Split Annuity Solution Turns $300,000 into over $625,000 Overnight

 Retired clients have a primary fear: Outliving their assets. This strategy addresses that fear on two fronts: Providing a growth opportunity while creating a benefit pool to tap should they need care as they age.

The fact that retirees fear outliving their money comes as no surprise. For those earlier in retirement or even pre-retirees, lifestyle changes or increasing their rate of savings can make a big difference in preventing that eventuality. That said, a good planning approach can do even more.

In this case, a retired client has some under-utilize assets that are not delivering any real growth to hedge against a potential increased future income need. A simple solution is to reposition those assets into something like a Fixed Indexed Annuity (FIA) to deliver both growth potential and protect against losses. Of course, if the primary driver of the client’s fears is paying for care when they need it, that strategy does little to put them at ease. The temptation in that instance may be to look at a care planning product as the solution, but even the annuity-based care planning products don’t offer any real growth potential and fail to address the client’s need for future income even if they remain healthy.

The solution here may be to do both. Using a 70-year-old male with $300K in under-utilized assets as our example client, it’s possible to turn that $300K into more than $625K by repositioning the funds. The combination of the FIA and an Annuity-Based Long-Term Care Annuity unlocks a flexible, tax-efficient solution.

In the example below, the use of a bonus annuity replenishes some of the funds used for care planning at day 1, and the client’s combined account value increased to over $321,000 on day one.

The superiority of the strategy if the client needs care is obvious. The other element, actual growth of the asset even if he remains healthy, is also quite positive. Year one combined surrender value is $321,637 and continues to grow into the future.

The bottom line? A strategy that delivers the growth potential the client desires while hedging the cost of care later in life. Should the client need care, the benefits from the annuity are generally income tax free, making this dual solution approach even more appealing.

Getting hippie at Coachella with MVP Financial!

Coachella Valley, Indio (Palm Springs), CA  
By Luka Erceg, Managing Director, Board member 

This weekend, I was roped into “chaperoning” seven graduating high school seniors to the all-American Coachella Valley Music and Arts Festival—in an RV! Good grief, what was I thinking?!   

“Coachella” is a modernized, rolled-up rendition of Woodstock, The Grateful Dead, and Burning Man. The inaugural Coachella festival was in 1999, coincidentally the same year when three great folks and a stellar team got their “hippie on” and founded MVP Financial Services.    

But back to the RV… 

My son sought to attend Coachella as a graduating “class trip” with friends— a well-earned graduation gift.  In an effort to economize, the plan evolved into an RV trip—another iconic American experience. I now know what it’s like to drive a one-bedroom apartment while sitting on a sofa, it’s actually pretty amazing. 

Like Coachella, MVP Financial was inaugurated in 1999. And much like the festival, it was born from a desire to do things differently. Many of the original team members are still with us today, having set out to challenge the traditional, high-complexity, big company approach to insurance. MVP Financial emerged with the energy, purpose, and a bit of that same free-spirited mindset of Coachella. 

Here’s a thought—call a client and check in on their “hippie!” It’s a fun way to spark a meaningful conversation about the great American experiences they value and how insurance can support those iconic moments for themselves and their families. I am sure we have some Deadheads and Woodstock veterans in your network—invite them to reminisce!   

Just remember, MVP Financial is here, as your all-American partner.  We don’t rely on buzzwords like “integrity,” “gen[eration],” “simplify” or “Ameri[can]” or gimmicks to demonstrate our value. Instead, we focus on delivering real solutions to our brokers with annuity, life, disability, and LTC insurance; and we back that up with real back-office support. 

Whether we’ve spoken recently or not, we’d welcome the opportunity to connect and talk “hippie” with you. We have a lot of hip-new technology, competitive products, and trusted carrier products & relationships to help you serve your clients better.   

Don’t stay tied to with other providers who simply “aim” for better results. Let us share with you how we can be your all-American “hippie” partner—so together, we deliver truly iconic results for your clients.  

MVP Financial Services 
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