Thoughts From a Former Agent

Q: I found your article very interesting reading as an agent that has been out of the industry for 10 years and now just passing my exam and getting back into it.

You are right, the commissions are... much to high, so EIAs become driven by greed rather than the right solution for the client.

The EIA has also become more and more complex to understand for the client and agent. I was one of the first to offer a EIA toward the end of 1994 with Keyport Life before my retirement . That first contract was simple to understand.

It has a reducing surrender charge for 5 years and then you could take all your money without any penalty. It took the high water mark of 5 anniversary dates and paid the highest of the 5. It paid 90% participation of the S&P 500 stock index. My clients thought that was just great.

I replaced a number of the traditional fixed annuities paying 4.5%. Most of my clients got very high returns over that 5 year period because the market went up, up, up.

I do not know why the indexed annuity have so many moving parts compared the first one that was put out by Keyport Life. I wish I could sell that first one I had over again. I am still looking at all the products in the marketplace and I see a few products that have no surrender charges. They can move the money if they are not happy.

A: I agree with you!

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