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Contact Donnie Clossman at 713-507-1019

Finding the Best Annuity for Your Client

Annuities are popular tax-deferred investment vehicles used to grow portfolio funds over time for consistent income and wealth accumulation. Some of the most popular products include multi-year guarantee annuities, bonus annuities, indexed annuities, and single premium immediate annuities.

When should you bring up annuities to your clients?

Annuities are an ideal fit for clients nearing retirement. Outside of a previously purchased life insurance policy, annuities are investment vehicles that are especially useful for those worried about running out of money post-retirement. Introducing the idea of an annuity is often as simple as asking your existing clients and new prospects what they are doing with their “safe money” – and how they envision their retirement lifestyle. If you’re wondering whether or not you can recommend annuities to a client that has not purchased life insurance, the answer is YES! Annuities are a great fit for anyone close to and planning for their retirement.

What makes annuities an effective retirement option?

As an advisor, you have the opportunity to help clients overcome their number one fear, which for most people, is running out of retirement income while they’re still living. Annuities serve as retirement or life-long income with guaranteed interest rates and index-based returns. Providing your client with better-guaranteed returns on their safe money than they would receive from the bank will give them income they won’t outlive. 

Consider these questions when addressing the connotations associated with annuities:

  • What are your clients doing with the “safe money” that they don’t want to be exposed to the market?
  • What can you do to help clients overcome their number one fear?

It is also important to note that the two biggest months for CD renewal are October and April, so consider talking to your clients around those times about their annuity options. 

Is it possible to combine different types of annuities?

Yes, your client can combine multiple annuities, and it is more beneficial to diversify both the products and carriers when combining. For example, you can have two deferred annuities where one serves as an interest rate, while another can provide an income stream. This also helps to reduce the risk of your client losing money in the event that a carrier goes out of business.

What should financial investors and insurance professionals pay attention to when looking into annuities?

Suitability is the primary thing you should be looking for when searching for annuities for your client. 

The ideal client is at or near retirement, so be sure that your client falls into that demographic. For example, if a client has 100k sitting in a checking account or a CD, they would likely get a higher return rate via annuities. 

It is also important to consider your client’s assets in conjunction with the annuity and surrender charges. All annuities are going to have surrender charges, so be sure your client has other liquid assets. For example, if a client has only $60k in liquid cash, it is not suitable to lock $40k of that into a 10-year annuity with surrender charges. 

Annuities can be a source of life-long income and guaranteed rates and returns, so finding a product suitable for your client is vital.

What not do to when looking into annuities for your client

The answer to this is simple: do not offer annuities to clients you know will not buy. Since annuities are structured toward those near retirement, it is best not to target younger clientele. For example, annuities would not be beneficial to someone who is 40 years old because taking money out before age 59.5 comes with a financial penalty.

Why should I use a broker for annuities?

With so many carriers and products on the market, an annuity brokerage can help you narrow down the best options for your client. It does not cost the client to use a broker. Our goal here at EMG Insurance Brokerage is to help advisors through the vast market and determine their client’s suitable annuity.

How do I find the best annuity brokerage for my client?

If you are looking for an annuity broker, you can start by asking around and getting referrals. Don’t be afraid to pick up the phone and reach out to two or three of your options and begin to inquire about the details.

There are also several resources available online to aid you in your search. You can also connect with NAILBA, a leading insurance industry organization promoting consumer choice. State websites, such as the Texas Department of Insurance, are also a valuable resource.

What should I look for when speaking to annuity brokers?

  • Responsiveness and attentiveness to your specific questions
         – Are they knowledgeable of the products & solutions to fit you or your client’s needs?
    – Did they respond to you in a timely fashion?
  • Someone with back-office support. What happens after an application is submitted?
  • You want a brokerage with a good team, not just a good salesperson.
  • Test them out by applying and see how their process works. If you are unhappy with the initial responses, you are not required to continue the process and can look elsewhere.
  • Be sure to ask pertinent questions:     – How long have you sold annuities?
         – Have you had any annuity complaints with the state?
         – Which carriers do you most often work with?

You can tell a lot by the carriers they use, the carrier rating, and what types of products they are selling. Do they simply gravitate towards products with the most commission?

How can annuity brokers help?

At EMG Insurance Brokerage, we offer the top annuity companies in the industry as well as personal recommendations and case design to enable you to best take care of your client’s unique needs. Our service offers a more personalized service compared to larger companies, and our agents are happy to walk you through the process.

What are the different types of annuities available through EMG?

We primarily focus on Fixed Annuities, which will guarantee your principal, and you will not lose money. The following products fall under the fixed annuities umbrella that are offered here at EMG.

Qualified annuities – funded by pre-tax dollars

  • Deferred annuities
    • Multi-year guarantees
    • Indexed
    • Regular fixed annuities
  • Immediate annuities

Non-qualified annuities – funded by after-tax dollars

  • Deferred annuities
    • Multi/guarantees
    • Indexed
    • Regular fixed annuities
  • Immediate annuities

We have agents all over the country that we can meet virtually or in person, by appointment, to provide you with dedicated service. Connect with us by phone, online, or in-person, or schedule a consultation with your sales director today on how to grow your business.

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