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Suitability Criteria

Suitability Criteria

We know you share our commitment to good sales practices when selling annuity products. An important regulatory requirement that must be followed is to recommend purchasing an annuity to a client only if there are reasonable grounds for believing the annuity is suitable.

We encourage you to familiarize yourself with the following information and key documents at the end of this section to better understand our program and help ensure that your clients' applications get processed as quickly as possible. These vital documents are also available on SalesLink®.

Why is suitability so important?

In selling annuity products, it is important that agents assist clients in determining which products are appropriate for their financial situation based on financial needs and objectives as disclosed by the client during the sales process. It is also very important that agents give clients the information necessary to make well-informed decisions relating to the purchase of an annuity. These two pillars of good sales conduct – understanding your customer’s needs and objectives and providing full disclosure - are not only requirements of the law, but they are also dictated by our company’s code of ethical conduct to ensure we are always acting in a manner consistent with our clients’ interests.

How exactly does your electronic review process work?

All applications submitted through the electronic platform are reviewed to determine whether they meet our minimum criteria. Generally, our minimum criteria include:

Remaining liquid assets (after the purchase of the annuity) of at least $20,000;
Remaining liquid assets (after the purchase of the annuity) of at least six months of Approximate Monthly Household Expenses if employed or retired and twelve months of Approximate Monthly Household Expenses if unemployed;
Approximate Monthly Household Income of at least $1500 (exceptions made for applicants with significant remaining liquid assets);
Monthly Disposable Income of at least 10% of Approximate Monthly Household Income (exceptions made for applicants with significant remaining liquid assets);
Surrender charges no greater than 3% on replaced annuities for applicants aged 65 or over;
Annuities funded out of liquid assets not greater than 50% of Total Liquid Assets for applicants aged 65 or over (exceptions made for applicants with significant remaining liquid assets);
Annuities funded out of liquid assets not greater than 75% of Total Liquid Assets for applicants under age 65 (exceptions made for applicants with significant remaining liquid assets);
Applicant may not reside in a nursing home or Assisted Living Facility;
Applicant may not have a reverse mortgage – regardless of whether the reverse mortgage is a source of funding for the annuity;
Applicant may not have an Aggressive Risk Tolerance if the annuity represents a significant percentage of Total Net Worth;
Reasons for purchasing the annuity may not be to qualify for government programs, Medicaid or VA benefits;
Anticipated distributions may not be within the surrender charge period unless distributions are surrender charge free;
Applicant must not anticipate adverse changes in assets, expenses or income during the surrender charge period;
Applicant must indicate remaining liquid assets are adequate to handle emergencies;
In cases of replacement, prior replacements within the prior 36 months (60 months for California or Minnesota applications) may not involve the same agent and same funds.

Applications not meeting these criteria will usually be declined. We purposely share the above criteria with you so you know in advance about our minimum standards and can use them in deciding whether an application should be submitted to our company.

Applications that meet these criteria may be put through an additional screen to determine whether the information on the Suitability Acknowledgement Form raises any other suitability concerns that may require follow up with you or your client.

What happens if an application is denied for suitability reasons?

If it is necessary for the company to decline an application because we do not find reasonable grounds to determine the recommendation was suitable, then you will be informed of our decision to decline the application to avoid any surprise and allow you to discuss the matter further with your client.

Keep in mind that our declination of an application for suitability reasons does not mean the recommendation was necessarily unsuitable. It only means the information supplied by you and your client, from the company’s perspective, does not adequately establish reasonable grounds for believing the annuity is suitable.