The 10/10s are coming! The 10/10s are coming!
February 27, 2010 by Sheryl J. Moore
Hey there team, 10/10 is getting to be a big issue. This desk drawer legislation is used by insurance divisions to limit the surrender charges on all annuities to 10-years and10%. The bigger issue here is that limiting surrender charges on annuities is anti-competitive and results in a reduction of benefits on the product. For example, shorter surrender charges result in:
1. Smaller premium bonuses
2. Less potential for gains
3. Lower commissions paid to the agent
And guess what? We presently have ten states that are using some form of the 10/10 Rule. Texas will become the 11th state on June 1, 2010. Wisconsin is considering the rule as is Florida (thank goodness we convinced the latter that a 5/5 Rule would be damaging to our senior population in the state!).
I am young. I do not need income immediately. I like to buy the biggest premium bonus products that I can buy. Luckily, the state of Iowa does use the 10/10 Rule, or I would be out of luck.
If you are tired of this rule, there is only one thing you can do: keep making suitability annuity sales and hope it does not spread any further.
Keep on truckin! Thanks for protecting the retirement dollars of our nation’s consumers with indexed products! sjm