Insurance Q&A

April 29, 2013

Time is running out for Social Security’s “file and suspend”

Filed under: Financial Planning,Retirement,Social Security — rrroark @ 6:01 pm

Looming changes to the Social Security system meant to shore up its pending insolvency have created a renewed sense of urgency for maximizing Social Security benefits for high net worth clients. Because these clients are often financially secure enough to delay their Social Security benefits past the normal retirement age, when they can reap a higher benefit level, they have become the likely target of the impending Social Security reform. There is a strong possibility that the powerful file and suspend strategy for maximizing Social Security benefits will not survive the transition, so it is time to engage your retirement-aged clients in a Social Security planning discussion before it is too late.

Read the rest at Time is running out for Social Security's "file and suspend" | LifeHealthPro.


April 19, 2013

An annuity with boomers in mind

Filed under: Annuities,Indexed products — rrroark @ 2:30 pm

For much of the past decade, variable annuities were “destination” products for clients’ retirement-oriented dollars, and with good reason. Variable annuities gave the vast baby boomer generation, then pre-retirees, market-linked accumulation potential, provided generous lifetime riders that limited downside risk through guaranteed benefits, and maintained liquidity.

The variable annuity benefit capability, however, is altered today as a result of volatile equity-market conditions combined with the historically low interest rate environment. In the face of skyrocketing costs for hedging, various firms have exited the variable annuity business altogether. Remaining competitors generally have scaled back (and/or increased the price of) the lifetime guarantees offered in their variable products.

For more coverage from our 2013 boomer survey, visit

With more modest and expensive lifetime income guarantees, many variable annuities have moved closer to their originally intended purpose of providing powerful tools for accumulating retirement assets. Importantly for advisors and clients, this repositioning of variable annuities has paved the way for a more rational, financially responsible spectrum of annuities in which the roles played by different products are more clearly delineated and more easily matched to the client’s stage of life.

The contemporary annuity continuum

Variable annuities — which pair income guarantees, liquidity and potential for asset growth with the possibility of market-induced downside risk protection — anchor the more aggressive end of the guaranteed retirement income spectrum. At the opposite end are deferred income annuities (DIAs) and single-premium immediate annuities (SPIAs), characterized by strong income guarantees and stable account values but little or no liquidity and no market-related growth potential. The former clearly have a place for clients still in the retirement-accumulation phase of life, and the latter should appeal to the more risk-averse clients and those squarely in the decumulation phase who seek income they cannot outlive.

Neither, however, may be desirable to many boomer clients, given their stage of life and the present macro environment. With portfolios battered by, and barely recovering from, two stock market crashes in less than a decade, boomers in or approaching the early years of retirement continue to need income growth potential yet cannot afford to sacrifice principal protection for growth. This need for growth, combined with the relative illiquidity of income annuities, may make DIAs and SPIAs a difficult sell to boomers. Variable annuities, however, may be too volatile for these clients and provide too little guaranteed income.

The rest at An annuity with boomers in mind | LifeHealthPro.

April 17, 2013

Union calls for repeal of health care reform law

Filed under: health,healthcare,healthcare reform,Obama,obamacare — rrroark @ 3:06 pm

Worried about a potential loss of jobs for its members, a big roofing union is calling for repeal or “complete reform” of the federal health care reform law.Starting in 2014 under the Patient Protection and Affordable Care Act, employers with at least 50 employees must offer qualified coverage or pay a penalty of $2,000 for each full-time employee.That mandate will result in a competitive disadvantage for roofing companies offering coverage to their unionized workforces through multiemployer health care plans, says Kinsey Robinson, international president of the United Union of Roofers, Waterproofers and Allied Workers in Washington.That requirement creates “an unfair bidding advantage” for smaller contractors who will not have to provide coverage, with the potential for union members to lose work, Mr. Robinson said in a statement Tuesday.As a result, Mr. Robinson said, “I am calling for repeal or complete reform of the Affordable Care Act.”The position taken by the head of the 22,000-member roofers union contrasts sharply with the strong support of the health care reform law by other unions, such as the United Auto Workers.Other calls for repealLast year, the House of Representatives voted to repeal the law, but the Senate did not take up the repeal measure. The House action came after the Supreme Court upheld much of the law, including a core provision that will require, beginning in 2014, most Americans to enroll in a qualified plan or pay a fine.This year, individual Republican lawmakers have introduced legislation to repeal parts of law. For example, Sen. Rob Portman, R-Ohio, introduced legislation to repeal the employer mandate, while a measure proposed by Sen. Orrin Hatch, R-Utah, would repeal the laws individual mandate. No action has been taken on those and other repeal bills that have been introduced.

via Roofers union calls for repeal of health care reform law | Business Insurance.

April 3, 2013

Insurers win Medicare Advantage battle

Filed under: healthcare,healthcare reform,Medicare,Medicare Advanrage — rrroark @ 10:08 am

Health insurers have persuaded Medicare Advantage bidding managers to admit that the underlying cost of care is likely to go up about 3 percent in 2014, not fall more than 2 percent.

But other program changes could still make the 2014 bidding process hard on insurers, according to Humana Inc. (NYSE:HUM).

The Centers for Medicare & Medicaid Services (CMS), the arm of the U.S. Department of Health and Human Services (HHS) that runs Medicare, announced changes in the final “national per capita growth percentage” in a Medicare Advantage “final call letter” — a document that gives a complete description of the factors a health carrier must consider when coming up with the products and prices it will offer to Medicare Advantage program managers.

via Insurers win Medicare Advantage battle | LifeHealthPro.

Blog at