If there was ever a loaded annuity question, it’s this one: What’s your annuity time frame? The answer(s) truly depends on who is asking the question, and who the question is being asked to. Let’s take a look at this interesting multi-faceted question from a few viewpoints the client’s, the agent’s, the carrier’s and our beloved annuity industry leaders’.
Client time frame
If we were going to rank these in order, the client’s annuity time frame consideration would be #1 hands down. In annuity agent class 101, the client’s time horizon should be one of the primary (if not the primary) considerations for any annuity recommendation. That means that the 10-year or 14-year annuity that pays such a high commission that agents seem to sell the most of those might not be compatible with the client’s time frame. Shock! They might need a shorter surrender charge time period, and at a minimum, should at least know if a shorter chassis exists. It goes without saying that the annuity chassis and surrender charges have to be fully explained and understood by the client, with shorter durations of the strategy to always be shown if available.
The other client “time frame” that is as important in my opinion is the sales process time frame. A client or prospect that is considering a purchase of an annuity should make that buying decision on their time frame, and after the strategy has been fully explained and the appropriate information given to them for review. High-pressure, one-call close tactics aren’t long-term business models, which means the client should always call all of the shots and dictate the how, when and where of any annuity sale.
Agent time frame
The easy answer to this question from the agent’s standpoint is “who cares?” That’s because the client’s time frame should always be the most important. There really is no agent time frame that should be on any legitimate list. The one time-frame exception that I would challenge agents to embrace is that when you recommend an annuity, you should do so with the goal to be around when the surrender charges go away or when the client plans to access a rider or benefit. I’m afraid that too many agent recommendations are made with no intention of being around for the long term. This is just one of many things that must change from the agent standpoint for the annuity industry to be taken seriously.
As for the sales process time frame, agents need to tread lightly in this area and always ask themselves if they would like to be on the receiving end of the sales pressure they might be inflicting. I’ve been told that the leading Internet annuity hypesters send a high-pressure email every day to people that have signed up to watch their too-good-to-be-true video pitch. That’s in addition to giving the lead to a local agent who is chasing down the prospect as well. I call this “submission selling,” which means pounding the prospect into submission in order to sell them an annuity. It’s no wonder why these Internet-driven agents have such a bad reputation with tactics like this, which is unfortunately being replicated by many “wanna-be” agents as the way to do online business. Sad, but true.
Carrier time frame