Suitability essential in low-interest rate environment

By David Shields

WealthMark Advisors, Inc


Last month’s release of the Financial Stability Oversight Council’s annual report reminds us of the importance of ensuring annuity sales are suitable in a low interest rate environment.

“The low interest rate environment has proved challenging for life insurers to generate sufficient investment returns to meet high guaranteed benefits promised in prior years,” the FSOC report stated.

The perception of suitability changes when interest rates lower. In addition to examining suitability as a whole, surrender charges and the source of income for the product must be carefully considered. The suitability form is a great tool when assessing and meeting the needs of the client. Suitable sales are a win for you, the client and the carrier.

How are you ensuring annuity sales in this environment?