It has nearly been one full year of Mutual of Omaha’s 401(k) BGA program in partnership with The Leaders Group. Bob Woods, who serves as the National Sales Director for Mutual of Omaha, has successfully onboarded five of our Leaders Group BGAs with some early success. This program has shown promise for BGAs with downlines containing P&C agencies and agents focused on business market and retirement planning opportunities. 

Mutual of Omaha has a fantastic 401(k) platform with impressive retention rates, focused on delivering great customer service to plan sponsors and participants. For 2021, it is a nice way for BGAs to diversify their distribution and potential revenue drivers.

For more information about the program, please reach out to Bob Woods, listed below. Beth Bryant at The Leaders Group also is available to assist and runs The Leaders Group’s carrier partner relationships. Bob and the team at Mutual of Omaha will be releasing some sales success stories in the coming months that we will share with our BGA community to better quantify the economic opportunity. 

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Bob Woods, AIF
National Sales Director 401(k)
Mutual of Omaha Retirement Services
Phone: 857-939-0489
bob.woods@mutualofomaha.com
www.getretirementright.com

Beth Bryant
Senior Specialist/Partner Relationships
Office: 303.797.9080 x1200
Direct: 720.726.3040
beth@leadersgroup.net

I think we all are relieved 2020 is now in the rearview mirror – a year that was unlike any other with the combination of COVID, market volatility, and a presidential election. There are aspects that came out of this year that were positive for our industry; although, they may have been hard to notice. The day we can turn off the online video meetings and hold in-person events to shake the hands of our colleagues, clients, and friends is hopefully fast approaching!

Coronavirus forced corporate America’s hand and demanded the acceleration and adoption of technology far beyond what we would have thought possible. We now know that employees can work from home effectively and efficiently and have the technological resources needed to keep the wheels of business turning during a pandemic. It certainly was not easy, but one could only imagine the catastrophic economic and social impact such an event would have had 50 years ago. It demanded much from our insurance carrier partners as well. The slow move towards accelerated underwriting and electronic application processing was put into overdrive. The changes they were forced to implement will undoubtedly have a positive impact on the customer experience by making the sales process faster, easier, and more user friendly across the board.

The low interest rate environment has put a strain on the insurance carriers as it pertains to their general account products. As we made the rounds with the carriers these past months, we have noticed a shift in their outlooks for 2021 in favor of VUL, which is obviously good for the broker-dealer business, but also good for you since you are affiliated with us. The adoption of AG 49A also adds to VUL’s attractiveness because it allows the carriers to shift those IUL offerings within the VUL chassis free from actuarial guideline constraint. With the new administration assuming power, there may be a renewed focus on increased taxes and regulation. I believe this will prove to be a net positive for tax-advantaged insurance strategies, either protection or accumulation, as well as general estate or business planning. We expect a large degree of renewed interest in variable life for 2021, and we are here to help if this is a new or traditionally less-focused product line for you.  

At The Leaders Group, we ended up about 23% for the year with over 300 newly registered representatives, 130 of which were retail agents. We are looking forward to continuing that growth for 2021, and we truly appreciate all the referrals our wholesale partners have sent our way. Without you, we would be nowhere. 

This year, the passing of our CEO, Dave Wickersham, was difficult for our organization. Dave would have wanted us to press on and continue to offer you the best customer service we can, and that is exactly what we intend on doing. 

We sincerely wish you the greatest success for 2021! Remember, “Doing the Right Thing is Always the Right Thing!^TM”

Charles Arnold, Sales & Business Development Team Manager

The RILA history is one that started slow but is really picking up steam over the last couple years, not only in the industry but at The Leaders Group as well; that is why our representatives should pay attention to this product if they are not aware of it and selling it already. In fact, LIMRA recently published U.S. Annuity Sales Estimates for year-over-year growth 2018 vs 2019 showing that while VA’s were down 8% and traditional index annuities up only 13%, RILA’s made a huge jump and were up 63%.  The attraction here is market participation with downside protection at no cost to the client, and Lincoln has one of the top contracts out there right now. Along with some of the highest – if not the highest – market cap rates in the industry, additional product design options that you do not see on a lot of other “Buffer Annuities” is another reason many financial professionals seem to be flocking to this contract.

The Lincoln Level Advantage contract has 1-year, 6-year annual lock, and 6-year terms to choose from, and you can track an index (four to choose from or combine), select variable subaccounts (14 to choose from), or a combination of both. You can also choose to design these contracts with an account value or return of premium death benefit.

If you choose the 1-year term and track an index, you have a 10% or 100% buffer/protection to choose from. At the end of that 1-year term, you have the option to renew the contract at the current cap rates, do an internal exchange to another product, do an external transfer to another product, or liquidate the account.

If you choose the 6-year annual lock contract and track the index, it operates like the 1-year contract except your cap rate is locked in for six years at issue of the contract, and you only have the 10% buffer/protection option. At the end of that 6-year term, you have the option to renew the contract at the current cap rates, do an internal exchange to another product, do an external transfer to another product, or liquidate the account.

If you choose the 6-year contract and track the index, it is a 6-year point-to-point and your cap rate for that period is locked in at issue of the contract, and you have 10%, 20%, and 30% buffer/protection options to choose from. At the end of that 6-year term, you have the option to renew the contract at the current cap rates, do an internal exchange to another product, do an external transfer to another product, or liquidate the account.

As an example, with the current cap rates this contract has, it is so strong that if you had a client that chose to do the 6-year term contract, S&P Index, account value death benefit, and 10% buffer/protection, they would not even have a cap. The current cap rate listed for this design is “uncapped.” So really, you just have market participation with a 10% buffer/protection and no fees. If your client were to choose the same thing as above, except they wanted 20% protection on the downside, they would have a 500% cap over the 6-year point-to-point term. So, the downside with this option is that if you put in $100,000 and grew it to $650,000 over the next six years, you would only be able to keep $600,000 of it. I would assume that most financial professionals would chuckle at that sentence, but I could be wrong.

The last thing that I want to mention is that if you do use any of the 14 different variable subaccount options within any of these contracts, there would be product charges and subaccount charges on the portion of money that is invested in the variable account options only.

If you would like to learn more about the Lincoln Level Advantage contract and the different designs that you can create, please give me a call and/or click on the links to the marketing material and Lincoln Level Advantage website below.

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Contact Micah Hesting for more information:
Relationships/Business Development Strategist
Ext. 1130
micah@leadersgroup.net