Big Case Alert- The Reversionary Annuity

Dean Potter is the original mastermind behind the Reversionary Annuity Product. Recently he sent me a case study outlining the largest case sold to date for this product. Take a look and tell me what you think.


The prospect was a wealthy individual (Wife & two daughters both married) with an estate of over $18,000,000, most of which was a Bank Holding Company and Banks that he owned.  When I became involved, I found he had already had completed his estate planning done by a local life agent and his attorney.

After reading an article I wrote about the Reversionary Annuity in a business magazine, he gave me a call to meet with his wife, the bank’s attorney.  He said, he thought I might be able to do something that his insurance agent affordably could not do. He ultimately purchased a Reversionary Annuity that would provide his wife $20,000 per month for life upon his death, which included the Return of Premium Rider.  Annual premium was over $55,000 annually.  The Present Value of this life income was well over $6,000,000.00

 What was the problem he was trying to solve? 1.]  Upon his death who was going to provide his wife with her current income of $20,000/mo?

 His wife, who now owned the bank, would not be able to take his place in the Bank management, she was a banker’s wife with no banking experience – yet now she would need to rely upon the Bank’s continued dividend success for an income of $20,000/mo. in order to maintain her living standards. The only option she would be forced to sell the assets to have income. According to his words, the bank was a gold mine and sufficient management to sustain it. The stock was placed into a family trust.      

 The Reversionary Annuity solution would provide her the needed income – independent of the Insured’s asset and was not dependent in any way to the future success of his business.

The premium payor/policyholder was the Bank, who purchased the coverage on the insured as “Key-man Insurance”.  The Bank deducted the premium from their gross income and the insured paid income tax on the premium personally as a non-cash contribution from his employer, per IRS Section 162.

CONCLUSION:  (His words)  “If I die first, my wife is taken care of – guaranteed $20,000/mo. for life and the Bank’s financial future is not burdened with an expense of $240,000 annually.  The ownership (family trust) can do what it wants to without financial pressure. If she dies first, then I will be returned all paid premium, net cost $0.00 – I can’t lose!”    Very nice commission and in this case for a need that only the prospect saw and took action to solve!

How many clients do you have like this banker?  Why don’t you offer them the same opportunity to guarantee their survivor a lifetime of income independent of the assets?


Dean M. Potter

About Jeffrey Berson

40 years in and around the industry has made Insurance a part of my DNA. I have had the pleasure of working with and for some of the greatest minds in our industry. My "Bersonal" View is an attempt to capture some of the best ideas, the best concepts and the best practices in a way that can lead to success for others. It will certainly be my point of view, so please...don't take it "Bersonal".
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