The ideal climate for annuity sales
By Ryan Parker
Bankers Annuity Brokerage
With a substantial number of Americans looking for safe places for their nest eggs, as well as products with the potential for growth, the climate for annuity sales has never been better.
Take a good look around you — you won't have to look too hard — and you'll see reflections of a crumbling housing market, the stock market's mighty fall and subsequent volatility, exorbitant unemployment rates, a drop in consumer savings and spending and a general look of uncertainty on the faces of those around you. With a substantial number of Americans looking for safe places for their nest eggs, as well as products with the potential for growth, the climate for annuity sales has never been better. This is a lucrative opportunity for you to show your clients and prospects how a properly structured annuity could be the ideal product to set them on a safe course to retirement and beyond.
People today are looking for stability and annuities are arguably one of the best ways to secure clients' retirement lifestyles. What's more, there's an annuity to suit the varying needs of almost all of your clients. That's because from the most basic fixed annuities to equity indexed annuities to variable annuities, no matter where the product lies on the risk spectrum, every annuity out there shares one powerful element: they all come with certain fundamental guarantees.
When you discuss the annuity solution with prospects and clients, you'll want to emphasize the many benefits of annuity ownership that make them so appropriate. Here are a few of the more important points you'll want to communicate to your annuity prospects:
Safety and Security — Since annuities are issued by insurance carriers, these carriers must comply with federal mandates to hold financial reserves until the time when funds are withdrawn. Of course, not every carrier is as strong as its counterparts, so rating agencies regularly grade the solvency of every company to offer annuities. With your professional promise to stay apprised of these data, your clients can be assured that their money is in a safe place and all those guarantees will remain in place.
Guaranteed income to last a lifetime — Annuities can be crafted to pay out in several ways. Clients can opt to receive their payout as one lump sum or in payments over a specific period of time, but for many people, securing a monthly stream of income with a promise of payment until their death can deliver peace of mind like no other product on the market.
Tax-deferredgrowth — Money or funds held in an annuity grow tax free until the point when your client begins making required minimum withdrawals, cashes in a portion, or sells the annuity for a lump sum of cash. Once the funds start leaving the annuity — no matter how — the money is then treated as ordinary taxable income. Triple compounding — Since annuities are long-term products, in addition to favorable tax treatment, annuity owners take advantage of compounding interest — and it compounds much faster than almost any other kind of product. This is because annuities yield interest in three ways: accruing interest on the principal, earning interest on already earned interest and even realizing interest on any money the policyholder does not withdraw for taxes.
As an agent or advisor, you have the unprecedented opportunity to help a great number of your clients and prospects navigate to a worry-free retirement. While every client’s financial position, goals and desires are unique to him or her, and no matter how many bells and whistles your client use to adorn their annuity, their universal guarantees can form the powerful foundation of a solid retirement. And at a time when clients are craving security, reminding them of these benefits — no matter what type of annuity product you find to be most appropriate for their needs — will only serve to reinforce the value of the product and the peace of mind that goes along with it.
Sources used but not quoted from were Life Health Proannuity.