Life Settlements—Help Clients While Generating Additional Revenue
Webinar–Thursday at 2:00 PM EDT & 17-Page White Paper
To attend the webinar so you can learn the huge LS opportunity in the marketplace today and about real cases that closed, click on the following link:
B-Rated Annuity Carrier (SILAC) Credit Rating Under Review
By: Roccy DeFrancesco, JD, CAPP, CMP
“AM Best has placed under review with developing implications the Financial Strength Rating of B+ (Good) and the
Long-Term Issuer Credit Rating of “bbb-” (Good) of SILAC Insurance Company.”
To read the full AM Best press release, click on the following link:
This headline should be a wake-up call for those selling SILAC and Nassau Re (another B-Rated carrier I tell advisors to stay away from).
Last year I ran a newsletter titled: B-Rated Annuity Carrier Downgrade—No Longer Taking Apps. In 2019, I ran an article titled: Why You Shouldn’t Sell Annuities from B-Rated Carriers. Click here to read either article.
A-Rated Carriers with Similar/Better Products than SILAC
The #1 reason to embrace why you should STOP selling B-Rated carriers is that there are products with A-Rated carriers with similar or better terms.
If you want to get away from SILAC, Nassau Re, Sentinel, Atlantic Coast Life, and Upstream, click on the following to sign up so you can learn about A-Rated products that are similar or better.
SILAC FIAs—it’s true, their FIAs are attractive, but not attractive enough to risk a client’s money when they could be using a similar product with an A-Rated carrier.
S&P 500 Uncapped Index (1-year pt-to-pt)
SILAC = 40% par rate
You can get that same rate in an A-Rated carrier and a 60% par rate on a 2-year pt-to-pt.
Uncapped VCI (Volatility Control Index) (1-year pt-to-pt)
SILAC = 120% par rate.
A-Rated carriers (ones we trust)
Carrier #1 = 105% with 150% on a 2-year pt-to-pt
Carrier #2 = 110% with 135% on a 2-year pt-to-pt
So with the S&P 500, SILAC is similar to some A-Rated carriers.
With the uncapped, SILAC is slightly higher, but that par rate is ONLY AS GOOD AS THE COMPANY CAN AFFORD TO OFFER IT!
Like AM Best, we have low confidence in the financials of SILAC and other B-Rated carriers.
B-Rated carriers have a history of buying businesses with high caps and/or higher agent commissions which lead to unsustainability in cap rates.
Surrender Charges and Free Withdrawals
SILAC has a 12% initial surrender charge and only a 5% free withdrawal.
A-Rated carriers #1 & #2 have a 9% initial surrender charge and a 10% free withdrawal.
SILAC = up to age 85.
A-Rated carrier #1 up to age 80 and #2 up to age 89.
Stop Taking the Risk with B-Rated Carriers
If you sell SILAC annuities, what are you going to tell your clients when and if a negative downgrade comes from AM Best and others? Don’t worry about it? They will worry and they will wonder why you sold them a product from a B-Rated carrier.
Advisors DON’T NEED THE STRESS of financial downgrades that are seemingly always looming on the horizon. Downgrades facilitate a company to dump caps/par rates.
Do yourself and your clients a favor and work with an IMO who knows both the B-Rated and A-Rated products and will help you offer your clients the ones that are truly in their best interest.