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3 Must-Ask Questions for Annuity Clients

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With the end of the year behind you, this is the perfect time to refresh your sales approach.

An area well worth your focus in 2018 is fixed annuities.

A quick refresher on why fixed annuities can be a popular option: fixed annuities help protect assets and guarantee a minimum rate of return, all while allowing for flexible payout options. Ultimately, a fixed annuity offers what many clients want — safety and growth potential.

(Related: 5 Questions to Boost Your 2018 Life Insurance Sales)

Depending on your experience with fixed annuities, these reminders and sales insights can refresh your selling strategies, helping to meet your clients’ financial objectives in the new year.

The Newcomer

As a reminder, the critical first step for selling annuities is understanding a client’s priorities. To better understand what your client is looking to accomplish with his or her retirement savings, ask these three questions:

  1. Are you trying to create a steady, reliable income stream in retirement?
  2. Do you want your income to be guaranteed to continue for the rest of your life?
  3. Do you want to know right now what income you will be able to rely upon, without guesswork?

These questions can help uncover a client’s post-retirement goals. In my experience, they often answer yes to all three, which helps transition the conversation to how an annuity could be a good fit.

After assessing your client’s priorities and making sure the annuity is the right investment vehicle, do your homework on product add-ons, such as income riders.

Many brokers will recommend the addition of an income rider to help ensure a client has easier access to funds. Without extensive experience in this area, you’ll have to do some research to be sure you understand the complexities of income riders and determine what best fits your client’s needs.

If You’re an Occasional Seller

If you have experience selling annuities, you probably already know the thought of having a secure, stable and guaranteed investment return for the rest of your life is a huge draw for a client. Any annuity — whether it’s fixed, indexed or variable — is built to provide a client with earning potential similar to that of a bond mutual fund, but with greater safety.

Clients (Image: Thinkstock)

(Image: Thinkstock)

However, safety means that the financial integrity of the insurance carrier providing the safety needs to be protected, so an annuity purchase often requires a time commitment that restricts access to funds (hence the use of income riders).

Use your experience in talking with clients about annuities to help them understand the complexities of the requirements that come with annuities.

Provide real-life examples, when possible, to demonstrate how annuities are a more reliable alternative to bond mutual funds. By using your experience to communicate the options simply, you can help clients make better decisions they feel confident about.

If You’re a Seasoned Professional

You’ve been through the annuity conversation many times and you’ve potentially seen the glaze that comes over a client’s eyes when the details around annuities are communicated ineffectively.

Embrace that experience and take the time to think through popular questions from clients in the past or moments where you noticed clients getting confused. Then, build upon it. Use that information to adjust your communication techniques. This simple process takes a little time, but helps in making your clients feel more comfortable from the start.

Clients also may feel more comfortable when you demonstrate your expertise. Not many others can say they know this process inside and out, so use that to your advantage when speaking to prospective clients.

The popularity of annuities, combined with their complexities, equals a huge opportunity in the marketplace for seasoned professionals who have the know-how to recognize when annuities best complement a client’s investment approach.

No matter how long you’ve been in the industry, the key is to determine your client’s true financial goals and tailor the best options to meet those needs. With the above tips, you can go into the new year refreshed and ready to offer annuities to meet your clients’ needs.

—Read Embrace Your Inner Hero on ThinkAdvisor.

Rich Lane is the director of individual annuity sales and marketing for Standard Insurance Company. He has been in the fixed annuities industry for 20 years, with an emphasis on product and distribution development for brokerages, banks and broker/dealers.


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