Ready to start selling fixed annuities? Here's what it takes to get started

By Ryan Parker

Bankers Annuity Brokerage


Whether you’ve spent decades or just a few months selling life insurance, if you’ve somehow failed to notice the perfect storm that’s been gathering for the sale of fixed annuities, it’s time to grab your umbrella and open your practice to the tremendous deluge of potential these products afford.

After all, when you consider the recent market meltdown, the rapid pace at which baby boomers are retiring and a desire for lifelong income to replace the more or less defunct pension plans of old, adding fixed annuities to your practice not only makes you more helpful to your clients (which leads to overall growth), but it also boosts your bottom line.

The very basics

As you know, as long as your state life insurance license is valid and current, you already have the fundamental requirement to begin selling fixed annuities. What’s more, many of the carriers with whom you’re already contracted offer a number of great fixed annuity products, and depending on your independent or captive status, either your carrier or IMO should provide extensive support in your annuity sale endeavors.

It goes without saying that you should dedicate yourself to brushing up on your annuity knowledge and expertise, so read everything you can about the annuities specifically available to you until you can explain them inside and out. Picking up a few of the many trade publications to bone up on the latest policies, trends and marketing and sales strategies is also a great way to prepare yourself and your practice for annuity sales.

Comply with the new NAIC model rules

In an attempt to curb unnecessary or inappropriate annuity sales, the National Association of Life Insurance Commissioners (NAIC) now requires annuity producers to complete a four-hour general annuity training course before selling any type of annuity. To facilitate this process, the National Association of Fixed Annuities (NAFA) website, www.NAFA.com, has developed a “NAFA Continuing Education” Web page, where you can research your state’s four-hour continuing education course in order to meet the CE Annuity Suitability Model Training requirements.
Furthermore, the carriers for which you write business will expect you to complete training on their specific annuity products, so keep an eye out for any communications from your carriers regarding these trainings. In most states, along with its participating member carriers, NAFA has developed a one-stop training room for precisely this need, so if you do receive a notice from one of your carriers, it will tell you how to access their specific training.

Maintain suitability requirements

The NAIC’s Suitability in Annuity Transactions Model Regulation also includes a secondary review process of suitability for all annuity transactions. For this review, you will be expected to collect and document each client’s financial status, retirement objectives, risk tolerance and liquidity needs. You will also need to demonstrate that you’ve identified and considered the benefits and values the annuity buyer will have available, as well as the risks or potential costs the buyer must assume. Maintain diligent files on all of your clients so you can easily find or refer to these data.

While some of the rules associated with selling annuities have been tightened, they should in no way interfere with your ability to sell suitable annuity products to your clients. So there’s no reason to delay any further. Contact your carrier or IMO and inform them that you’d like to begin offering fixed annuities, listen to their advice and follow the rules and you’ll fast be on the path to fixed annuity success.

To read the Suitability in Annuity Transactions Model Regulation, click here.