Stifel Financial (Ticker-SF)
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Insurance and Annuities

Insurance and AnnuitiesStifel’s Insurance and Annuity Marketing Department is available to assist you in providing your clients the technical assistance they need in areas such as life, disability, and long-term care insurance as well as tax-deferred annuities, representing the most competitive companies and products in the industry.

The firm represents over 75 of the highest-rated companies in the industry. In addition to direct support, department professionals can work with you to provide you with superior service directly through these companies. They can put you in contact with local insurance professionals to assist you in determining the appropriate solution for your clients regarding insurance and annuities, and work closely with you on marketing needs.

Life Insurance

A life insurance policy is a contract between a policy owner and the insurance company. If the named insured dies while the policy is in force, the beneficiary will receive a payment (death benefit) from the insurance company. Life insurance can also be used to create an estate, pay estate taxes, fund a business transfer, replace a charitable gift, equalize inheritances, or as a possible solution for other perplexing financial problems.

Types of Life Insurance

  • Term Insurance – Term insurance provides death benefit protection for a stated period of years and can be purchased with level premiums that typically last for 10, 20, or 30 years. Generally, term insurance policies do not have cash values.
  • Whole Life – As a form of permanent insurance, whole life is a guaranteed contract that offers level premiums and death benefits, as long as the premiums are paid on time. Because whole life is guaranteed, the premiums typically are higher than other permanent policies, and the policy is not flexible. Since the guarantee is based on the claims-paying ability of the insurance company, it is important to choose a reputable firm. The cash value component has the ability to increase based on the performance of the insurance company’s portfolio.
  • Universal Life – Universal life is a type of permanent insurance suitable for the person who wants less cash value guarantees than whole life but likes the idea of greater flexibility. Premiums on a universal life policy are usually lower than they would be on a whole life plan, but so is the cash value build-up. Most universal life policies are tied to interest rates. Depending upon the plan, the interest rates can either be fixed or based on current assumption, where the rates may change every year. Variable universal life plans are also available, which allow you to choose from different subaccount investment options. This feature enables you to have your cash value component tied to the market instead of to an interest rate. However, you must remember that you assume greater risk with a variable universal life plan in exchange for the potential upside of the market.

With permanent insurance, such as whole or universal life, the cash value grows tax-deferred, and withdrawals – up to the cost basis – may be taken free of income tax. Additional dollars may be accessed by taking tax-free loans. However, withdrawals and loans will reduce the account value and the death benefit, and with certain policies, withdrawals prior to age 59 12 may be subject to a 10% federal tax penalty.

Century Securities can assist you in custom fitting a plan specific to your clients’ needs.

Important Disclosures

 

Long-Term Care Insurance

Long-term care can be defined as the variety of health and supportive services necessary for adults who require some form of daily, ongoing assistance outside of the acute care unit of a hospital. It can also include home health care, adult day care, assisted living, hospice care, and homemaker services. The types of care available differ widely between insurers.

According to the U.S. Department of Health and Human Services (September 2008 National Clearinghouse for Long-Term Care Information), at least 70% of people over the age of 65 will require some form of long-term care services at some point in their lives.

Types of Policies

There are two main types of policies:

  • Traditional Long-Term Care Insurance – Requires paying annual premiums to offset the costs of paying for long-term care.
  • Single Premium Hybrid Policy – Requires a single premium that secures both a life insurance benefit and long-term care coverage. If needed, the policy provides specified coverage for long-term care. If long-term care is not needed, clients may choose to have a death benefit paid to the named insured’s beneficiaries or elect a “return of premium” option, in which the named insured would receive their original single premium back (subject to possible tax implication).

Important Disclosures

 

Disability Insurance

Disability is defined as an illness or injury that prevents an individual from working. With government or employer-provided disability benefits, there may be stringent eligibility requirements and the plans may not replace an adequate portion of your salary or may only pay benefits for a specific time period. Purchasing an individual long-term disability plan may be the difference between being able to provide for one’s family and falling short on their monthly obligations.

Individual long-term disability insurance plans:

  • Typically are more flexible than employer-sponsored plans, and they are portable. This feature of portability simply means the named insured owns them as opposed to the employer owning them.
  • Have premiums based upon health, age, gender, salary, benefit limits, and occupation.
  • Will pay benefits if the named insured is unable to perform the duties of their specific job or could pay benefits if they are unable to work at any job.
  • Are paid for with after-tax dollars; thus, the benefits are not taxable.

Stifel offers a number of long-term disability plans available through a variety of well-respected insurance providers.

 

Tax Deferred Annuities

Stifel offers a range of fixed and variable annuities best suited for your clients individual needs.

Advantages of Annuities

  • The power of tax deferral works toward producing larger retirement assets.
  • Allows your clients to gain control over when their earnings become taxable.
  • Generally, there are no upfront sales charges.
  • Annuities can provide a death benefit to guarantee your clients heirs the principal and can provide guaranteed future income for current owners. (Guarantees are based on the claims-paying ability of the issuing insurance company, and additional charges may apply for some contract features.)
  • Annuities can provide guaranteed lifetime monthly income for one or two lives.

Types of Annuities

  • Fixed Annuities – In a fixed annuity, funds are invested for a guaranteed interest rate for a fixed number of years. Interest may accumulate or be withdrawn as needed, paying taxes only on the amount withdrawn. Typical terms range from one to ten years.
  • Fixed Index Annuities – Interest credited to a fixed index annuity is linked to the performance of a stock market index. However, participation in any gain experienced by the index will be limited to the percentage of the gain set by the insurance company. This limits upside earning potential, while the insurance company helps to protect principal in negative markets through a minimum guaranteed contract value.
  • Variable Annuities – With a variable annuity, funds are invested in a professionally managed portfolio of stocks, bonds, or both, depending on the selection. Returns vary depending on the performance of the portfolio. Earnings may be withdrawn as needed, paying taxes only on the amount withdrawn. Many of the portfolio managers are the same as today’s most popular mutual funds. Variable annuities also offer an optional guaranteed future income payment regardless of the contract’s subaccount performance. Variable annuities also offer guaranteed death benefits that guarantee the named insured’s beneficiary at least the amount paid, or more, regardless of the portfolio’s return. Since the living and death benefit guarantees are based on the claims-paying ability of the issuing insurance company, it is important to choose a financially secure insurance company.
  • Immediate Annuity – An immediate annuity generates guaranteed income as soon as it is purchased and for a set number of years or for one or two lives. Immediate annuities can be either fixed or variable.

Important Disclosures