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If you have clients with annuities that have Market Value Adjustments or MVAs, it may be worth looking up their current values to uncover additional sales opportunities.

Market Value Adjustments work as an inverse bond relationship.

In other words, if interest rates were HIGHER when your client bought an annuity with an MVA and today they are LOWER, chances are, your client might have a positive MVA.  That is: a value that is HIGHER and covers their surrender charge and then some.

Consider This:

For example, I was working on a case today where a client had an older policy that was 5 years old and still in surrender with an account value of $350,000, a surrender charge of $13,000 and a positive MVA of $30,000.  Rates have gone down since the original purchase causing a positive MVA.  So in reality, the client could walk away from their contract with their account value PLUS a credit of $17,000, to total $367,000.

Where appropriate, you can replace older contracts in surrender to take advantage of these credits.  This particular client’s annuity was an index annuity, and not only were we able to reap the benefit of the MVA credit, but we were also able to add on an income rider to guarantee income for life and increase their cap rate.

You can check most contract values on carrier websites nowadays.  With a little research, you may uncover your next big sale and provide an existing client with a better situation.

Contact us today for more info, what to look for, and how to take advantage of these types of opportunities.