News Items
 

Ritter Insurance Marketing is proud to announce that is has been named to the Central Penn Business Journal’s 22nd annual list of the Top 50 Fastest Growing Companies in Central Pennsylvania. This is the fourth time that Ritter has achieved this milestone.

“We’re proud to once again join this list of companies representing Central Pennsylvania. Ritter strives to provide the very best tools and support for successful businesses in the area and across the country, and we plan to continue to grow for years to come,” Craig Ritter, company president, said.

In order to be eligible for consideration, companies were required to show revenue of at least $500,000 in each of the fiscal years ending 2015, 2016, and 2017, as well as revenue growth in 2017, as compared to 2015. For-profit entities that are headquartered in Adams, Cumberland, Dauphin, Franklin, Lancaster, Lebanon, Perry or York County were eligible for nomination.

The presenting sponsor of the program, Baker Tilly, calculated the nominations and then ranked the companies according to revenue growth over the three-year period. Both dollar and percentage increases were taken into consideration. This ranking formula led to the list of 50 winners.

Ritter and the other 49 winners will be honored at an awards breakfast on Monday, September 17, when their ranks will be revealed. A complete, ranked list of honorees and profiles of each company and their financial growth will be published in a special supplement to the September 21 issue of the Central Penn Business Journal.

Top 50 Fastest Growing Companies is a program of the Central Penn Business Journal and is presented by Baker Tilly. Additional sponsors include: Comcast Business, Highmark Blue Shield, McNees Wallace & Nurick LLC, Spooky Nook Meetings & Events, Union Community Bank & Robert Half. For more information about the awards, please visit www.CPBJ.com/events.

2018 Top 50 Fastest Growing Companies
(listed alphabetically by company name)

Aaron Enterprises, Inc., York
ACNB Corporation, Gettysburg
AllSearch Professional Staffing, Inc., York
Appalachia Technologies, LLC, Mechanicsburg
APR Supply Co., Inc., Lebanon
Bank of Bird-in-Hand, Bird-in-Hand
The Benecon Group, Inc., Lititz
BlackCSI, Mechanicsburg
Bob Ruth Ford, Inc., Dillsburg
Brown Golf Management, Camp Hill
Campbell Associates, York
Candoris Technologies, LLC, Annville
Cargas Systems, Lancaster
Centric Financial Corporation, Harrisburg
Clark Associates, Inc., York
CORE Design Group LLC, York
Covenant Insurance Group, Inc., Dover
DOCEO Office Solutions, LLC, York
Duck Donuts Franchising Company, Mechanicsburg
E.G. Stoltzfus, Lancaster
Eagle Disposal of PA, Inc., East Earl
Flagger Force Traffic Control Services, Hummelstown
Fulton Financial Corporation, Lancaster
Gavin, York
Graphcom Incorporated, Gettysburg
HB McClure Company, Harrisburg
Hersha Hospitality Trust, Harrisburg
Homesale Realty Services Group, Inc., Harrisburg
Hot Frog Print Media, Mechanicsburg
Impact Disaster Services, York
JPL Integrated Communications, Inc., Harrisburg
Klock Entertainment, Harrisburg
Land Grant Surveyors, LLC, Columbia
M2 Construction, LLC, Landisville
Millennium Circuits Limited, Harrisburg
Momentum, Inc., Camp Hill
Ritter Insurance Marketing, Harrisburg
River Supply Inc., Brogue
RL Livingston, Inc., Manchester
Royal Square Development & Construction, York
Schaedler Yesco Distribution, Inc., Harrisburg
Schmuck Lumber Co., Hanover
Sequinox, Lancaster
Snyder, Secary & Associates, LLC, Harrisburg
Speedwell Construction, Manheim
Spooky Nook Sport, Inc., Manheim
St. Onge Company, York
Susan Graham Consulting, Hershey
Tapestry Technologies, Chambersburg
WebpageFX, Inc., Harrisburg


Medicare Advantage, Medicare Supplement, and prescription drug plans aren’t the only insurance products seniors may want or need.

Ritter Insurance Marketing hosted an educational “senior products meeting” on June 5 to encourage local health and life insurance agents to consider the other coverage needs of their older clients and how they can fill them.

