Many of your insureds will be putting a lot of money into annuities this month, next month, and for many months to come. Based on national sales figures, this is a near-guarantee. Will they buy through your agency or from a competitor? If you're an agency decision maker, the answer lies in your hands.
The first issue you must address is whether you have a serious commitment to Life production. This usually means having, at minimum, a full-time, in-house Life professional contracted to the agency.
The second important issue to consider is whether anyone working in or with your agency is professionally competent to explain and sell annuities. Be aware that a competent Life producer doesn't necessarily equate to a competent annuity producer. Your Life associate may now have a full plate with non-annuity production, or may not want to learn another product line. If it's necessary to go elsewhere, here are some options:
- Identify or create a Life producer who's willing and able to specialize in annuities. It isn't a complex field, but problems can arise if the work isn't handled properly.
- Work with an independent annuity specialist such as a Personal Producing General Agent.
- Work with a Managing General Agent, preferably one who represents a number of different companies, because a wide choice of competitive products is preferable and no single carrier can offer them all.
- Work with an independent financial planner. Before reaching outside, however, try to gauge your agency's potential to see whether it could support an in-house producer. For motivation, understand that half of the new business premium flow to Life carriers comes from annuities. Some of this replaces money that would otherwise to mutual funds or certificates of deposit or comes from those products. Why? Because annuities are unique. They have qualities that no other single product can offer, such as:
- Income for life. With life rising expectancy and new developments in genomics and disease prevention and control, the fear of outliving one's money is very real, and growing.
- Tax-advantaged growth. Equity index annuities offer guarantees to share in stock market growth with no risk of loss of principal when the stock market declines. Equity index annuities alone have converted many folks into annuity lovers. It's a relatively simple story at the basic level, but at last count there were some 65 variations of the product, and your producer ought to know which to show prospects and which to bypass.
This isn't the place to explain annuities, of course. Your knowledgeable producer can do it for you. This is the place, however, to persuade you to seriously commit to annuity (and Life) production for the sake of profit, client retention, professionalism, and increased agency value.
P/C principals, producers, and even CSRs can gather annuity leads very easily while talking to clients about savings, collections, investments, retirement, gifts, charity, and many other topics. Here's a sampling of questions they can use:
'Could you retire tomorrow? If not, my associate (the annuity specialist) can show you the newest products. Would you like me to ask them to call you? No obligation, of course.'
'If your life outlasts your health (think about that one), my associate can show you an answer to that problem.'
'When does your next CD mature?' (There's no need to mention your associate here; just ask for the maturity date.)
'Would you like to see a way to avoid probate on your savings? My associate ...'
'Would you like to hear about a guaranteed way to gain if the market goes up, with no chance of loss if the market goes down? My associate ...'
I stress bringing 'my associate' into the discussion very early on, because you as the P/C person (although licensed in Life) should avoid being asked to start explaining annuities. That's not what you're there for. Don't get ensnared, even if you're competent in annuities, unless you're prepared to go all the way to the close and write the application right then and there. Your job in getting a lead is just that and no more: Get the lead. Leave the sale to the specialist. Many P/C producers, even CLUs, get entangled in Life complexities when they shouldn't or don't want to.
As part of the Life family of products, annuities can serve as profit centers, prospecting tools (as the above lead openings illustrate), or as complements to Life insurance programs. Either way, they shouldn't be ignored. Keep in mind that any policy your agency ignores might be written by a potential competitor's Life producer whose P/C associate tries to get the entire line.