Carriers Try To Take

“The program walks the client in excruciating detail through the seven challenges to retirement: inflation, taxes, longevity, the death of traditional pensions, ‘social insecurity,’ health care and investor errors,” says Greg Salsbury, executive vice president of Jackson National Life Distributors.

A powerful section of the presentation is devoted to video testimonials of retirement crises actually faced by real people, Salsbury says. For example, a United Airline pilot talks about the demise of his company’s pension plan, leaving him with 75% less retirement income than he had planned on.

Nationwide Financial Inc., Columbus, Ohio, is simplifying illustrations and sales and marketing materials offered to advisors.

“We’re focusing on when it’s appropriate to use annuities for accumulation and when for income,” says Mark Phelan, senior vice president of Nationwide’s individual investment group. “It’s a simple story. The simpler we make it for advisor, the simpler it is for the consumer.”

Diehl of the Hartford says his company, too, is focusing new training material on the differences between the accumulation and retirement income phases of life.

The program, still in planning, will ask clients to develop an income plan based on existing assets and projected expenses and to see the difference between income needs and their desired lifestyle.

That would set them up for Hartford’s message that a variable annuity is guaranteed income they can’t outlive.

“The sales proposition to boomers is that the definition of retirement is changing,” Diehl says. “People are going to be retired a long time. They can expect to live 10 to 30 years or more, so they must have long-term objectives. They probably have not done any kind of calculation on how their investment portfolios relate to a retirement income plan. We will emphasize that VAs marry income and death benefit guarantees with the upside potential of equities and show them how that fits into a retirement income plan.”

Minnesota Life Insurance Company, a division of Securian Financial Group, St. Paul, Minn., has introduced a couple of new campaigns.

One, “Wising Up,” targets women, providing advisors with marketing tools emphasizing simple points such as inflation protection and female longevity. Advisors find those messages can be communicated easily in workshops.

“‘Wising Up’ has played well,” says Kerry Geurkink, director of annuity marketing for Minnesota Life. “A lot of advisors are using that as a marketing approach.”

Perhaps the most intimidating part of buying an annuity is the paperwork, experts say. They note regulations, such as suitability requirements, have made much of the red tape unavoidable.

Still, some are making serious efforts to make it less onerous.

ING Americas, for example, has offered a VA that has been streamlined by offering few options, making it simpler to understand, according to a company spokeswoman.

Security Benefit has automated its distribution system so that once an individual has filled out a form for, say, life insurance, the information is readily shared with other forms. “It eliminates redundancy,” says Security VP Garvin.

“Sure, the paperwork puts off some people,” acknowledges Jackson National’s Salsbury. “But our products are intermediated by an internal advisor who helps producers with the process, so it’s not as much of a challenge as you might think.”

Nationwide offers what it calls its Ambassador Service to preferred producers, notes Phelan. “We bring in an advisor to fill out the paperwork for them based on the information they give us over the phone.”

It also has a team of about 20 people tackling the problem of simplifying the paperwork, Phelan says. “They’re looking at every application and contract and trying to simplify it.”