Representatives from six carriers, including Aetna, Ameritas, Guarantee Trust Life (GTL), Legacy Safeguard, Mutual of Omaha, and OneAmerica attended and spoke at the DoubleTree Resort in Lancaster, Pa. Ritter’s Ancillary & Long-Term Care and Life & Annuities teams were also present to answer questions and provide sales advice.

During the meeting, carrier reps mainly discussed why offering ancillary insurance (including hospital indemnity, cancer and heart attack or stroke, dental and vision, and short-term care plans), traditional and hybrid long-term care insurance (LTCi), and life insurance is easy and beneficial for agents, their business, and their clients.

“It’s important [for agents to sell products like ancillary, life, and LTCi plans] because folks have financial exposure from Medicare because Medicare … or Medicare Advantage doesn’t cover everything,” GTL Regional Sales Manager Demetri Simos said. “So, it’s important to at least present the solution to some of those financial exposures so that the clients are going to be better off financially.”

Carrier reps also talked about their respective company’s products and covered specific ways agents can market them and bring them up during appointments. Additionally, many reps informed agents they have marketing materials readily available for them to use during appointments.

Mike Baker, Ritter’s LTC Manager and an industry expert who’s worked in the market for more than 20 years, organized the event. While Ritter frequently hosts webinars to educate agents about carrier-specific products, Baker wanted to hold a live meeting with a specific focus on supplemental forms coverage.

“As a trusted advisor, I believe agents have a responsibility to help clients manage risk and offer solutions in the form of ancillary, LTCi, and life products. It strengthens the client relationship, increases opportunities for referrals, and can also create new revenue streams for the agent,” he said.

He also understood the value of bringing agents and carriers together in person.

“Webinars are great and can be an effective way to reach a larger number of agents, but I am firm believer that agents can learn more in a live meeting. I wanted to provide a forum where agents could hear directly from our carrier partners and have meaningful face-to-face conversations.”

Baker received positive feedback from both agents and carrier reps who attended. Karen B., an agent who’s worked with Ritter for several years, was one individual who found the event beneficial.

“It’s just very helpful to me to be in the same room with a group of people that are doing basically the same thing I’m doing,” she said. “They might ask a question or they might make a comment that I was not aware of, and it just makes me feel as though I had a refresher, or it makes me think again of things I need to do … You always learn something.”

She expressed her great appreciation of Ritter’s support system, especially as an independent agent selling multiple products.

“I do know – and Ritter’s not paying me to say this – that I can pick up the phone, and I can talk to Mike Baker or Brad or Emily, who’s new, or somebody, Brenda from the life insurance section, and I can get answers … no matter what question I ask. And we’re talking about 10 years now,” she said.

Baker plans on holding more trainings like this in the future and in other locations.

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For more info about selling ancillary, LTCi, or life products or working with Ritter, please call Ritter at 800-769-1847 or drop us a message.


HARRISBURG, PA – Ritter Insurance Marketing is proud to announce the launch of their Agent Survival Guide Podcast, an audio companion to their Agent Survival Guide website.

Available today, the Agent Survival Guide Podcast serves to meet the needs of the on-the-go insurance agent by providing valuable content for listening to at any time and any place.

“We are pleased to offer our content in podcast form to make it as available and convenient as possible for agents to enjoy and learn,” Ritter President Craig Ritter said. “Whether listening while driving, working out or just relaxing, we believe agents will appreciate having our educational materials on their smartphone or listening device.”

The podcast offers marketing tips and strategies for selling insurance and staying compliant while highlighting how Ritter’s exclusive tools can streamline an agent’s business.

“We are seeing more and more agents take the ‘independent’ route,” Ritter said. “While this has huge advantages for flexibility and earning potential, being independent sometimes means being alone. ASG is making great strides in filling that gap to provide the independent agent the best of both worlds with top-notch educational content from a trusted partner.”

Episodes feature Agent Survival Guide articles and will be published on a weekly basis. The podcast is now available on AgentSurvivalGuide.com, iTunes, Podbean, Spotify, Stitcher, and other podcasting directories.

This brand-new podcast aims to empower insurance agents selling Medicare, life insurance, annuities, long-term care insurance, and final expense products.

Subscribe to the Agent Survival Guide Podcast on Agent Survival Guide, iTunes, Podbean, Spotify, or Stitcher.

