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Annuities Could Reduce Clients’ Fears About Lifetime Retirement Income

One of the fears many retirees have involves how they could run out of income before they die. In fact, 25% of males aged 65, and 34% of females aged 65, will live to age 90.

If your client does live to age 90, will he/she outlive his/her income, taking into consideration even small annual increases of inflation? Reduce his/her buying power? Other causes of reduced assets might include medical costs and long-term care expenses; these costs can easily exceed $100,000 per year. Due to stock market fluctuations, the value of your assets is unpredictable and unstable, especially if the economy goes into a bear market.

What retirement planning options do consumers have to safely protect those hard-earned dollars during their working years? One option could include a fixed, indexed, or fixed indexed annuity (FIA) as part of their strategy.

The increase in total fixed annuity sales rose 28% in the second quarter to $35.5 billion. Year to date, total fixed annuity sales were $66.5 billion – 15% above the first half of 2020. (LIMRA,09/28/2021)

An index annuity is an annuity whose rate of return is based on a market index, such as the S&P 500 or the Nasdaq 100. An index annuity is not a variable annuity, and unlike most variable annuities, an indexed annuity sets limits on your potential gains and losses. Therefore, the cash value and already credited interest are not exposed to market risk.

In short, many people are interested in the security of their financial assets, and the expression is often heard that people are more interested in the return of their money than the return on their money. Based on the increases in annuity purchases, the insecurity of COVID-19 also is likely increasing the purchase of the security that can come with both a fixed and an index annuity or FIA.

That’s why more consumers are researching fixed and indexed annuities to alleviate their fear of outliving their retirement funds and running out of income before they die. An annuity is the only financial instrument consumers can purchase that can guarantee income for the rest of their lives.

If you would like more information on selling annuities to your clients, please contact AIP Marketing Alliance’s Business Development team at (800) 783-5206 Press #2 or send a message to marketing@aipma.com.

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For more than 40 years, AIP Marketing Alliance (AIPMA) serves as a premier life insurance and annuity distribution partner to provide full-service support to independent wholesalers, brokerages and agents from our Troy, Michigan office. Copyright 2022