When Doing Nothing Costs More Than You Think

​One of the biggest risks facing retirees today isn't necessarily market volatility, inflation, or even taxes. In many cases, it's simply doing nothing. Every week, we speak with agents who uncover annuity contracts that haven't been reviewed in years. The client purchased the product for a specific reason at a specific point in time, but life changes, products evolve, and markets shift.

Many clients assume that because their money is protected, there is no reason to revisit an existing annuity. While safety is certainly important, protection alone does not necessarily mean the contract remains the best fit for their current objectives. We've seen situations where clients are paying for income riders they never intend to use, sitting in products with outdated crediting strategies, or holding contracts that no longer align with their retirement goals.

I recently worked on a case involving a client who was in the seventh year of a ten-year fixed indexed annuity. The contract still had a 7% surrender charge, and the client was already taking income from the income rider. Many agents would immediately assume that a transfer would not make sense under those circumstances. However, after reviewing the available options, we found a carrier willing to accept the transfer with no premium bonus at all because the income being offered was substantially higher than what the client was currently receiving.

That case is a good reminder that assumptions can sometimes prevent us from uncovering opportunities for our clients. We see similar situations on the accumulation side as well, where newer product designs, enhanced crediting strategies, or premium bonuses can create outcomes that were simply not available when the original contract was written. The point isn't that every contract should be replaced. The point is that every contract deserves to be reviewed.

The annuity industry has changed dramatically over the last several years. Carriers have introduced stronger accumulation opportunities, enhanced income solutions, and in some cases substantial premium bonuses designed to help offset surrender charges. As a result, products that were considered competitive five or ten years ago may no longer offer the same value when compared to today's marketplace.

That doesn't mean every existing contract should be replaced. In fact, many shouldn't. However, every client deserves the opportunity to understand what they own, why they own it, and whether it still serves the purpose for which it was originally purchased. A simple policy review can often reveal opportunities that neither the client nor the agent realized existed.

The most successful agents I know aren't constantly chasing the next prospect. They're consistently reviewing existing business, asking thoughtful questions, and helping clients make informed decisions. Sometimes the review confirms the client is exactly where they need to be. Other times it uncovers opportunities to improve income, increase growth potential, reduce fees, or better align the contract with the client's current needs.
​
The hidden cost of inaction is that time continues to pass whether we review these contracts or not. Clients deserve proactive guidance, and as advisors, one of the most valuable services we can provide is helping them evaluate whether yesterday's solution is still the right solution for today.

---

​​Until Next Time – Good Selling! 

​Joseph R. Ohlson, LUTCF
President
1-877-844-0900
[email protected]