1. How to Work Through the PTE 84-24 Form with Your Client
Read through with client during the application process
Having explained many of the concepts during the planning process
Highlight each section
Explain terms they might not understand
It’s important for you to think through how you’ll discuss this form with your clients in advance of them signing it. Your confidence will translate well.
You might want to read through the form with the client and explain the concepts. Highlight each section and explain terms they might not be used to hearing.
Agent use only- Not for use with the general public

2. How to Work Through the PTE 84-24 Form with Your Client
A simple upfront statement about how you’re paid: “Before we get into the business end of or conversation today you undoubtedly would want to know costs involved in working with me and my firm. So, I’d like to give you a quick overview. When you buy an annuity contract, the sales agent receives a commission payment equal to between 2 percent and 10 percent of the purchase price. You don't pay this fee out of pocket, instead, it is paid by the insurance company making money on your investment and deducting various fees from your contract's value. If you die, your contract is terminated and the proceeds pass to your beneficiary. Agents receive higher commissions for selling complex annuities and less for basic annuities.
You can start with a simple explanation of how your paid.
“Before we get into the business end of or conversation today you undoubtedly would want to know costs involved in working with me and my firm. So, I’d like to give you a quick overview.
When you buy an annuity contract, the sales agent receives a commission payment equal to between 2 percent and 10 percent of the purchase price. You don't pay this fee out of pocket, instead, it is paid by the insurance company making money on your investment and deducting various fees from your contract's value. If you die, your contract is terminated and the proceeds pass to your beneficiary. Agents receive higher commissions for selling complex annuities and less for basic annuities.
Agent use only- Not for use with the general public

3. Working with the PTE Form
Simply work through major concepts in the form: The Relationship Between the Agent and the Insurance Company You will be purchasing this Policy through the Agent who is independent of the insurance company listed above and is under no contractual obligation to offer the above insurance company’s Policies. The Agent is licensed and appointed with a number of insurance companies and Policies of which he /she can represent. The Agent may not make any representations or accept any responsibilities on behalf of the insurance company that are not expressly contained in the Insurance Company’s Policy or Policies. The Agent may not waive or modify any terms of your Policy or Policies. The fact that the Agent may receive a commission for the sale can create a conflict of interest.
Simply work through the major concepts in the form:
The Relationship Between the Agent and the Insurance Company
You might say, “I’m an independent agent and am contracted with a number of companies to best suit my clients’ needs. As an agent I can’t promise anything, but the insurance company does make certain representations and takes responsibility for them. They pay me a commission which if you think about it, could create a conflict of interest if one company offers to pay more than another. That’s why we showed you a few different annuity solutions and let you choose which best fits your needs.”
Agent use only- Not for use with the general public

4. Working with the PTE Form
Simply work through major concepts in the form: Compensation The insurance company will pay commissions to the Agent for the sale of this Policy. In addition, the insurance company may pay additional amounts to other third parties that are involved in the marketing, training, administration, wholesaling, supervision of the Agent, or issuance of the Policy. These parties may also allocate a portion of such amounts to the Agent. The commission is paid by the insurance company and one-hundred percent of your premium payment will be credited to the accumulation value of your Policy. The commission the Agent receives for the sale of this Policy to you is _______________percentage of gross annual premium in the first year and ______________subsequent years the Policy is active.
Simply work through the major concepts in the form:
Compensation
You might say, “It’s important to disclose the commissions/fees on any asset that we recommend so you can make the best decision for your retirement purposes. The insurance company pays the commission and not you. Because I am contracted through a wholesaler of these products, the insurance company will pay them as well. They offer to advisors like me the training, marketing support, administration and supervision needed to do our business. You need to know that 100% of your premium payment will be credited day one to your account at the company. The commission I receive on this particular annuity is X% and if you deposit more in the years to come it will be X%.”
Agent use only- Not for use with the general public

5. Working with the PTE Form
Simply work through major concepts in the form: Charges This Policy may include certain charges imposed by the insurance company. These may include surrender charges, bonus recapture provisions, market value adjustments, or fees for optional features available through a rider. The specific charges, fees and provisions applicable to your Policy are available from your Agent or the insurance company. It is important that you understand the charges that may be imposed under the Policy you are purchasing.
Simply work through the major concepts in the form:
Charges
You might say, “Some of the terms here may be unfamiliar to you, but most we have already discussed. First, we talked about the surrender charges which means that if you totally liquidate this contract in any of the first 10 years you’ll have a fee that the carrier keeps that starts at ___% and declines to 0% over the 10 years. If you remember we talked about the bonus of ___ % being vested over the 10 years of the contract which is what is referred to here as “bonus recapture provisions. The market value adjustment is the insurance company’s desire to adjust the surrender value of the contract to keep in pace with interest yields in their investment portfolio. So, again it only matters if you surrender the contract before the 10 years is up. If the interest rates go up, then the MVA adjusts surrender fees up according to the formula in the contract. So, MVAs are simply an adjustment to the surrender charges up or down by the carrier according to interest rates. Also remember, that we talked about the rider fee for the Guaranteed Withdrawal Benefit is .95. So, each year they will take the .95% out of your accumulation value to pay for the income guarantees. Questions?”
Agent use only- Not for use with the general public

6. Working with the PTE Form
Simply work through major concepts in the form: Conflicts of Interest A conflict of interest exists when a reasonable person would conclude that a financial interest affects the Agent’s best judgment when recommending the purchase of a Policy The following are material conflicts of interest relevant to the services provided by, and actions taken by, Agent in relation to the purchase recommendation: • Insurance company payments for the services provided to you may represent a conflict of interest as they may affect the recommendations of the Agent. • __________________________________________________________________
Simply work through the major concepts in the form:
Conflicts of Interest
You might say, “This section is to help you understand the possible Conflict of Interest and advisor like me might have when making recommendations and is really helpful for you to know exactly what is transacting between the company and me. As we mentioned before, we totally disclose any fees or commissions we receive so you can make the choices that best serve you and not me. So, in this case the commission paid to me by the insurance company is 7%, plus I get an additional .50% from our wholesaler DBHC. You chose this annuity because it best serves your purposes, and non of the commissions come out of your premium. Questions?”
Agent use only- Not for use with the general public