Fifty-nine percent of current annuity customers struggle with their financial health, and many do not fully understand the products they buy, according to a new study from J.D. Power.
J.D. Power measures any consumer's financial health as a metric that combines the person's spending/savings ratio, creditworthiness and safety net items, such as insurance coverage.
"Long-term customer satisfaction with individual annuity products is directly linked to customers' understanding of a fairly complex financial product, which makes agent and advisor communication such an important part of the equation," Breanne Armstrong, director of insurance intelligence at J.D. Power, said in a statement.
But there's more to real understanding of annuity products than simply filling out and signing forms, Armstrong said. Forty-three percent of surveyed annuity customers reported that their agent or advisor filled out the complete application for them, and those respondents had lower overall satisfaction scores.
"Advisors and agents need to educate their customers, and annuity customers need to make sure they understand the details of what they are getting," she said.