Ritter Insurance Marketing, based in Harrisburg, Pennsylvania, is a national field marketing organization for senior insurance products. With more than 460,000 Medicare policies in force, seven offices, and 160 employees, Ritter Insurance Marketing is a national industry leader in the external marketing and distribution of Medicare Advantage, Medicare Supplement, and Medicare Part D plans.

Contact:
Sarah J. Rueppel
sarah.rueppel@ritterim.com


2018 Ritter $100K Cash Giveaway and $10K Cash Giveaway Details & FAQs

We’ve got some exciting news to share! In order to make this your best year ever, we’re once again rewarding our top Medicare Supplement producers by giving away more than $100,000 in cash! New this year, the producer with the most Medicare Supplement production in 2018 will win $10,000!

Similarly to years past, most of the grand prize will be broken up into four quarterly contests. The top 50 agents in each calendar quarter will earn a share of the total award based on their rank in the top 50. The rest of the grand prize will go to the producer who has the most Medicare Supplement production over the course of the year!

The maximum award is $20,000 and the minimum award is $1,000 for the entire year depending on how an agent ranks each calendar quarter and at the end of year. In addition to having Medicare Supplement production through Ritter Insurance Marketing, you must be certified and ready to sell (RTS) for at least one Medicare Advantage or Part D company (although no production for MA/PDP will count towards the contest).

Quarterly Cash Payouts:

1st place: $2,500

2nd place: $2,000

3rd place: $1,750

4th place: $1,500

5th place: $1,250

6th place: $1,000

7th place: $750

8th place: $650

9th place: $600

10th place: $500

11th–15th place: $400

16th–20th place: $350

21st–25th place: $300

26th–50th place: $250

End-of-Year Cash Payout:

1st place: $10,000

Frequently Asked Questions:

Q: For which companies will my Medicare Supplement production count?

A: Your Medicare Supplement production will count for all companies that you’re through with Ritter as the ultimate upline. Just use our Quote Engine or Medicareful to find a competitive product in your market, get contracted with Ritter, and start writing! Different Medicare Supplement companies’ premiums can count differently.

Q: I produced Medicare Supplement business through Ritter Insurance Marketing in 2017, but never received a bonus. Why not?

A: To qualify for the bonus, you must meet all criteria, including being ready to sell for at least one Medicare Advantage or Medicare Part D (PDP) plan through Ritter Insurance Marketing. If you are not direct to Ritter, your upline may have requested that their agents not participate in this contest.

Q: I’m a top producer, and I have top-level contracts. Can I still qualify?

A: Yes, you can hold top-level contracts and still qualify.

Q: My contract is not direct to Ritter. (I have an intermediate upline.) Can I still qualify?

A: Yes, as long as your upline agrees to allow you to participate.

Q: I have an agency. Can I “pool” production from multiple agents?

A: No, this contest is for writing agents only.

Q: I have an agency. If my agents earn a bonus, can the bonus be paid to the agency and not to the writing agent?

A: No, only the writing agent will be paid the bonus. You have the option of excluding your agents, but awards will be made to writing agents only.

Q: I have an agency. Can I have multiple agents qualify?

A: Yes.

Q: When will the bonuses be paid?

A: We project bonuses will be paid within 45 days of the end of the contest period (end of the calendar quarter or year). We will mail winners their bonus checks.

Q: Will I get a 1099 for my award?

A: Yes.

Q: If I don’t write my Medicare Supplement business through Ritter, does it still count?

A: No.

Ask us about the most competitive Medicare Supplements in your area!

Do you have more questions? We’ll answer them! Call 800-769-1847 and ask about our $100K Cash Giveaway or our $10K Cash Giveaway.


Medicareful®, a Centers for Medicare & Medicaid Services (CMS)-approved Medicare product comparison website, added six prominent carriers to its online enrollment platform for the 2017-18 Medicare Annual Enrollment Period.

With its latest release, Medicareful now features online enrollment for Aetna Medicare Advantage (MAPD) and prescription drug plans (PDP), Coventry (MAPD), Humana (MAPD), CarePlus (MAPD), Anthem (MAPD and PDP), Amerigroup (MAPD), and Independence Blue Cross (MAPD) plans. These additions join Humana (PDP), SilverScript (PDP), Excellus BlueCross BlueShield (MAPD), and Univera Healthcare (MAPD) as plans available for direct enrollment online.

