The senior marketplace is struggling in this economic downturn.

Current investment yields are low, forcing seniors to invest in low-yielding accounts. If a retirement plan assumed the assets would grow at 5%-6% (a very reasonable assumption a few years ago), many seniors, after taking substantial losses, are feeling lucky just to break even.

Times like these point up that some of what was “sold” to seniors doesn’t really work for them.

Seniors generally have three main goals for their insurance–accumulating assets, distributing assets as income and efficiently transferring assets to heirs. The problem is, most products are singularly focused; and customers don’t think in terms of accumulation, distribution and wealth transfer. Many times a product is sold on the “sizzle” without real regard for the customer’s goal. For example, an annuity may be a tremendous accumulation vehicle–and an easier sale for a producer to make–but it may be weak for efficient wealth transfer. There’s a better way.

Accumulation. How best to accumulate assets on a tax-favored basis? Certainly annuities work well. For seniors, the fixed, multi-year guarantee or consumer-friendly fixed indexed annuities give upside potential while eliminating or limiting downside loss. That’s key because reducing risk is of utmost concern today.

Fixed annuities continue to sell well, especially when average 5-year bank certificate of deposit rates are just above 3%. Sure, gone are the days of the 5% multi-year guarantee rates, but annuities just can’t be ignored.

Some annuities are not only very consumer-friendly but also unique and quite easy for a customer to understand.

Consider: A client is playing blackjack with the usual rules–if the client beats the dealer the client wins; if it’s a tie (push), the client receives the bet back; and if the client loses to the dealer, the client loses the bet. Is this game really customer-friendly? How long will the client play?

What if the rules were changed so the client wins not only when beating the dealer but also if tied (pushed)? If the dealer wins, what if the dealer gives back the bet and invites the client to play again? How long would the customer play the game now?

There’s actually an annuity like that today. Granted, it has forced some producers into a new direction of how to sell annuities because it has terminology like “performance triggered” accounts, but it’s extremely customer-friendly, and it certainly protects downside risk while providing upside potential.

Income distribution. The most important feature over the past few years, in variable annuities, has been the ability to provide an income stream, either on a level or increasing basis.

It’s true that VA sales have sputtered recently. But those income-for-life type riders have become an important feature on fixed annuity contracts too. So, customers who are looking for maximum distribution advantages now have some tremendous fixed annuities from which to choose.

In today’s income distribution market, guaranteed income, income-for-life, and guaranteed increases based on common price changes like the consumer price index are readily available. These annuities are providing customers a customizable solution to fit their needs.

Wealth transfer. If the senior is insurable, life insurance is the perfect vehicle to transfer wealth on a tax-advantaged basis. Products offering full or simplified underwriting, tax-free death benefits, and perhaps even coverage for long term care expenses, and/or a guaranteed return of premium are certainly consumer-friendly.

For maximum wealth transfer, a single premium life policy with no bells or whistles is perfect. One carrier offers a $100,000 single premium policy on a healthy female, age 65, a guaranteed death benefit of just over $353,000 (with cash surrender values of about $80,000 for the first 15 years). This is terrific leverage.

Some are starting to offer life/LTC combo policies. These are good for seniors who shy away from stand-alone LTC contracts because of cost or concern that benefits will never be used. For the same $100,000 as above, the woman’s guaranteed death benefit isn’t as high (only $167,000) but she gets a 100% guaranteed return of premium and almost $500,000 available for qualified LTC expenses.

Successful producers will be those providing seniors a choice. After making a short presentation about accumulation, distribution, and transfer goals, they will help seniors choose the product that will work best for them. That sale will be one that works for the producer, too.

Michael S. Pinkans, CFA, CFP, CLU, ChFC, is the products and markets director for Brokerage Resources of America, in the Barre, Vt. office, and a registered representative and investment adviser representative for ING Financial Partners, Inc. His e-mail address is: MPinkans@aol.com