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Retirement Planning > Retirement Investing > Annuity Investing

8 questions to help you choose the perfect annuity for your client

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Imagine walking into your local sporting goods store and telling the salesman, “Give me your best golf club.” He would inevitably look confused and then ask a myriad of questions: What’s your budget? How far do you want to hit the ball? Do you need a putter? A driver? A sand wedge? An iron? Are you left handed? Right handed? There are many factors that go into choosing the perfect tool for the right situation. 

Choosing the perfect annuity product for your client is like choosing the perfect club. Here are eight key questions to help you unlock the best product for your client. 

1. How old is the client? This is the most vital piece of information. The products we can offer often depend on the client’s age and most annuities have a niche market — there are certain annuities that work best for certain age groups. 

2. How much premium do they have? Minimum and maximum premium amounts vary by insurance carrier and by product. Knowing the amount of money the client has available to place into their annuity will help us determine which one is best. 

3. Does the client need a single premium or a flexible premium product? Does the client want to make a one-time contribution or rollover to their annuity, or would they like to periodically add more money to their account value to build up their retirement dollars? 

(Bonus sales tip: A flexible premium product would be great to add RMDs to if the client doesn’t require them in their retirement.) 

4. Is the client interested in generating a lifetime income? I don’t know about you, but I love getting paid. How great would it be to get paid the same amount for the rest of your life without having to work? That’s what an income rider can provide to clients 

5. If they’re interested, do they want a single or joint payout?Depending on whether the client is legally married, they may like the option for their spouse to continue receiving a monthly income from the annuity if something were to happen to them. Just think of the relief their spouse would feel if they continued to receive a monthly check.

6. Do they want accumulation and growth? This option works well for clients who receive a sustainable income elsewhere, such as a pension, Social Security, investment properties, etc. There are certain products that are great for helping the client build their account values for later in life. These are particularly fantastic to help younger clients to build up their retirement. 

7. Do they want to pass on their legacy to their beneficiaries? This one really depends on how much your clients love their kids and grandkids… I joke, I joke. The act of leaving behind a legacy for the family is often one of the best selling points of most annuities, as the client is presented with the opportunity to remain an influential figure in their family’s lives even after they have passed. They can essentially pass on money to help their children and grandchildren achieve financial security, buy a house, or pay for college tuition. 

8. Do they need any long-term care or health benefits? With people living to be much older these days, you may come across several clients who are worried about their future and whether they will need home health care, nursing home care, or come down with a terminal illness. There are some annuities out there than can help boost the clients’ income stream to help pay for these unexpected expenses. Some people consider me a hypochondriac, so I know I’ll be taking advantage of this benefit. 

By acquiring this basic information, we are able to narrow down the best products to present to your client. Don’t be the person walking in asking for the best golf club; let these simple steps help you to present the perfect annuity for your client. There’s no such thing as “the best annuity available” or a one-size-fits-all annuity, but there is an ideal annuity for each and every client and their unique financial situation.