Hello and good morning/afternoon. I m with MetLife, and today I d like to talk to you about a new way that your clients can build future, pension

Transcription

1 Hello and good morning/afternoon. I m with MetLife, and today I d like to talk to you about a new way that your clients can build future, pension like lifetime income. But this new annuity product from MetLife the MetLife Guaranteed Income Builder not only provides lifetime income, but the flexibility to customize income payments by choosing the income option and innovative features that best fit your clients needs. 1

2 Here s what we ll cover today. READ SLIDE 2

3 Years ago, retirees could count on receiving lifetime income payments from a pension plan. These days, only 16% of private sector employee are covered by a pension, down from 35% in the early 90s. Social Security has also been something clients could count on to help them through retirement. Is that still the case? With uncertainty around Social Security and fewer pension plans available, you d think that Americans would be saving on their own more than ever. Unfortunately, this isn t always true. According to a recent survey, just over half of those surveyed said they had more savings than they had credit card debt. That s not good! Even those who are saving through 401(k) plans and IRAs, over a quarter of those nearing retirement don t know how they will use their assets in retirement. In other words, your clients need help in turning their retirement assets into lifetime income. So, what will you do? 3

4 Traditionally, retirement income may have been generated from conservative, interestbearing investments. However, with interest rates still close to their all time low, your goto income generating products may not generate enough. Source: Source: ChartSource, S&P Capital IQ Financial Communications, March 31,

5 Equities, on the other hand, are at an all time high. This might seem great, but if your clients were to invest now, they d be buying at the top of the market, and would risk losing too much if the market declines while they re taking income. Source: March

6 What is left? Let s look beyond traditional retirement planning products and start to plan for your clients income before retirement. Because if you wait until they retire to plan for income, your clients may miss out on a high level of future lifetime income. 6

7 Typically, you d use these products to help your clients accumulate assets for retirement. These products are lined up from most conservative to most aggressive. Cash might include TIPS, Treasuries, CDs and Money Market accounts. 7

8 Here are some typical products you might use for generating income. I d like to draw your attention to the bottom product the deferred income annuity. While this product is in the income spectrum, one of the keys to maximizing income from a deferred income annuity is purchasing the annuity before retirement. And deferred income annuities are one of those products that provide guaranteed lifetime income. Not all these products do. Let s take a quick look at how you might talk to clients about the different incomegenerating products available and the kinds of expenses they might cover. 8

9 When you re talking to your clients about income, the million dollar question is..how do you create a diversified retirement income strategy that s going to help pay for the retirement you want to live? First, what s your clients vision of retirement? What do they want to do? Where do they want to live? Second, how much will that vision of retirement actually cost? What will their expenses be? How will they change once they retire? Third, where will the income to pay these expenses come from? Fourth, how do your clients sources of income and projected expenses match up? Is there a gap, and if so, how much? If they do have a gap, how will they close it? Fifth, what alternatives do they have to deal with unpredictable expenses? When you look at the income column here, the dependable income sources are going to cover your clients retirement needs. Not their wants, but their needs. The deferred income annuity falls into the dependable income source category. Let s take a look at MetLife s newest deferred income annuity to see why

10 Introducing the MetLife Guaranteed Income Builder annuity, designed to help client alleviate the risks of longevity, liquidity, rising costs and market and sequence of returns risk by offering lifetime income, options for cashing out or taking some or all income earlier or later, increasing payments over time and all with no market risk. Clients who want their income payments to help keep pace with rising costs by increasing each year can select the Increasing Income Option. The initial lifetime income payment will be lower with this option than without it, but it will increase each year thereafter by the percentage that they select 2%, 3% or 4%. We ll cover specifics about these other features later in the presentation. 10

11 Here s how the product works: The Guaranteed Income Builder shouldn t be the only product in your clients retirement strategy, but by using a percentage of their assets, they may have more options for the rest of their assets. That s because the Guaranteed Income Builder provides future income payments that lasts as long as your clients live. It provides a pension like stream of income payments, though clients can fund it all at once or gradually over time whatever works for them. Clients will choose their income start date up front. Their future income payments are based on how long they wait between the time of purchase and the time they take income payments, as well as their age and purchase amount, among other things. Since their income payments are determined at purchase, they ll know right from the start how much to expect, even if they make a change. The Guaranteed Income Builder gives clients the ability to make certain changes like moving their income start date and getting most or all of their money back if they decide they don t want lifetime income after all. We ll talk more about that later. 11

