The Great MYGA Conundrum of 2023

As we sail into the second-half of 2023, the sentiment I hear from agents is the same. They are selling more annuities than ever before – but also more MYGAs and traditional fixed annuities than ever before. Who can blame the consumer for balking at an FIA with a 10% S&P 500 cap, when they can get a five-year MYGA that guarantees upwards of 5.40%?

This is quite the conundrum for the agent whose experience tells her/him that the fixed-index annuity (FIA) will likely net a higher return for the client in the long-term. The FIA will also provide significantly more commission to the agent, as well as living benefits that the MYGA cannot provide.

Let’s explore some ways to spice up your FIA efforts and show the client that the FIA is built for more than just accumulation. We have guaranteed income for life, income increases for chronically-ill clients and more. This is where we show the prospect how the “tail can wag the dog” on the FIA.

Death Benefit Riders:
We have top rated carriers that feature FIA products with a guaranteed 10% roll-up to for death benefit purposes – whereby the beneficiary receives the higher of the annuity account value or the death benefit account – whichever is higher. Additionally, the indexing strategies are competitive as well, due to the high interest-rate environment.

HUGE Income Bonuses:
There are now several carriers with income-base bonuses of up to 40%! That 40% (for income purposes) is a great way to grab your client’s attention. This product also comes with an “income doubler” if a client becomes chronically-ill. Crediting rates are solid as well. At the end of the day, nearly every survey shows that the top concern pre-retirees have is running out of money. The guaranteed income feature of FIA products will help you pivot from the MYGA sale to the FIA.

Great Fixed Accounts on FIA Products:
Several carriers are making it easier on the agent by giving the agent the opportunity to provide clients with the best of both worlds … a high first-year fixed account rate and great index strategies. One carrier in particular offers a 6.75% first-year fixed-rate. The current one-year S&P 500 cap rate is over 11% - and this carrier guarantees that next year the S&P 500 cap rate will remain over 11%.

What a nice story to tell the prospect … “I understand you want to take advantage of these high fixed rates. How about we put you in the fixed bucket year one and guarantee you 6.75%. Next year, we will know that the cap rate on the S&P 500 will be the same and we can test the index waters then. Remember Mr./Ms. Prospect – with me, you cannot lose money either way!”

Putting it all together, the time is now to pivot to the FIA. Getting into the FIA now gives your client a great opportunity (maybe the best we will see in decades) to get in while rates are high and hopefully benefit from equally high renewal rates – even if rates dip in the future.

Give one of our annuity marketers a call to discuss even more ways we can assist you in putting more FIA sales on the board, getting your clients into a better situation in the long run – and putting more money in your pocket at the same time!

Schedule A Call

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Until next time… good selling!

Joseph R. Ohlson, LUTCF
​Vice President 
​The Ohlson Group
1-877-844-0900