“With the addition of these carriers, Medicareful has enrollment options for plans which cover 42% of all Medicare beneficiaries that have chosen an MAPD or PDP plan,” Ritter Insurance Marketing President Craig Ritter said. “This greatly increases the utility of this platform for our agents.”
Using a licensed sales agent’s unique Medicareful site, Medicare beneficiaries can contact their agent and enroll in select plans. All online enrollments are tied directly to the agent for commission credit.

“Medicareful is designed to enhance every aspect of the agent’s workflow: marketing, plan selection, enrollment, and retention. It’s much more than a simple enrollment tool,” Ritter said. “Agents can manage all of their referral, lead generation and co-marketing sources through one platform to maximize their customer base. Streamlining the scope of appointment and enrollment processes through Medicareful enhances our agents’ effectiveness during the Annual Enrollment Period.”

Through technology developed by Ritter Insurance Marketing, Medicareful validates the agent’s certification status, state licenses, and state appointments to ensure compliance with CMS’ “ready to sell” regulations. Once this instant validation is complete, a Medicare beneficiary can complete the enrollment process in less than 10 minutes without leaving Medicareful. Agents immediately receive an email confirmation, and the beneficiary also gets a confirmation that their enrollment has been sent to the health plan or Part D sponsor for processing.

Medicareful’s revolutionary eSOA is now more powerful than ever for licensed agents. In 2018, CMS relaxed the rules for a Scope of Appointment (SOA), the document that verifies a Medicare beneficiary’s consent to a sales appointment from their agent. The new guidelines allow agents to assist their clients from SOA through presentation to enrollment using a single phone call.

Medicareful’s eSOA enables contracted agents to compliantly document their Medicare appointments on their website. The electronic copy of the eSOA is retained in the agent’s CRM and the agent can electronically sign for submission to any Health Plan or PDP Sponsor that accepts a generic Scope of Appointment.

Medicareful.com is developed and maintained by Ritter Insurance Marketing. Agents contracted to sell select Medicare products through Ritter Insurance Marketing are eligible to receive their own unique Medicareful.com URL at no cost.

Ritter Insurance Marketing, based in Harrisburg, Pennsylvania, is a national field marketing organization for senior insurance products. With more than 460,000 Medicare policies in force, seven offices, and 160 employees, Ritter Insurance Marketing is a national industry leader in the external marketing and distribution of Medicare Advantage, Medicare Supplement, and Medicare Part D plans.

If you’re interested in your own Medicareful site, visit RitterIM.com/Medicareful2018.


Don’t believe the commercials. Retirement in the 21st century isn’t always fishing trips, golf outings, and weekend brunches.

Rather, 70 percent of individuals age 65 and older will require long-term care, according to the U.S. Administration on Aging. And the Robert Woods Johnson Foundation reports just eight percent of all Americans hold long-term care (LTC) insurance policies, which means most of your clients need your help planning.

What Gives?
First and foremost, expensive LTC insurance premiums deter interest. A policy including a daily benefit of $150, four to five years of coverage in home and institutional settings, and three percent inflation protection would cost approximately $2,200 annually for a person under the age of 55. That’s a little over $180 a month when you get in early. But it doesn’t stop at cost.

Age isn’t just a number when it comes to long-term care policies. The older you get, the more expensive plans become. The cost of the exact plan outlined above nearly doubles to $4,066 per year ($386 per month) for a 70 year-old client. Carriers offer plans for ages 18 to 79; the earlier you can get your client covered with an LTC policy, the less expensive it will be. LTC premiums can rise for an entire class of policyholders, so the recent trends are something to consider with your client.

Also, keep in mind that pre-existing conditions are considered with LTC insurance, so purchasing early can protect those who end up facing medical hardships later in life. Those currently using long-term care services or who need help with the activities of daily living (ADL) at the time of purchase will not qualify. Clients with serious medical conditions might also find themselves ineligible. If they have a pre-existing condition, such as AIDS, Alzheimer’s, Parkinson’s, and metastatic cancer, LTC carriers will not issue coverage.