12 Since clients know how exactly how much they ll get each time they make a purchase payment, they may be able to spend and invest their other assets more effectively. That could mean enjoying their early retirement years more or investing in additional growth opportunities. Finally, your clients money is not invested in the market so there s no risk of their income payments declining due to market downturns. Instead, their income payments and the Guaranteed Income Builder are backed by the financial strength and claims paying ability of MetLife Insurance Company of Connecticut and in New York by Metropolitan Life Insurance Company, both MetLife companies. MetLife is a company known for its long history of strength, leadership and integrity. Knowing this may help them feel more confident in their choices. 11

13 Here are the product details for the Guaranteed Income Builder. READ SLIDE In Florida, clients may elect to begin income payments at an early income start date, which is a date that is at least thirteen (13) months after the last purchase payment has been received by MetLife, but precedes the earliest income start date shown on their income payment table. 12

14 [Review slide and the following information.] For Lifetime Income for 2 lives and Lifetime Income with Guarantee Period for 2 lives For Lifetime Income for Two options, not including with Cash Refund income option, you can select reduced income payments for the survivor equal to 75%, 662 3% or 50% of the total purchase payment(s), and is not available with Cash Refund income option. Income payments will not be reduced during the guarantee period, if applicable, even if one person passes away. The 100%, 75%, 662 3% or 50% benefit continuation options, if qualified, may be limited due to IRS regulations. Benefit reduction may be upon the death of the primary annuitant or either annuitant (i.e. upon the first death). For Lifetime Income with Guarantee Period for 1 or 2 lives Availability of some guarantee periods may be limited due to IRS regulations, administrative considerations or at MetLife s sole discretion. [Comment: This slide should also discuss how spousal continuation will work, including footnote 3, which references what happens if the annuitants are no longer spouses. See page 6 of the client brochure (same page this material was taken from)] 13

15 Now, let s talk about some of the key features of the Guaranteed Income Builder and how they may be able to help your clients tailor pension like income to meet their needs. These features include: Lifetime income payments for one person or a married couple with income options that include a guarantee period or cash refund The flexibility to fund it all at once, in one lump sum purchase payment, or over time, with multiple purchase payments. Please note that the last subsequent purchase payment must be made at least 13 months before income payments begin. An option to cash out, cancel the annuity and get all or most of their money back. The flexibility to move their Income Start Date twice, in case their needs change. A Flexible Income Feature that lets clients take a portion of their income earlier or later than originally planned. And an Increasing Income Option that lets clients increase their income payments by a set percentage each year. We ll take a closer look at these key features next and see how they may be able to help your clients. 14

16 With so few pension plans available to private sector workers, many of your clients may be looking for a way to build pension like income over time. The Guaranteed Income Builder is one way for your clients to make multiple purchase payments and build future income a little at a time. Here s an example of how that might work. Let s say you have a client who doesn t have a pension plan, but would like future lifetime income, like the Guaranteed Income Builder provides. She has an IRA, but isn t sure it will provide enough lifetime income. So, she starts by making a purchase payment of $7,000 of after tax money to the Guaranteed Income Builder and designates an income start date of age 65. Each year, she increases her purchase payment by $500. After 10 years, she has made purchase payments totaling $92,500. At age 65, she begins receiving income payments of $7,420 per year for the rest of her life. Those payments equal 7.83% of her total purchase payments. In this example, while it will take this client 12.8 years of income payments to get back the money she put into the Guaranteed Income Builder, she has a good chance of living longer than age 78. Based on the Society of Actuaries study, Key Findings and Issues: Longevity, June 2012: Of those women who live to age 65: Over half will live to age 85: If your client lives to age 85, she ll receive income payments 15

17 totaling $144,800. Nearly one third will live to age 90: If your client lives to age 90 she ll receive income payments totaling $181,

18 Now here s an example of a client who funds the Guaranteed Income Builder all at once, using a lump sum purchase payment. This example also shows the benefit of waiting a few more years to take income payments. Let s say you have a married couple, both age 58 who would rather make a lump sum purchase payment and wait to take income payments. They are both currently working and want to create guaranteed future income payments to help cover everyday expenses in retirement. They decide to make a $100,000 purchase payment. They know they want to wait at least 7 years. Before they make their decision, they want to see how much they d get if they wanted a few years longer. The chart here shows their income payments at age 65, then each year up to 3 years later. As you can see, the longer they wait to take income payments, the more they ll get. This is the power of deferral. Now, think about this According to the Annuity 2000 Mortality Table; Society of Actuaries: Among married couples, both age 65, there is a 1 in 2 chance of one spouse living to age 92 and a 1 in 4 chance of one spouse living to age 97. If the couple starts receiving income at age 65, and one or both live to age 92, they ll receive income payments totaling $212,243. If either one of them lives to age 97, they ll receive income payments totaling $251,547 16

