industry interview
More Education, More Training, Moore Intelligence
Sheryl Moore Shares Her Perspective on FIAs
T
STEVE SAVANT
Financial Columnist
Steve Savant is a regular
columnist and contributor to
Insurance Selling magazine
and Insurance Forums. Steve
is a syndicated financial
columnist, talk show host and
popular platform speaker. He
is also a nationally recognized
videographer, content creator and
co-contributor to Advisys, InsMark
and LifeSpecs. Steve’s videos and
content are distributed to over
280 media outlets and 200,000
Twitter users. To contact him visit
www.lifesizesolutions.
SHERYL MOORE
President of Moore Market Intelligence
Sheryl Moore is President
of Moore Market Intelligence
and can be reached at sjm@
indexedrockstar.com and
(515) ANN-UITY.
he S&P 500 Index
is the vanguard (no
pun intended) of
indices worldwide. And in the
insurance industry, the leading
index in sales of Fixed Indexed
Annuities (FIAs).
One of the new emerging
concerns of the S&P 500
Index is the composition of its
companies now being at 26%
tech. That’s a large piece of
the pie for a volatile sector to
occupy that much space. Don’t
get me wrong – I’m still a big
fan of the S&P 500 Index, but
it’s some cause for pause. But
the real cause of concern for me
lately is the inaccurate online
information on insurance
indexed products themselves.
Most financial professionals
are not comprehensive
planners, so statement errors
are routinely conveyed to
consumers about fixed indexed
annuities and their use in
retirement planning. The vast
majority of financial advisers
and/or insurance agents can’t
explain an FIA in terms that
the potential policyholder
can understand and do it in a
compliant way. That is a real
ever-present danger to the
industry at large.
FIAs manufacturers,
distribution channels and
the field sales force are
in desperate need of FIA
education before they get
schooled in arbitration or
worse. If we, as an industry,
don’t take the lead in education
and training the DOL will
impose regulations that will
stifle a great product line.
I wanted to take the time
to set the record straight on
just few points of contention
regarding FIAs in the public
domain in articles, blogs and
anti-annuity propaganda from
talking heads who don’t know
what they’re talking about.
I’ve selected reoccurring
themes that are prevalent
with internet trolls, security
licensed representatives and
ill-informed consumers. Then
I crafted those themes into
questions for an interview with
“Indexed Product Rockstar”
Sheryl Moore.
I’ve had the opportunity
of interviewing Sheryl on my
video talk show several times
over the years. She never
disappoints. She has been one
of the leading authorities on
indexed insurance products
for over 15 years. Sheryl is a
national platform speaker,
online blogger and guest
columnist in industry and
secular publications alike. She
also developed the adviser
support software, Annuity
Specs and Life Specs, used
by financial professionals in
the due diligence of indexed
insurance products. What she
says about indexed products
can be taken as gospel.
Here are a few questions I put
to Sheryl:
Steve: Is a spread charge
a true expense to the policy
owner?
Sheryl: No, this is a way
of limiting indexed interest.
The spread is not retained by
the insurer, but a function of
the option pricing on indexed
products.
Steve: Can these new fees
being inserted into FIAs result in
a loss in a zero-crediting year?
Sheryl: Yes, over the past
couple of years, some indexed
annuities have been introduced
that have fees embedded into
the product and are not for
optional benefits or riders.
Typically, these fees are used to
cover the expenses of offering
various benefits/riders that
are mandatory, but they are
occasionally used to subsidize a
company’s option budget, and
subsequently offer comparatively
higher caps and rates than
comparable products without
these fees. These types of fees
will reduce the account value
of the annuity, even in years
when the index declines, and the
contract does not experience a
gain.
Steve: Could FIA income rider
charges result in a loss in zero
crediting year?
Sheryl: Yes, charges
for Guaranteed Lifetime
Withdrawal Benefits will result
in a loss of account value, even
in years when the contract
receives zero credited interest.
Note, however, that a few
...CONTINUED ON PG. 33
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