Education is key as well. Many Americans mistakenly believe that their health insurance or Medicare will cover the costs of long-term care. In fact, Medicare only covers medically necessary care, like skilled nursing or rehabilitation, not assistance with daily living. As their trusted advisor, it’s important to make sure your clients understand exactly what they can’t count on Medicare to provide.

How Do You Sell It?
Starting the conversation about an LTC plan can be challenging. Clients in good health now might assume that they’ll be part of the 30 percent who never need long-term care. Others might not even want to think that far ahead. LTC plans are the ultimate “what if?” policy.

But now, the conversation has been made significantly easier with the many new life insurance and annuity hybrid products with LTC riders. These products have been designed to assuage clients’ fear of losing their money by providing a tax-free death benefit, leveraging assets for LTC coverage, and offering return of premium options.

Can your clients afford long-term care? Maybe they can’t afford to be without it. Because of the specifics surrounding enrollment, the answer is going to be different for each of your clients. Evaluating the cost, age, knowledge level, and pre-existing medical conditions will help you to determine that answer.


Want more information on the LTC hybrid options available through Ritter? Please contact LTC Manager Mike Baker at 800-769-1847 ext. 262 or Mike.Baker@ritterim.com.


As an independent insurance agent and a marketer with Ritter Insurance Marketing, I often find myself giving advice to our agents on what products they should have in their sales kit. When it comes to children’s life insurance, there are a large number of consumers and agents who believe that children’s life insurance is a waste of money.

However, experiencing a life-threatening illness or death of a child firsthand makes you understand how the emotional impact is incalculable, and the financial impact is overwhelming. I’d like to share my family’s story for your consideration.

My niece, a typical 16-year-old girl who was happy and healthy, suddenly began experiencing unexplained and very traumatic seizures. She was sent to several hospitals, none of which could diagnose what might be causing the seizures. She was subsequently sent to Children’s Hospital in Pittsburgh, Pennsylvania, for additional evaluation.

After several months of near-weekly emergency trips to the hospital to see numerous specialists, she was finally diagnosed with a rare genetic disorder called OTC (ornithine transcarbamylase) deficiency. The disorder causes excessive amounts of ammonia to build up in the blood. The liver is unable to filter the ammonia, causing extreme seizures. The only cure for OTC deficiency is a liver transplant.

Over the course of one year, my niece was transported via ambulance or life-flight helicopter to Children’s Hospital in Pittsburgh more than 20 times. More than once a month her parents were required to travel at a moment’s notice to Pittsburgh, sometimes needing to stay near the hospital for several days at a time.

At times, our family could only pray that she would make it through the current seizure and that the hospital would be able to stabilize her ammonia levels quickly. On many occasions we were preparing for the worst news as we waited desperately for a liver transplant match.

During this extremely difficult time, my brother approached me to discuss purchasing a final expense policy for his daughter. While we were all hoping for the best, he was forced to consider the worst — how would he pay for his daughter’s funeral? Any savings his family had were long used up paying for medical expenses, travel to the hospital, and lodging expenses. After her long illness and the unforeseen expenses along with it, there was simply nothing left to pay for a funeral.

Insuring a young, healthy child is a much simpler and affordable task than trying to insure a child after they have become sick. Consider if you or your clients were faced with this situation. How reassured would they be knowing they had purchased a policy that would cover the inconceivable?

Your clients must also consider future insurability. Many policies will allow for increased coverage without proving insurability later in life. My niece, for example, at 18 years old, is now uninsurable other than a guaranteed issue policy. However, had she had insurance before her diagnosis, she would be able to keep her policy and possibly increase its face amount in the future, no matter her health condition.

The bottom line is that there is a place for children’s life insurance in your sales kit. You may not always use it, but it is a discussion that will be beneficial to have with your clients who have young children. For me personally? After our experience with my niece, I now own a policy on my own son and encourage my family, friends, and clients to consider it as well.


For more information on the children’s insurance policies available to you through Ritter Insurance Marketing, please contact Brenda Salyer at brenda.salyer@ritterim.com or 800-769-1847 ext. 302.


Your client’s life stages are constantly changing. Shouldn’t their life insurance reflect that? The needs of your single client at age 26 are very different when she’s 42 and married with three kids, a mortgage, and two car payments. But too often we write the policy and let it sit on a shelf collecting dust.

