Based on data released by LIMRA regarding life insurance sales in 2016, the market for annuities is particularly hot. Increased annuity sales demonstrate that consumers are more conscious of how life insurance products can factor into their retirement planning strategy, but there are still signs that financial professionals need to market certain products more aggressively.
Annuity sales take-off
Total fixed annuity sales increased to $117.4 billion in 2016. This record-breaking number surpassed 2015 totals by 14% and eclipsed record highs in 2009 by almost $7 billion, according to LIMRA.
The increase in popularity of annuity products, especially fixed index annuities, is attributed to several factors. Gains in annuity sales demonstrate Americans’ concern with income in retirement. The consistent return annuities offer is particularly valuable for high net worth clients who are concerned about preserving capital either to pass to beneficiaries or keep in high-yield investments.
Fixed and equity indexed annuities can play an important role for clients. Annuities can function as a hedge, offering fixed-rate or even guaranteed investment products that are not subject to fluctuation of principal. This allows clients to weather short-term volatility. Only a couple of financial products can provide guaranteed lifetime income and with pensions becoming rarer, annuities are a good option. These guarantees help solve the most common financial concern among clients – the ability to afford a comfortable retirement and not outlive their income.
Annuities can help facilitate income distributions. With social security and pension income anticipated to replace less preretirement income, annuities can create an additional income source and assist in covering everything from basic to discretionary income needs in retirement.
Annuities can provide principal protection to balance out other investments. With the principal intact at the end of a distribution period, annuities can mitigate against inflation-adjusted income risks and life expectancies that continue to grow. In addition, annuities can help clients leave a financial legacy to a surviving spouse or beneficiary.
Marketing Annuities with LTAIS
The increase in annuity sales demonstrates that consumers are worried about their financial standing in retirement. This is a good opportunity to talk with your clients about their concerns and how annuities could be a good solution.
Ladenburg Thalmann Annuity Insurance Service or LTAIS, is a full-service annuity processing and marketing platform, with access to all relevant carriers and products, when you need it. LTAIS is a leading independent annuity insurance service brokerage company. It provides specialized point-of-sale support along with advanced marketing and creative estate and business planning techniques, delivering customized annuity insurance solutions to advisors.
With the ever-increasing oversight on the products and services you provide your clients, LTAIS’s sales support team works in close coordination with your firm’s product experts to make sure you are providing compliant products in the best interest of your clients.
Learn more about the LTAIS Advantage.
Editor’s Note: This post was originally published in October 2015 and has been reviewed and updated.
Latest posts by Highland Capital Brokerage (see all)
- April 2018 LTC Newsletter - April 26, 2018
- Robert W. Finnegan, J.D., CLU®, Published in Trusts & Estates Magazine - April 18, 2018
- Keys to Dealing with Policy Loans - March 26, 2018