How to Decide Which Index Annuity Product Makes The Most Sense For Your Client

With all the index annuity products in the marketplace today, it can be challenging to sort through them to find the right solution for your client. So, it's important to know your client's individual needs along with the various features of the products you work with.

Here are three steps to decide what product is a good fit for your client:

1. Learn your clients' needs

Typically when working with an agent, the need for an annuity revolves around safe accumulation, guaranteed income for life, or death benefits. An index annuity with a combination of growth and income is desired, but can be challenging to find. In order to figure out what product will make the most sense for your client, you should understand your clients' needs and values fully.

2. Know what's in the marketplace

The main focus of many insurance carriers is to provide products that can produce high levels of guaranteed income for life. In turn, there is little opportunity for an individual's nest egg to grow. Many of these annuities may actually decline in value gradually over the following 15 to 20 years, once clients take their income and leave nothing in their annuity account value.

Many agents look for index annuities that can provide a reasonable level of income but can also maintain an account value well into the client’s nineties. Because of strategies within the index annuities that are uncapped, higher projected earnings can allow the client to maintain the principal and still receive guaranteed lifetime income.

3. Strategize

It’s important to look at both income and annuity account values in the future. It may be in the client’s best interest to accept a slightly lower income to get a significantly higher annuity account value in later years. It could mean a higher death benefit for the surviving spouse or children, or the client may need to use those funds for long-term care in their later years.

Annuities are complex instruments for retirement strategizing. A financial professional should have a range of suitable products choose from based on their clients’ unique retirement needs.

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Phil Ferrara - National Sales Consultant

Phil has been an Annuity Sales Consultant for 11 years at DMI Marketing and knows that properly presenting products to clients and prospects is important in order to make the sale. Having sold and owned these same products gives Phil a perspective on what it takes to be successful. Phil often jests that he is now old enough to appreciate what these products can do for people.

* This content is for licensed financial professional use only. This website is not intended for use by the general public. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing company

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