If you are looking for a guide on how to sell annuities, look no further. This blog post will discuss the basics of annuity sales and give you some tips on becoming successful in this industry. Annuities can be a great way to earn additional income, and with the proper knowledge and skills, you can be successful in selling them. So let’s get started.
What Is an Annuity
An annuity is a contract between you and an insurance company that will provide you with fixed or variable payments for a set period or, in some cases, for the rest of your life. There are many different annuities, such as fixed, variable, or indexed annuities (commonly referred to as equity-indexed annuities).
What Do You Need to Know?
To become successful in the annuity industry, you will need to know a few things about the product that you intend to sell. Suppose we define an annuity contract in simple terms. In that case, we can say that it is an insurance contract with a person (you) who pays premiums regularly and receives a defined sum of money upon reaching a certain age or condition stated in the contract.
All this means that selling annuities requires you to have extensive knowledge about insurance contracts because, as an agent, you are expected to provide your clients with correct information about the product they are about to purchase. You need to know what makes up an annuity contract, how it works, and what type you would be best for your client.
The next thing that comes to mind is the different types of annuities on the market. Many types of annuity contracts differ in terms of their guarantees provided by insurance companies (fixed vs. variable), returns generated (guaranteed vs. non-guaranteed), and taxation (taxable vs. tax-deferred).
How To Sell Annuity
Once you know the annuity product and understand how it works and what type best suits your client, it becomes a lot easier to sell. First of all, you will need to do some marketing and find people who might be interested in buying an annuity contract.
Secondly, you will need to present them with an offer they cannot refuse. You will want to find out what people need and how your product can solve their problems.
You might consider attending social media groups where people discuss the topic of retirement and the problems they face with a mindset of providing them with solutions.
Here are three main options that you can try when selling an annuity:
Sell The Entire Annuity
The first option that you have is to sell the entire annuity contract. In other words, your client will pay a lump sum amount of money in exchange for you guaranteeing them a monthly income throughout their lifetime.
Sell The Annuity Payment on A Partial Scale
Another option is to sell the annuity contract on a partial scale. For example, if an annuity contract guarantees your client a monthly income of $1,000 for the rest of their life, you can offer them to buy a portion of this ($250 every month) in an up-front payment.
Sell A Portion of Payments
This is yet another option that you can use when selling an annuity. For example, if your client wants to buy the $1,000 monthly income but doesn’t want to pay for it in full, you can suggest paying $500 upfront and the remaining amount ($50 a month) for 30 years.
Benefits Of Selling Annuity
By now, you have probably realized that there are numerous benefits associated with selling annuity contracts. The most obvious benefit is the money you can make by selling annuities. Of course, you will need to factor in the expenses that come with running a business but compared to other types of investments; annuities can be a lucrative source of income.
Another benefit is that you get tax advantages. When you buy an annuity contract that generates taxable income, this income will be exempt from taxation.
No question selling annuity contracts is one of the most profitable business forms. However, to be successful when annuity of sale, you need to know about the product, the market, and competitors. While it might seem challenging at first, armed with the necessary knowledge, you can become a successful annuity sales agent in no time.