Annuity Meeting #4 - Applications / Tools
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Objective - Learn how to help the client through a stress-free application process, including the transfer and replacement paperwork.
We will cover what tools to use to find the right annuity and special agent tools that will help you find opportunities for future replacements. |
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Annuity Training #4
How to manage your book, Research, & Process Applications and Replacements
How to manage your book, Research, & Process Applications and Replacements
- TOOLS - Use these tools to help you find annuity opportunities and make the sale
- RESEARCH - How do you find the right annuity for the client
- APPLICATION PROCESS - Best Practices to eliminate friction with the client
- REPLACEMENTS
- The PROCESS - How do we complete a replacement
- The REASONS - What justifies a replacement (Better get this right)
Before the Application
THE PROCESS IS KEY...
THE PROCESS IS KEY...
- Meeting #1 - How to connect with the client, build value, and promote software analysis
- Meeting #2 - How to use software to uncover opportunities for annuities
- Meeting #3 - How to explain Fixed Index Annuities so the client understands it
- Meeting #4 - The Application Process, which should be stress-free for the client
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If the first three steps were not accomplished correctly, you will have a weak application and perhaps lose the sale.
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ANNUITY TOOLS
Here is a tool that will help you manage your book of business. Remember that if you keep your business organized, you will find opportunities to help clients when the time is right, such as finding a replacement annuity that might offer better rates, new features, and more.
Do you offer annual reviews?
If you do:
Do you offer annual reviews?
If you do:
- It eliminates friction with the client
- You maintain a working relationship for additional opportunities
- Gets you ongoing Referrals
- Builds trust and credibility for future replacements.
TRACK YOUR BUSINESS
List your current clients and update yearly after their anniversaries. When you know the details, you will find the solution.
*** Special Feature - When the advantage is Positive, the item lights up GREEN; when Negative, it lights up RED.
List your current clients and update yearly after their anniversaries. When you know the details, you will find the solution.
*** Special Feature - When the advantage is Positive, the item lights up GREEN; when Negative, it lights up RED.
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Keeping it simple makes life easy...
The client can, in one step, see the instant advantage of swapping an annuity from one carrier to another in less than one minute...
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ANNUITY RESEARCH
When looking for the right annuity for the client, there are many methods, such as calling your annuity Wholesaler, Insurance Company, or using online software like ANNUITY RATE WATCH. There are other tools on the market, but some are misleading or incorrect.
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WHAT CAN YOU DO Vertical Divider
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HOW TO ACCESS
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ANNUITY RATE WATCH SAMPLE
Choose MYGA, Fixed Index, Income, or Illustrations 
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INCOME RIDER HEAT MAP
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SELECTING AN INDEX From experience, I always suggest a strong S&P 500 index and then an annuity with additional strong indexes that could potentially outperform the S&P 500 with higher indexing participation rates. Here are some samples... |
APPLICATION PROCESS
The application should be a stress-free process for the client.
- BEFORE THE MEETING - Prefill the application with the information you received on the Retirement Analyzer
- CONFIRM THE SALE - Remind the client, the purpose of today is to lock in the rates on the Fixed Index Annuity. Remember, this is a tool that you will have to protect yourself against the negative markets that occur. This will be where you access funds to prevent the sequence of returns issues.
- COMPLETE APPLICATION - Review the application with the client and help them sign it (How the Client Signs the App)
- SEND EMAIL - The client receives something from you is important, not left thinking "WHAT DID I SIGN?"
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APPLICATION
EMPLOYER PLANS
Some QUALIFIED PLANS (from employers), like 401ks, 403bs, may require their own forms or not use a transfer form at all. Under these circumstances, it is best to find out in advance what the process is. A simple method is to book a quick call after Meeting #3, with the client, where you both call the insurance company or custodian (Fidelity, Schwab, etc) that you plan to take the funds from. |
IMPORTANT FORMS Do your homework to avoid delays
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SENDING EMAIL TO CLIENTS
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Emails should be like a mini-reminder of
"WHY the client chose the plan."
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REPLACEMENT PROCESS
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When you replace an annuity, always follow a process for success
Always include this statement: "Past performance does not indicate future performance." |
THE REPLACEMENT REASON
There are times it makes sense for an Annuity Replacement. Listed below are the most common reasons.
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Reasons for Replacement
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CHOOSING GROWTH INDEXES
Performance is important, and often products that were issued several years ago may not be as competitive as products issued today because of the current rates, bonds being used, the level of competition, and many other reasons.
