What a bank failure means for consumers and retirees
May 1, 2023 by Ford Stokes
Consumers across the nation are still grappling with the recent bank failure news. For agents and advisors, your clients will have two questions that you might want to prepare for: How does this affect my financial position, and is this the start of something bigger? Here’s some information we’ve gathered along with some suggestions on how to position the bank failure news when speaking with your clients.
Click HERE to read the full story via INN
Wink’s Moore on the Market: I am not sure I feel comfortable with the positioning of this article in InsuranceNewsNet, Ford Stokes, MBA.
Are you suggesting that having your money in an annuity is safer that having your money in a bank?
Admittedly, my review of the 2008/2009 financial crisis revealed that 167 banks failed during this period, but only two annuity issuers became insolvent during same.
That said, most people would take issue with the positioning that a product that is backed by the full faith and credit of the federal government is less “safe” than a product that is only as strong as the claims-paying ability of the insurer offering it.
And isn’t it a little disengenuous to say that “All three of these products [MYGAs, IAs, and IUL] offer protection against loss of principal and offer higher returns than traditional bank CDs?”
While that is true of MYGAs, indexed annuities may return 0% interest; that isn’t a possibility with bank certificates of deposit. While also true for indexed life, IUL has insurance charges associated with it, while CDs do not.
I don’t think we’re comparing apples to apples here.
And SN: you don’t “invest” in insurance products. I believe regulators would take issue with this statement.
While I can appreciate the spirit of this article’s overall message (especially being on the precipice of another bank failure), I think we can do better. – sjm