How to Sell Annuities to Help Grow Your Business

June 3, 2024 |read icon 7 min read
A financial professional sharing information about annuities to a female client.

With the wide range of financial products available for your clients today, you may be wondering if annuities make sense to include as part of your portfolio. At Ameritas, we’re proud to offer financial professionals a full suite of products to help fit your clients’ needs, including those clients interested in the guarantees* and stability that annuities can offer.

When it comes to deciding if offering annuity products is right for you, it’s helpful to understand what annuities are—and what they aren’t.

Guaranteed income for life

The top benefit of annuities is a powerful selling point: stable and reliable income that lasts a lifetime. Based on the annuitization option your client selects, they can depend on their annuity for income in a way that typically can’t be matched by other products. Because such guarantees are based on the claims paying ability of the issuing company, it’s important to choose your annuity provider carefully. Fortunately, Ameritas has a proven track record of financial strength—and a long history of annuity expertise.

Given today’s volatile market, rising inflation and aging population, don’t be surprised if your clients show a particular interest in guaranteed lifetime income—even if they’re already working hard to prepare for retirement.

According to a 2022 defined contribution retirement income study conducted by independent investment management company Invesco, 68% of participants in defined contribution plans still worry that they will eventually run out of money, and overall, 94% of respondents want a guaranteed lifetime income solution that provides stable, predictable income where—once again—they won’t run out of money.

In addition to guaranteed income, annuities offer a way for your clients to help protect their assets against market downturns, build retirement income potential or even leave a protected legacy to loved ones—all while allowing them the security of knowing they can access these funds in the event of a life change. Depending on the policy and the state of issuance, clients may be able to withdraw a portion of their deposits without a surrender charge or may be able to access their account free of charge to pay healthcare expenses.

A flexible and powerful retirement savings tool

For clients eager to look beyond defined benefit plans and Social Security for retirement income, annuities can address many retirement planning challenges:

  • A buffer against market volatility. In fixed or fixed-indexed annuities, these products offer a guaranteed rate of return, ensuring that your clients’ principal investment remains intact. This can be particularly appealing to risk-averse individuals who want to safeguard their retirement funds.
  • A predictable income stream. While many clients tend to think about their retirement nest egg as a lump sum, an annuity payout can be fixed over time, helping provide financial stability throughout retirement.
  • Tax management. Annuities offer tax-deferred growth, ensuring that clients don’t pay taxes on earnings until they withdraw funds. This can potentially lower their tax liability and allow their investment to grow at a faster rate over time.
  • Legacy planning. Unlike many other retirement funds, some annuities offer death benefits that allow your clients to pass on the remaining funds to beneficiaries after their death.

Diversification and risk management are essential elements of any retirement portfolio, and annuities provide an excellent avenue for your clients to diversify their investments and manage risk effectively. Additionally, annuities often have higher contribution limits compared to other retirement accounts, allowing them to save more for the future.

A newly popular choice for planning

As more individuals are becoming aware of the importance of saving for retirement, the demand for retirement products and services is on the rise—especially annuities. According to LIMRA, as of the first nine months of 2023, annuity sales increased 21% to $270.6 billion. Total sales increased 10% year-over-year to $88.6 billion in the third quarter 2023. LIMRA currently estimates that annuity sales exceeded $350 billion in 2023, which is more than 10% higher than the record set in 2022.

What does that mean for you and your clients? For starters, it makes the conversation about annuities far easier. Annuities have been discussed far more favorably in financial media over the past few years, so it’s likely that many clients who previously may have held negative associations with annuities, no longer have that hesitation.

To discuss annuities effectively with your clients, start by gaining a thorough understanding of their financial situation, including their income, expenses, assets, liabilities, retirement goals, risk tolerance and any existing retirement savings or investments. Then, look to their unique concerns when it comes to retirement planning. If longevity risk, market volatility, inflation protection and/or legacy planning are important to them, an annuity may be a solid fit.

The right choice for your clients?

By offering annuities, you can provide your clients with a valuable retirement planning solution that can help secure their financial future. This not only strengthens your relationship with existing clients but also could attract new clients who are seeking reliable retirement options.

Annuities are not ideal for every investor, of course, and it’s important to explore your clients’ willingness to keep their funds in the account for the full term to avoid potential surrender charges. You should carefully review the terms and conditions, including fees, expenses, caps, investment objectives, surrender charges and other risks to ensure the product aligns with your clients’ financial objectives and risk tolerance. But if you decide to move forward with including annuities in your product set, we’re here to help you succeed.

Whether you have questions about specific annuity products, need assistance with paperwork, or require guidance on how to effectively sell annuities, our dedicated team has your back. With our comprehensive retirement planning solutions, we can help you navigate the key considerations when selling annuities and show you why they should be an essential part of any retirement plan. We offer a wide range of accessible resources, including comprehensive product guides, marketing materials and support.

Ready to learn more? Visit our annuities at Ameritas page to discover how we can help you sell annuities and help your clients achieve their financial goals.

* Guarantees are based on the claims paying ability of the issuing company.

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