The truth is, as your client’s trusted advisor, you should be checking in regularly to make sure their policy can do what it’s designed to do; provide immediate coverage in the event of the worst. These pivotal life stages are excellent ways to get the conversation started with your clients.

Marriage
Clients tying the knot are bringing their finances together for the first time. A policy will protect your client’s spouse in the event of their death. As the anniversaries stack up and the policy grows, more assets will become available to pay on a mortgage, get rid of debt, take care of outstanding taxes, etc.

Having Kids
A client’s mindset shifts entirely when they have kids. Your clients with young children should have life insurance covering both parents. If the worst happens, benefits can help pay for day care, fund a college education, and even cover everyday living expenses.

Purchasing/Refinancing a Home
When purchasing a home, life insurance policies are often simultaneously acquired to cover the amount of the mortgage loan. In the event of your client’s death, their beneficiaries can use the policy to pay off the remainder of the balance. These policies should be revisited in case of refinancing to ensure they do not run out before the mortgage is paid off. Similarly, if your client moves to a larger home with a higher mortgage, you’ll want to update the policy to cover the full amount of the new loan.

Business Protection
Self-employed clients have substantially invested in their own businesses. Check in regularly to make sure their policies accurately reflect business growth. In the event of your client’s death, you don’t want to risk their family having to liquidate assets to cover business debts.

Divorce
Dealing with divorce can be a mess of emotional and financial decisions, but it’s important to consider how it will affect your client’s life insurance. When a marriage ends, your client may need to change the beneficiaries on his/her policy. If your client has children covered by their former spouse’s policy, they may need to purchase a new policy naming their children as beneficiaries.

Retirement Planning
Permanent life policies add a level of security to your client’s retirement. They can typically borrow against the policy with no capital gains or income taxes involved. Plus, proceeds from life insurance are passed on to your client’s beneficiaries tax-free.

Estate Planning
If your client has enough wealth for their estate to be taxed, a life insurance policy can reduce or completely eliminate estate taxes. Additionally, a policy can provide immediate payment for outstanding final medical bills, burial expenses, and other settlement costs.

Act Early
Don’t forget, the older your clients get, the more expensive it is to buy affordable life insurance. Deteriorating health conditions can cause increased premiums or even prevent your clients from being able to obtain coverage.

Worth noting, the 2015 Insurance Barometer Study by LIMRA and Life Happens found that 80 percent of consumers misjudge the price for term life insurance. For the price of a weekly lunch, your clients will likely be surprised at just how affordable life insurance can be.


There are three common ways to determine a client’s life insurance needs: Multiple-of-income approach, human life value approach, and capital needs analysis. The latter two methods are more sophisticated and allow you to address the specific needs and concerns of your clients’ survivors.

Multiple-of-Income Approach
The simplest method for estimating your clients’ life insurance needs is the multiple-of-income approach. The goal of this approach is to replace the primary breadwinner’s salary for a predetermined number of years.

Begin by multiplying the client’s current annual income by how many years they want to provide financial support for their survivors. The recommendation is to have seven to ten years of life insurance.

It’s an easy method, but it doesn’t take into account the specific needs of survivors, other sources of funds – such as the survivors’ income and investments – or different types of family structures. For example, this method may work well for a family with one child, but might not work as well for a family with six children. It also doesn’t take into account inflation or future salary increases. Using this approach may lead to over-insuring or underinsuring your clients, but it’s a start.

Human Life Value Approach
This method considers your client’s age, gender, occupation, current and future earnings, and employee benefits. There are several steps to determining the overall value of the client if they were to die today:

  1. Estimate the client’s earnings from now until a set point in the future – typically their expected retirement age. Be sure to factor in future wage increases as well.
  2. Subtract the insured’s annual taxes and living expenses from the total. It’s usually safe to assume 30 percent of their salary will go to taxes.
  3. Select an assumed rate of return on the remaining total and subtract it from the gross amount. In other words, subtract the interest you expect the money to earn.
  4. Add the cost of additional benefits provided through employment, such as health care, that will need to be replaced when the client dies. Remember to account for inflation.

