Updated October 2, 2023, at 2:54 PM
Clients are looking for guarantees for their pre- and post-retirement assets rather than assuming the potential risks associated with many other financial vehicles.
So, the question becomes, why are we as financial professionals not talking to our clients and prospective clients about all the annuities we have to offer? After all, in the first half of 2023, total annuity sales increased 28% to an astounding $182.7 billion.
We’re often asked in conversation with financial professionals around the country on what are some ways to open up the conversation with these clients and prospects without sounding like a “product pusher” but rather a problem solver?
Here are four simple conversations you can have with clients and prospects that can potentially lead to more and more annuity conversations.
4 Ways to Talk Annuities With Your Clients
Describe What an Annuity Does
“If we could deliver a higher guaranteed income solution & possibly reduce policy fees by a half or third of what you are currently paying, would you be interested in learning more?”
That quote is a good way to succinctly describe an annuity and its benefits, and has historically worked well to get clients interested in annuities.
Wealth Transfer
This is an area not many financial professionals think of an annuity, but stick with me here and I’ll explain. When’s the time most clients stop paying their life insurance premiums? When the policy is old and they are late in life. Not the best time to stop making those payments! How about talking to your clients about a deferred income annuity (DIA) that’ll turn on an income stream late in life and continue making those payments so they’ll still transfer assets to their beneficiaries without the challenge of not being able to afford it.
Tax Advantages
Again, not an area where many financial professionals consider using annuities, but try this on for size. With a qualified longevity annuity contract (QLAC), did you know a client can transfer assets ($125,000 max) from their 401(k)s or IRAs to a QLAC and not have to take required minimum distribution (RMDs) on that amount until age 85? These products are really starting to get a lot of attention in light of the Department Of Labor, so I’m sure you’ll be seeing more and more on QLACs in the near future.
Fixed Income Alternatives
For your moderate to conservative clients and prospects, what attractive options exists that’d deliver the interest potential these clients want to see? Bonds? CDs? Money Market? Fixed indexed annuities (FIAs) are built with the potential for indexed interest accumulation that clients in these risk pools are comfortable in seeing. Educating your clients and prospects on the available options in these risk classes can easily open the door to the annuity conversation.
Final Thoughts
So there you have it, four easy ways to start talking to your clients and prospects about annuities and the features and benefits of each talking point.
Your clients are searching for the solutions you have to offer, even if they don’t know it quite yet. Don’t miss your chance to talk about annuities with them or they’ll for sure go and seek out another financial professional who will!
Guarantees are backed by the financial strength and claims paying ability of the issuing insurance company. FIG does not give tax or legal advice. Your client should consult with and rely on their own tax and legal advisors regarding their particular situation. This is not a comprehensive overview of all the relevant features and benefits of any particular product. Be sure to review all of the material details about any products referenced in this article before making specific recommendations to clients.