PERFORMANCE OPTIONS
CHECK RATES - Remember that rates can go up and down. If the current rate is close to the annuity you want to replace with, that may not be good for the client, as you're just trying to make a sale. But in many cases, some rates like the S&P 500 may be paying very low, where the replacement product may be double or triple the rate, and a better potential opportunity for the client.
REPLACEMENT BUSINESS
Performance is important, and often products that were issued several years ago may not be as competitive as products issued today because of the current rates, bonds being used, the level of competition, and many other reasons.
PERFORMANCE OPTIONS
CHECK RATES - Remember that rates can go up and down. If the current rate is close to the annuity you want to replace with, that may not be good for the client, as you're just trying to make a sale. But in many cases, some rates like the S&P 500 may be paying very low, where the replacement product may be double or triple the rate, and a better potential opportunity for the client.
REPLACEMENT BUSINESS
- NET ZERO LOSS - Remember that it is best to keep the client WHOLE (which means they do not lose money) on the transaction, going from one company to the other. Use the Annuity Calculator to help you determine the outcome.
- Common Guidelines - Annuity contracts should have no greater surrender charge than 5% net loss and be 2 - 3 years old. If the surrender is greater than 5%, then you might need to use a BONUS product to help the client transition over to the annuity that has the potential for better performance or a greater income rider.
- BONUS OPTIONS - There are many types of bonuses on the market. Be sure you know the details
- Premium Bonus with Fee
- Premium Bonus without Fee
- Income Rider Bonus (Fee-based)
- BONUS (+/-) - A bonus will often help a client get out of a bad product into a potentially better product, but it will REDUCE the amount of potential gains compared to an annuity without the bonus being offered.
- Age over 75 - A bonus may be a good deal for them due to their potential life expectancy
- Age under 75 - A bonus may prevent them from reaching greater earning potential based on life expectancy
- Bad Growth Product - Replacing an annuity with poor index options (Very low rates, very few choices)
- Bad Income Product - Replacing an income product with a growth product or an income product with a higher income
SHOULD WE USE A BONUS
BONUS ANNUITY
Can help a client pay off a surrender charge and transfer without a loss, BUT remember that these BONUS annuities will have lower index options, resulting in less growth over the term of the policy. ONLY USE FOR SURRENDERS OR AGE!!!
Company |
F&G |
Global With Bonus |
Difference |
S&P 500 Cap |
3% |
5.75% |
Higher Cap Replacement |
S&P 500 Participation |
40% |
N/A |
No Option |
*** These are only samples, do not use them for actual comparisons
NO BONUS
May cause a client to lose money (max 5%) in the transfer, but with higher index rates, this may offer the client the potential for greater policy values. Use for Younger Clients under 75 when possible, unless surrender is over 5%.
May cause a client to lose money (max 5%) in the transfer, but with higher index rates, this may offer the client the potential for greater policy values. Use for Younger Clients under 75 when possible, unless surrender is over 5%.
Company |
F&G |
Global NO Bonus |
Difference |
S&P 500 Cap |
3% |
9.25% |
Higher Cap Replacement |
S&P 500 Participation |
40% |
N/A |
No Option |
*** These are only samples, do not use them for actual comparisons
SALES OPPORTUNITY
Check out your policies yearly and have a system to replace underperforming products using our Annuity Calculator
Check out your policies yearly and have a system to replace underperforming products using our Annuity Calculator
Income Rider vs Growth of the Index
Often, we see those with Annuities be pitched an INCOME annuity over a GROWTH Annuity.
Often, we see those with Annuities be pitched an INCOME annuity over a GROWTH Annuity.
- However, is that really the best strategy?
- What really matters is what the client wants.
SAMPLE COMPARISON
INCOME RIDER VS. GROWTH ANNUITY
Rhonda has an F&G annuity that will pay her $8,833 per month with a starting value of $900,000.
Which option is better, Income or Growth?
INCOME RIDER VS. GROWTH ANNUITY
Rhonda has an F&G annuity that will pay her $8,833 per month with a starting value of $900,000.
Which option is better, Income or Growth?
- With Income Rider at age 85 = $2,407,936
- With Growth at age 85 = $3,674,057
- Growth wins with $1,266,121
With Income Rider ($2,407,936)
A fixed Index Annuity with a 1% income rider and assumed 3% growth
A fixed Index Annuity with a 1% income rider and assumed 3% growth
No Income Rider ($3,674,057)
A fixed Index Annuity with a 5% potential growth and no fees
A fixed Index Annuity with a 5% potential growth and no fees
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What is wrong with a Variable Annuity?
WHY ARE VARIABLE ANNUITIES NOT GOOD?
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Suze Orman says:
"Just stay away from Variable Annuities, and you will be just fine." The only people who love these are the advisors who sell them for the HIGH FEES |
