 Most of us came in this business hearing the famous selling tip- KISS….keep it simple stupid. This acronym has never been as important as it is in today’s fixed annuity arena. Remember, when we speak of fixed annuities, we are addressing the traditional fixed and the “fixed” index annuities. Let’s focus for a minute on the index annuity market. This is a “goofy” market. Have you even seen anything like this in your insurance career? We have products that take most agents 30 minutes to understand. How are we supposed to explain them to a prospect or client in three (3) minutes? Please allow me to quote Jack Marrion, President of the Advantage Compendium, “Fixed index annuities can best be described as savings instruments offered by insurance companies that provide a minimum guaranteed return. Insurance companies’ earnings, above and beyond what is needed for this minimum guarantee, are used to purchase an index-link providing the potential for the crediting of excess interest above the minimum guarantee.” Sounds pretty simple, doesn’t it? This is even better when you explain to the prospect that their principal and past interest gains are never subject to investment risk. They are backed by the faith and credit of the insurance company. This is safe and this is simple. Some might want a simple explanation of the difference between a “fixed rate” annuity and a “fixed index” annuity. Marrion says, “The difference between the two is that with a fixed index annuity, most of the interest paid is used to buy an index-link on an equity index. This gives your client the potential for more interest if the index cooperates.” This sounds pretty simple to me. You do, of course, have the benefit of many fine point of sales pieces along with historical performances of each crediting methodology. So what’s happened? Why all the confusion? Okay, many companies have made these products difficult to understand ... too many index choices and too many games. Some products have stretched the surrender periods without giving anything back to the client. Don’t get me wrong, long surrender periods are okay if the client gets something in exchange and fully understands what he/she is buying. Some products will never, in my opinion, perform well. Why? They are building in unmanageable commission structures. I like high commissions as well as anyone, but not at the expense of our clients.
Before we analyze potential changes, let’s look at the traditional “fixed annuity.” The traditional, non-index annuity, has been around for quite some time. It has really served a great purpose. People have been able to save money through this vehicle on a tax deferred basis. The last ten (10) years provided our industry with an excellent opportunity for explosive growth. Boy did it ever happen! Bank annuity sales took off; agents were experiencing tremendous increase in incomes and companies’ assets exploded. The annuity design was simple. They mimicked CDs. That’s the greatest benchmark for today’s consumer – “is this annuity paying more than my CD?” This is very important because that is the most important factor in your client’s decision to purchase. Tax deferred growth, freedom from probate and an income they can’t outlive is a distant second to “beating” the CD. But things started to get a little cloudy. Let’s take a look. Companies wanted an increase in market share. They wanted more assets under management. Remember, that’s one of the two (2) biggest factors in which an insurance company makes money. It’s called the spread. It’s the difference between what the company earns in investment income and what they pay your client. The bigger the spread…..the bigger the profit. The other main factor is expense (home office costs and of course, your commissions). So, enter the day of the first year bonus. This “sizzling” first year rate brought in a lot of money. These bonuses have brought about some critics from the press, as well as, disgruntled clients. Why? Renewal rates, in many cases, tanked. These were declared rate annuities that allow the company to “declare” where they set the renewal rates. Many companies in search of income reduced your client’s rate to increase the spread. Wall Street liked it….but not the policyholder. I believe that it’s in your best interest, as well as your clients, to purchase a multi-year rate guaranteed annuity if you are not proposing an index annuity. Otherwise, your client is saving in a vehicle with no guarantee of future results. They surely wouldn’t do this with a bank CD. Don’t get me wrong, there are plenty of honorable companies that will treat your client fairly. Also, we do want the company to be profitable. They are our partners. There are many ways to analyze a company to determine how they will renew your client’s rates:
I have been fortunate to be on both sides of the fence. I’ve been an insurance company president as well as having twenty (20) plus years in the field as an agent, general agent and owner of an insurance marketing organization. So, please excuse me if I tend to over-analyze. But, I am happy to say that the next couple of years will get our annuity industry back on track. Companies are now designing new products, pulling old products and adhering to new regulatory guidelines. The business is going to be better than ever! The policyholder, the insurance company and the agent will all do well! We are getting back to a level playing field. I, for one, am extremely happy with the direction our industry MUST take if we are going to be able to operate profitably without government intervention. So, what do we do next? Here we go: Sell only what you believe in. Don’t rationalize away parts of the contract you don’t like. Only sell “GOOD STUFF”. Have a concise presentation that provides your prospect or client with all the information they need to make a decision. They buy easier when they understand what you are selling. Don’t over promise. Don’t sell the stock market. This isn’t an investment. The fixed index annuity is the most important annuity in the industry. Seniors and Boomers will continue to buy. Our future is bright for multiple sales of annuities and ancillary products - but, only if they are happy with previous purchases. This product is simple and beautiful. Sell it properly and you will profit immensely. The answer is simple. Sell it right and sell what’s good. Good for everyone. We can’t lose.
