How To Seize The Annuity Opportunity

Distribution. The benefit of owning annuities is the potential income stream they can provide, even on a guaranteed basis. Whether fixed for a certain period of years or for life, annuities are the only financial vehicle that can guarantee that the customer can't outlive the annuity income.

Some companies have begun going a step further by not only guaranteeing income for life but also guaranteeing increased payouts based on an index such as the Consumer Price Index. This approach to income allows customers to rest easy at night, knowing that not only will they not outlive their annuity income but more importantly, that their annuity income will increase on a set schedule in step with overall price increases.

Living benefits. Increased health care costs are a fact of life. Not only are more people living longer but also the medical advances that keep people alive and productive have a high monetary cost. How can boomers help maintain control of their assets, protect their beneficiaries and still have access to long term care benefits if needed?

Given the tax law changes that go into effect in 2010–changes that allow tax advantaged distributions from annuities for LTC payments–many carriers are now starting to deliver this type of combination product, an annuity with LTC benefits.

One carrier combines a deferred fixed rate annuity with built-in LTC benefits. It can help protect the customer's retirement assets by paying up to 3 times the annuity value (at time of first claim) in LTC benefits over at least 6 years. And if LTC is never needed, the customer will still have the annuity with a guaranteed interest rate adding to retirement funds.

As baby boomers approach retirement, many are sensing that there's a new perception about what retirement can truly be. From a physical perspective, anything appears to be possible to keep a youthful and exciting look. But it's only the insurance industry that can provide the financial security on a guaranteed basis, to allow people to live in comfort for their entire lifetime.

The annuity opportunity for producers should focus on consumer-friendly products that can provide a host of features whether the goal is accumulation, distribution or living benefit coverage. Smart, consumer-focused producers will gravitate to this type of sale very quickly.