Many people do not know what annuities are. Many who may think they know what annuities are have knowledge based upon something they heard sometime ago from a friend, or from an article they read, or from something they saw on TV. With outliving retirement income being among client’s biggest fears, it is a great time to talk to them about the benefits of annuities.
Annuities are simply long-term savings vehicles for retirement than can be converted to guaranteed income if desired. Annuities are a type of insurance policy that guards against the risk of living too long. They are the only financial product that can guarantee a client a paycheck for the rest of their life no matter how long they live. However, income is not a requirement of an annuity; gone are the days of required annuitization. Clients have the choice of if and when to take income, and today’s living benefit riders give clients another option for guaranteed income.
It is important to match the different types of annuities to your client’s goals and risk profile. Variable annuities tend to be for more aggressive clients, indexed annuities for moderate clients, and multi-year guarantee or traditional fixed annuities are for the more conservative clients. Indexed annuities are not investments that compete with variable products, and they are not designed to have market-like returns. They are fixed annuities with the potential to earn more than what is available in the current fixed rate contract.
Annuities vary in length from 1-17 years. They also vary in the rates they offer and how they credit interest. There are almost 100 carriers selling fixed annuities, and over 50 selling indexed annuities. The different income riders, death benefit riders, and proprietary indices available today can make it difficult for you to find the best option for your client. Just because a carrier sells a lot of annuities does not mean they are the best option for everyone. Let the experts at Wholehan Marketing help you find the best solution for your next client while you spend your time focusing on your clients and building your business!