by companies who have been writing MYGAs on average of less than 3-years? They are all B+ rated carriers. The company with the highest MYGA rates just got their A.M. Best rating and was not rated for most of 2020.
Which is better?
A) a company that has sold MYGAs for 30+ years or
B) one that has been selling them for less than 3-years?
A) is better but most IMOs are pushing products from B)
A-rated vs. B-rated-all things being equal, advisors would prefer an A-rated carrier. However, because of state mandated general account requirements/restrictions, B+ rated carriers are able to offer better MYGA rates.
B+ rated carrier goes into rehabilitation–in 2018-2019, many advisors sold Colorado Banker’s Life (CBL) (B+ rated) because it had the higher MYGA rates. Unfortunately, the carrier is now in “rehabilitation.” Policy holders may be made whole but it’s still a headache that could have been avoided by being more selective with the carriers advisors choose.
Even with CBL having issues, far too many advisors don’t seem to care, and are selling products from companies I wouldn’t sell (Upstream, Sentinel, ACL, or Equitable).
No need to sell questionable B+ rated carriers
There is NO reason to sell B+ rated carriers who are new to the MYGA space or ones with questionable finances.
Why? Because I recently found a B+ rated carrier with the “Best MYGA rates” that has very strong financials, has been in business since 1850, and has been issuing annuities since 1980. Normally I don’t recommend B+ rated carriers, but I’m making an exception for this carrier.
Other positives about the carrier I found:
- It offers products in ALL 50 states (including New York)
- It does NO mass marketing (saving that money to make their products better)
- It does NOT operate above capacity (they do not jack up rates to buy business)
It usually only takes 2-3 days to get appointed and their customer service is red carpet.
Let’s look at their rates:
Highest 3-year rate in the industry: 2.65%
Highest 5-year rate in the industry: 3.45% offered by Upstream Life (a company that just got its A.M. Best rating and you’d have to have a screw loose to sell it)
- 2nd highest rate: Sentinel @ 3.35% (offering MYGAs for less than 3-years)
- 3rd highest rate: carrier I am recommending @ 3.30%
Highest 3-year rate in New York: 2.00% (nearest competitor is at 1.50%)
Highest 5-year rate in New York: 2.65% (nearest competitor is at 2.20%)
Other product benefits of the carrier I recommend
- Product liquidity can be dialed up or down based on the rate you want
- Anywhere from 0% to 15% free withdrawals
- Return of Premium options available as well
For clarity, I still do NOT recommend B+ rated carriers for FIAs. MYGAs are only around for a limited duration in time and the risk of issues with the carrier is much less than with an FIA product that could be around for 20-30+ years.
If you are selling B+ rated carriers that have only been in the MYGA space for a few years, STOP!
With the carrier I allude to in this newsletter (one that also happens to have some of, if not the highest rates), you get a company that has been in the MYGA space for 30+ years and has financials that look like an A- rated carrier.
Roccy DeFrancesco, JD, CAPP, CMP
Founder, The Wealth Preservation Institute
Co-Founder, The Asset Protection Society