19 Sometimes, clients just want to know that they have a way out of certain products, in case their needs change. The Guaranteed Income Builder provides that opportunity. Clients who want the option to get money back at some point in the future can elect, at issue, the Cash Out Option. Their income payments will be less than if they didn t elect the option and the option is irrevocable once elected. But, if they haven t started lifetime income payments and decide they don t want it after all, they can exercise the Cash Out Option and get all or most of their money back. That will cancel the annuity as well. Since the Guaranteed Income Builder was designed to be part of a long term retirement income strategy, the return of your clients purchase payments will be subject to a withdrawal schedule if they exercise the Cash Out Option before year 7. This chart shows how much they ll get back. This feature is only available with income options that include either a cash refund or a guarantee period. The ability to receive a full withdrawal from your client s contract may not be available or may be limited. If the Cash Out Option is not elected, or if the Option is unavailable for election, your client s contract will not provide for the ability to make a full withdrawal from the contract. May not be available with all firms or in all states. 17

20 If your clients choose an income option that includes either a cash refund or a guarantee period, they have the flexibility to move their income start date twice by a maximum of five years in either direction of their original income start date if their needs change. If they choose to wait a little longer, they can receive more income per year, and if they decide to begin income payments early, they ll get a little less. But they ll know from the day they purchase what those income payments will be, so they can make an informed decision. This example shows a male, age 55, who choose Life with Cash Refund with a $100,000 purchase payment. At issue, he chose an income start date of age 65. If he changes his income start date, these are the annual income payments he would receive at the different ages. If clients select a later income start date at contract issue, they ll receive higher income payments than if they moved your income start date to the same later date after purchase. In Florida, clients may elect to begin income payments at an early income start date, which is a date that is at least thirteen (13) months after the last purchase payment has been received by MetLife, but precedes the earliest income start date shown on their income payment table. 18

21 Designed to help give your clients access to their money when they need it, the Flexible Income Feature lets them take a portion of their income earlier or later than their original income start date. They ll just need to divide their income into two segments, choosing how much (10% 90%) of their income payments they d like to take and when they d like to take them. Both start dates need to be within the 10 year window (five years prior and five years after your original start date). This feature is only available with income options that include either a cash refund or a guarantee period. 19

22 The Increasing Income Option is another of the Guaranteed Income Builder s flexible features. This one can help clients keep pace with rising costs as the years go by. If your clients want this feature, they ll need to elect it at contract issue and designate how much they want their payments to increase each year. They can choose 2%, 3% or 4%. Then, on each payment anniversary, their income will increase from the previous year s amount by the percentage they choose. For example, if your client s monthly income was $1,000 and they had elected the Increasing Income Option with a 3% increase, they d receive $1,030 the second year, $1, the third year, and so on. Keep in mind that their initial payment will be less than if they had not elected the Increasing Income Option. However, your clients payments will increase each year thereafter, for life. The Increasing Income Option is only available for contracts in which each owner is at least 59 ½ at the time payments begin. This option must be elected at issue and is irrevocable. 20

23 First, who is the target market. Who should you be talking to? Based on our consumer research, we ve found that these types of clients are interested or may be a good fit for the Guaranteed Income Builder: Individuals age may be a good fit if they are looking to purchase future income gradually over time. Individuals age may be a good fit if they re looking for lifetime income in 7 10 years Also Those who need reliable pension like income those who don t have a pension or other sources of lifetime income for retirement, or just may not have enough money coming from other income sources. Clients with retirement assets at a former employer Individuals who have assets they could roll into an IRA and turn into future lifetime income payments. Those planning on a long retirement Individuals who anticipate living a long and healthy life and want to make sure their income lasts as long as they do. 21

24 Once you have an idea of the kinds of clients that might be interested, here are a few questions you might be able to use to open up the conversation. 22

25 Now let s get to the positioning of the product. Based on our extensive consumer research, here is a one sentence positioning statement that may help you position the product with certain clients. READ SLIDE and callouts 23

26 Overall, this product is about income. So our main positioning points focus on income and the different ways it meets client needs: Income for life, income for living, and income for individual clients. 24

27 When you talk about the ways the Guaranteed Income Builder can provide income, you can use this client tested language. READ SLIDE 25

28 READ SLIDE 26

29 READ SLIDE 27

30 Here are some next steps you can take to start selling. And, make sure you take a look at our new and improved income website: it will go live on April 28th. We ll be posting sales resources like video, sales ideas and more! 28

31 It is important for clients to feel confident in their purchases. Many people already know and trust MetLife, so your job is that much easier. MetLife has been around for over 140 years, insuring the lives of the people who depend on us. READ BULLETS 29

32 Are there any questions? 30

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