A strong annuity comparison looks beyond a single rate or headline. A rate may be one of the first things that catches your attention when reviewing fixed annuities or fixed indexed annuities, but it doesn’t tell you everything you need to know about a contract. Your client’s goals, how long they plan to leave the money in place, and how much access to it they may need can all affect which features deserve a closer look. For annuity producers, a useful product comparison starts with your client, then works back to the details of the available contracts.
Start with What Your Client Needs the Annuity to Do
Before you compare contract features, clarify the role the annuity will play in your client’s retirement strategy. Your client may want to protect the money they’ve already accumulated, create income for retirement, or allow for potential growth. Their timeline matters, and so does how much access to their money they expect to need along the way. Those details will give you a better starting point for comparing contracts. This can also help you narrow the field and spend more time looking at the features that actually matter for the client in front of you.
Compare More Than the Headline Rate
With a fixed annuity, interest is based on the guarantees and terms established by the issuing insurance company. Fixed indexed annuities have interest credit potential tied in part to an external market index, although the client’s money is not directly invested in that index. For fixed indexed annuities, participation rates, caps, spreads, and other terms help determine how much of the index’s performance is reflected in the interest credited to the contract. Instead of deciding which type of annuity is better overall, look at how a particular contract’s guarantees and crediting approach will align with your client’s goals.
Look at Access to the Money
Surrender periods and withdrawal provisions can vary by contract and affect how your client can access their money. A withdrawal during the surrender period may incur a charge, although the contract may allow some withdrawals without one. If access to the money is important to your client, review those provisions carefully. Income options and other features may also matter depending on their goals. That’s why it’s always important to look at the details of the specific annuity rather than assuming two contracts in the same category will work the same way.
Keep Up with Carrier and Product Changes
Annuity products and contract features can change, which can make current carrier and contract information even more important when you’re comparing options. Before presenting your client with a recommendation, review the latest carrier information and contract details that could affect the case. Updates may also create new annuity opportunities worth considering for your client’s needs. And as you compare those options, keep current suitability requirements and the client’s circumstances in mind. A new or updated option may be worth a closer look, but it still needs to be a good fit for your client.
Take the Full Picture into Account
A thoughtful comparison looks beyond an attractive number to the contract details and client priorities that matter most. A full-picture review helps agents make more thoughtful annuity recommendations. When you want another perspective on a case, Phase One offers knowledgeable case support and direct access to Brian, who can help you work through the details and compare available options for your client.
Call Brian at (800) 849-5520 or email [email protected] to talk through your next annuity case for a client.