Legacy Annuities: Knowing when to hold (and when to fold) an annuity calls for technical know-how, unbiased analysis

August 7, 2018
Toney Falkner, Managing Partner of Private Wealth Management of North Carolina

Toney Falkner typically refers his clients to external, commission-based brokers for their insurance needs. Traditional insurance products, laden with commissions, conflict with his fiduciary mission. He thought there must be a better way to address his clients’ insurance needs than to send them to a broker who doesn’t necessarily share the same ethos.

“When I read about DPL in an industry publication, I immediately saw the benefit of working with their team to offer commission-free insurance solutions to my clients,” said Falkner. “One of the key advantages was that I didn’t need to obtain an insurance license to implement insurance. With DPL, all I needed to do was become a member to utilize their licensing and expertise.”

CHALLENGE: Legacy Annuities, Forced Annuitization

Falkner joined DPL, and shared details on two policies owned by a potential new client with his lead DPL consultant, Jonathan Barth. In this case, the policyholder believed he was being forced to annuitize both policies and was in search of a better option.

“Toney told me that a family member of one of his clients was being forced to annuitize a contract due to his age,“ explained DPL consultant Jonathan Barth. “The challenge was that the policyholder doesn’t need the income currently and would like to continue deferral of the contract. This situation is extremely common as clients are living longer in their retirement years and have old products with low forced distribution ages.”

SOLUTION: Hold One, Fold One

For the first annuity, DPL explored several product options and found they could transfer the existing annuity to a new contract with a higher age limit, thus avoiding the forced annuitization.

When reviewing the second variable annuity policy, DPL discovered an option to defer annuitization for another 10 years, a feature Falkner wasn’t aware of. In this case, it was in the policyholder’s best interest to stay in the current product.

The policyholder’s problem was solved. For Falkner, the experience confirmed he had made the right choice to work with DPL.

“For me, the value in the time I saved by not having to research the policy myself, and the quality of DPL’s product analysis was enormous,” said Falkner. “It’s good to know that there are insurance experts out there who are truly objective. DPL’s insight helped me recommend the best solution to this investor in his time of need. Now he is a client. I will definitely be consulting with DPL in the future.”


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