The primary goal of this method is to replace income lost. It doesn’t necessarily account for funeral costs, children’s educational expenses, or other specific future needs.

Capital Needs Analysis
The capital needs analysis is the most widely-used approach for estimating life insurance coverage. In addition to replacing the client’s salary, it also accounts for other sources of income and the specific needs of survivors.

This method factors in:

  • Current and future income of both the insured and surviving spouse
  • Immediate lump-sum cash needs upon death, such as funeral expenses, debt repayment, and mortgage payoff
  • Future expenses such as college, weddings, long-term care expenses, and retirement funding
  • Existing family assets, retirement funds, or insurance policies

Once all future needs are taken into consideration, there are then two ways to calculate how much insurance the client needs, based on how they want to utilize the funds in the future.

  • Earnings-Only Approach: The survivors will live off only the investment earnings of the policy without cashing in the principal value. This method is preferable if the client wants funds to be available for their children after their spouse has also died. Like any investment, this method is subject to the risk of changing market interest rates. To provide a sufficient income stream, the death benefit is usually significantly higher than in the liquidation approach.
  • Liquidation Approach: The surviving beneficiary utilizes a portion of the principal as well as the investment earnings. There is more risk with this approach, particularly if the investment earns less than originally predicted. The surviving spouse may not have sufficient income to live on for the remainder of their life.

No matter which method you choose to calculate your clients’ life insurance needs, it’s always a good idea to have a baseline estimate of their survivors’ future financial needs to ensure the policy will provide sufficient support. Getting a life insurance policy is the smartest thing your clients can do to show their family they care!


You’ve heard the news that now’s the time to be selling annuities, you’ve done your initial research, and you’ve discovered the two main types: fixed annuities and indexed annuities. But what sets them apart, and how do you know when to market one versus the other? Keep reading, we’ll fill you in.

Generally speaking, Americans near or of retirement age are in trouble when it comes to having enough money saved to live out their golden years worry-free.

According to AARP’s secondary analysis of their 2014 Retirement Confidence Survey, approximately half of American workers age 50 and older and close to 60 percent of retirees age 50 and older had less than $25,000 in their savings and investments. That’s much less than the nest egg amount the experts recommend people save for retirement, which is anywhere from eight to 12 times one’s annual income.

Both fixed and indexed annuities can provide the average person with a safer way to build their retirement savings while protecting those funds from a downturn in the market. Additionally, both can provide a steady, lifetime monthly income, allowing clients to plan their retirement more clearly. But, how do fixed and indexed annuities differ and when should you sell a client one over the other? We’ll gladly explain.

FIXED ANNUITIES
Let’s start with the basics. By and large, fixed annuities are very straightforward and easy to understand.

A fixed annuity is a contract between your client and the insurance company that guarantees both the principal and the rate of return on your client’s investment. Similar to a bank CD, fixed annuities are very low-risk investments that are not affected by the ups and downs of the stock market.

A fixed annuity can be immediate or deferred. Immediate annuities allow the client, or annuitant, to begin receiving payments the month after they open the annuity. Conversely, deferred annuities postpone the annuitant’s payments until a future date to allow time for growth of the principal.

The most important benefit of fixed annuities is that they typically provide much better interest rates than bank CDs and can provide lifetime payouts after retirement. Interest rates for fixed annuities remain the same for the full length of the contract, and the interest earned is tax-deferred until payments begin.

INDEXED ANNUITIES
Indexed annuities, sometimes referred to as equity-indexed annuities, are much more complex than fixed annuities. Why? This type of product offers features of both fixed annuities and variable annuities and is tied to the stock market.

Because the return for an indexed annuity is based on one or more indexes, its interest rate will vary throughout the contract. As with fixed annuities, an indexed annuity usually offers a guaranteed minimum return, typically between 1 percent and 3 percent, even if the index it’s tied to does poorly. However, a major benefit of indexed annuities is that, if the index is performing well, the annuitant has the potential to earn much higher interest rates.

An indexed annuity has many intricate parts, such as the index it’s tied to, the participation rate or spread used to determine interest calculations, cap rates, and high surrender charges. It’s important that your client thoroughly understands the product they are purchasing, its benefits, and its limitations.

