Annuity sales have hit a rough spot in 2020 as consumers adjust to the economic impacts of the pandemic, including the harsh reality that interest rates are going to be historically low for at least the near term.
These impacts have given consumers a very loud financial wakeup call about the need to protect their incomes and cash flow.
During the pandemic, consumers have gotten first-hand exposure to the reality that their governments cannot be the insurer or funding source of last resort for their key financial needs, including health care, food security and unemployment compensation. Government resources at all levels are stretched more so than at any time since World War II. At the same time, the political process in our country moves to the beat of its own drummer and has clearly shown that consumers need to be able to provide for themselves in difficult times. Financial self-reliance is more important than ever.
The Protection Realization
Seeing this, consumers are beginning to realize that unplanned financial bumps in the road actually happen and that they need their own sources of cash to help them absorb the shocks when they occur.
We have seen more people apply for life insurance protection, pay down their debts, increase savings and look to replenish their emergency funds. They have learned a generational lesson about financial protection. As a result, many households are also resetting their financial values and goals. This makes it a great time to talk to people about the lifelong benefits of annuities. Annuities are a product most people do not understand or have unfounded views about.