You’ve drawn in new business with your successful prospecting efforts. You have scheduled several new-client meetings and developed a list of compelling, thought-provoking questions to elicit responses that can help you better understand each person and their needs. Your new client is now sitting across from you at your office table, and you have started the annuities conversation.

What should you highlight to strengthen the case for buying into a fixed indexed annuity (FIA)?

Retirees and pre-retirees tend to have the same qualms about investing in annuities. In general, advisors need to educate clients about the benefits of annuity ownership while countering negative perceptions about the product. 

In a Huffington Post blog, personal finance expert and wealth manager Carlos Dias Jr. suggests several reasons why retirees should consider indexed annuities, despite their bad reputation. “A lot of arguments exist against their favor,” Dias says. “Most struggle with annuities and how they promise future gain for present sacrifice.”

It’s important to emphasize that an annuity is an excellent long-term financial investment with a number of unique benefits that sets it apart from other retirement finance vehicles. Understanding the six most common client concerns and conveying a FIA’s specific features and benefits in your new-client conversations can pave the way to sales success.

1. Retirees and pre-retirees don’t want to outlive their assets. FIAs can provide guaranteed lifetime income, so individuals won’t run the risk of running out of money.

2. Individuals may ask about the performance of annuities, questioning the value of this type of investment over stocks and bonds. Since FIAs are tied to a market index like the S&P 500, they provide a guaranteed minimum rate of return, with the potential for increased earnings in strong markets.

3. Clients want to maximize growth. FIAs provide valuable tax benefits to clients. Interest accrued during the accumulation phase of an FIA contract is tax-deferred, so contract owners won’t pay taxes on interest earned until they start making withdrawals. This benefit allows money to grow faster because clients are receiving interest on money they ordinarily would have paid in income taxes.

4. Many retirees and pre-retirees are nervous that their investments will lose value. Unlike stock market participation, FIAs enable clients to protect the value of their initial investment, provided they abide by the contract terms, which may include surrender charge periods. In general, FIAs provide insulation from bad markets, so there is absolutely no exposure to loss, even in severe market downturns.

5. Retirees want to leave a legacy and protect family members. There’s a misconception that annuity contract owners won’t be able to pass along the benefits to beneficiaries. Many FIAs offer death benefits for contract holders, so a spouse or other beneficiary can continue to receive income from the annuity.

6. Some retirees fear losing control of their money if they turn it over to an insurance company. While FIAs are designed to be a long-term contract, some come with a return of premium or increased liquidity provision, so contract owners can get back their initial investment at any time, for any reason.