INTEREST CALCULATION
Interest calculation for fixed annuities is basically unnecessary since interest rates are locked-in for the life of the contract. Conversely, interest on an indexed annuity typically follows one of the index crediting methods below. Sometimes, the calculation may involve a combination of these crediting methods.

  • Interest Rate Caps—Some indexed annuities use a cap to determine how much interest will be credited in a given time frame. For example, if the annual cap rate is 5 percent for a particular year and the index that the client’s annuity is linked to gains 8 percent, the client would receive only 5 percent interest that year. If the indexed only gains 4.5 percent, the client would receive the full 4.5 percent interest for that year.
  • Participation Rates—Another common interest crediting method, a participation rate defines how much of the rise in the given index will be credited to the client for each predefined period. For example, if the client’s participation rate is 60 percent and the index rises 14 percent that year, the client would be credited 60 percent of that rise, or 8.4 percent interest.
  • Spreads—A spread or asset fee can be used either in combination with or instead of a participation rate. The spread is usually defined as a percentage and will be subtracted from any gain in the index. For instance, if an index gains 8 percent in a given year and the client’s defined spread or asset fee is 4 percent, this would result in credited rate of 4 percent for the client.

GUARANTEED MINIMUM INCOME BENEFIT RIDERS
An enticing feature now included with many indexed annuities is a rider guaranteeing a minimum annual income based on a specified interest rate. The Guaranteed Minimum Income Benefit Rider (GMIB) only applies if a client annuitizes his contract. How does it work?

An annuity with a GMIB has two separate account values—the actual market value of the annuity, which is based on the performance of a specified index, and the GMIB account value. The GMIB account value is hypothetical and is only used to determine the amount of income the annuitant will receive when he or she elects to begin receiving annual income. GMIBs usually offer a guaranteed percentage of annual interest for a specific number of years, for example, seven percent guaranteed annual interest rate for the first ten years of the policy. It is important the client understands that this guaranteed rate is not credited to the actual market value of the annuity, cannot be withdrawn, and is only the hypothetical GMIB account value.

GMIB riders usually have a rider fee associated with them. However, if your client intends to annuitize the policy and use it as retirement income, a GMIB rider offers a guaranteed minimum income amount that will much likely be higher than the income amount from an actual market value account without the rider in place.

SURRENDER CHARGES
For both fixed and indexed annuities, the annuitant will incur surrender charges if he cancels his contract, or withdrawals an amount of money in excess of a penalty-free withdrawal allowance for a given year, during the annuity-specific surrender period.

The surrender periods for both fixed and indexed annuities are usually equal to the length of the contract. Fixed annuities often have surrender periods that are for three, five, seven or ten years. Indexed annuities have surrender periods that also vary in contract terms, with the most common being ten years and the longest being twelve or fifteen years.

If an annuitant chooses to cancel his contract prior to the end of the surrender period, hefty surrender charges will apply. The surrender charges for both types of annuities can be as much as 10 percent. These charges will vary between carriers, but usually decline over time, typically 1 percent per year.

DETERMINING THE BEST FIT
Overall, fixed annuities are an excellent option for seniors who don’t want to take on the risks of the unpredictable stock market but want to achieve higher interest rates than their bank CD can provide. And due to their more complicated nature, indexed annuities are more suited for savvy investors, and typically your younger clients looking for more of a return on their investment without taking on much risk. But keep in mind, while an indexed annuity can be a great vehicle for a client looking to maximize his return, it’s not a good fit for everyone.

You, as the agent, must assess your client’s interests, knowledge, and financial situation. If your client has little interest in the stock market or how it works, and has never had investments tied to it, an indexed annuity is most likely not the right product for that client. However, if your client appears to be stock market-savvy, understands the product, and has clear expectations about potential future earnings and possible charges, definitely discuss an indexed annuity as a possible building option for your client’s retirement savings.

As a general rule, the more informed your client is, the happier they will be with their investment. The Financial Industry Regulatory Authority (FINRA), has developed an Investor Alert explaining indexed annuities via an easy-to-understand, generally unbiased approach. Providing this alert to your clients will allow both you and your client to discuss and determine if an indexed annuity is right for them.


For more information on the various annuity products available to you through Ritter Insurance Marketing, please contact Jed Karpinski at jed.karpinski@ritterim.com or 800-769-1847 ext. 226.