In order to sell annuities, it is important that you understand what they are and how they work. Annuities are a type of investment that provide a guaranteed income stream for the holder. There are many different types of annuities available on the market. Sometimes, life requires access to a large sum of money and monthly stream of payments may not be enough, you may ask yourself:
I want to sell my annuity. Is it possible?
Yes, but it so it is important to do your research before selling them. In this article, we will discuss the basics of annuities and how to sell them to your clients!
What is an annuity?
An annuity is a contract between you and the issuer of the annuity. You make regular payments, known as premiums or contributions, into the contract over a period of time. Once this term ends, you will receive guaranteed periodic payments for a defined period. There are also immediate payment options available with annuities and they can be used as a source of funding for long-term care.
What are the different types of annuities?
Fixed Annuity – A fixed annuity is an investment that provides you with guaranteed interest rates, known as a crediting rate. In some cases, you may also have the option to choose from a range of crediting rates. This type of annuity is beneficial if you are looking for the maximum guaranteed return on your investment, but it often comes with higher fees and lower liquidity than other alternatives.
Variable Annuity – A variable annuity is an investment pool that provides you with flexible options to invest in sub-accounts, typically mutual funds. Contributions are used to buy units within the sub-accounts and interest is earned based on the performance of those sub-accounts. Variable annuities may have fixed or variable life insurance providing death benefits, which can be helpful if you want flexibility with your investment choices without the risk (or potential reward) associated with investing in the markets.
Fixed Indexed Annuity – A fixed indexed annuity is a unique type of annuity that combines features from both fixed and variable annuities. It has a guaranteed interest rate, like with a fixed annuity, but also provides you with the potential to earn additional interest through index participation combined with protection from loss of principal due to market volatility.
How are annuities sold?
Once you have learned about the various types of annuities, it is important that you know how to sell them! Having a strong sales process will enable you to be more successful when selling annuities. The first step in understanding how to sell an annuity is to provide education and advice on what type of annuity would be best for your client. Once you understand their needs and goals, it is much easier to identify the right type of annuity that will meet those needs and help them reach their financial goals.
The next step in the sales process is to provide information about what it takes to qualify for an annuity. Many people believe that just about anyone can open an annuity, but there are certain eligibility requirements that must be met before you can purchase one. Once you have made sure your client meets these requirements, it is important to gather all of the pertinent information that you will need to open the annuity, such as Social Security numbers and identification. Then it is time to compare different issuers of annuities so that your client can find the best one for their needs.
In many cases, clients have concerns about how much they will be required to pay in premiums each year. Once you have gathered information on how much they will need to contribute, it is important that you explain the pros and cons of annuities. It is also helpful to compare them to other investment options so that your client can see which ones are most similar. Depending on their unique needs, sometimes annuities will be their best option, while other times they will make more sense as a secondary option to be used in conjunction with another investment. In some cases, your client may decide that annuities are not the right choice.
In the end, it is up to you and how you can help your clients reach their financial goals by providing them with all of the necessary information about annuities. As annuity providers are regulated by the state, it is important to understand your state’s laws before offering advice or selling an annuity to a client.