 While obtaining leads is most advisor’s number one priority, the 2nd most important step is closing the sale. In order to do this, you must put yourself in your client’s shoes and ask the appropriate questions. Along with that, you should provide them with professional services to build relationships, trust, and position yourself as their trusted financial consultant. Let's discuss 5 sales tips for annuity selling insurance agents to help you boost sales and continue achieving your goals: 1. Understand Your Target Market: The first step in selling annuities is to have a deep understanding of your target market. Who are your ideal clients and what are their needs and concerns? What are their financial goals? Understanding your target market will enable you to tailor your sales approach and messaging to resonate with them. This will help you identify the right prospects and focus your efforts on those who are most likely to be interested in purchasing annuities. 2. Build Trust and Establish Relationships: Selling annuities is not just about making a one-time sale, but also about building long-term relationships with your clients. Trust is crucial in the insurance industry, and it takes time to establish. Be honest, transparent, and professional in your interactions with clients. Take the time to understand their financial situation, goals, and concerns. Educate them about annuities and how they can benefit from them. Listen attentively to their needs and provide personalized solutions. Building trust and establishing relationships will help you earn repeat business and referrals, which are essential for long-term success in annuity sales. 3. Be a Trusted Advisor: As an insurance agent, it's important to position yourself as a trusted advisor rather than just a salesperson. Your clients are looking for someone who can provide expert advice and guidance on their financial matters. Educate yourself about annuities, including the different types, features, benefits, and risks. Stay updated with the latest industry trends and regulations. Be prepared to answer questions, address concerns, and provide accurate information to help your clients make informed decisions. By positioning yourself as a trusted advisor, you will build credibility and confidence with your clients, leading to increased sales. 4. Customize Your Sales Approach: Not all annuity prospects are the same, and a one-size-fits-all sales approach may not be effective. Customize your sales approach based on each client's unique needs, goals, and preferences. Tailor your messaging to resonate with their specific situation. Use language that they can understand, avoiding technical jargon. Use visual aids, such as charts or illustrations, to simplify complex concepts. Be flexible and adaptive in your sales approach, and be prepared to adjust your strategy based on the feedback and responses from your clients. A customized approach will show your clients that you genuinely care about their individual needs, which can significantly impact your sales success. 5. Provide Excellent Customer Service: Excellent customer service is essential in any sales role, and annuity sales are no exception. Be responsive to your clients' inquiries, whether it's through phone calls, emails, or in-person meetings. Be prompt and reliable in providing information or assistance. Be patient and empathetic, especially when dealing with clients who may have concerns or questions about annuities. Demonstrate professionalism and integrity in all your interactions with clients, even after the sale is made. By providing excellent customer service, you will not only retain your existing clients but also receive positive reviews and referrals, which can contribute to your sales growth. Now that these tips are fresh in your head, it's time to reach out to your leads. Dig into your CRM or prospect pool and see how you can help them. Perhaps it's through providing some quotes or wealth transfer strategies, sending educational consumer materials, or maybe re-introducing yourself and remind them you're here for them. Just because a lead hasn't converted yet, doesn't mean they won't. Is Your Annuity Supply Low?We can help with that! Let us give you contact information for leads who are actively searching for annuity information. And the best part? Our in-house generated annuity leads cost around 1/3 of the price of other annuity lead vendors! Implement your sales knowledge today!
 This was the first lesson drilled into me during the initial week of sales training at one of the most established and entrusted insurers in our industry. I’ve learned it’s much better to ask open ended questions, listen, ask permission to take notes, then repeat what you heard back to the client. This demonstrates that beyond listening, you seek to understand where they are coming from. This is step one in establishing yourself as someone worthy of trust. If you are smooth enough, use their name while doing so, and you’ll earn a few extra brownie points. After all, everyone’s favorite subject is themselves, their family, or their business.
Some advisors “wing it” or meet with a client with sales illustration in hand ready to go. However, I propose a different approach. By asking your prospects these 5 key questions during your initial meeting, you’ll find prospects reveal more about themselves when asked a thought-provoking question. This strategy change can move you from being perceived as “selling a product” towards being viewed as a problem solver, and who wouldn’t want that? Prospects often say things like, “Those are good questions, you’ve really got me thinking...” or “Wow, no one’s asked me this before!” Ask these questions, schedule your next appointment while you’re there, send a follow up letter, then share what you’ve learned with us. We can help you put together the product solutions and illustrations that work best. Create a great referral plan and your business will sustain itself for years to come. |
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