If you sell variable annuities, you’ve probably been here before: You have an ideal candidate for a variable annuity – for example, someone whose income is high but has already maxed out 401(K) contributions; or someone in their late 50s without a traditional pension – but he or she is extremely reluctant to even consider one. Why?
As with any financial investment, variable annuities do have their detractors. Most likely your client’s hesitation is due to one of three main objections to variable annuities.
All of these arguments can easily be addressed by looking at the facts.
Objection #1: Variable Annuities Have High Fees
First let’s talk about the high fees: Remind your clients that all investments, including banks, mutual funds, and stocks, have fees too. In fact, there are many investment products that have higher fees than annuities that don’t provide the same value. The reason behind variable annuity fees is the guarantees they offer. Riders like the GMAB (Guaranteed Minimum Accumulation Benefit) or the GLWB (Guaranteed Lifetime Withdrawal Benefit) can help clients secure income for life and make it so they never run out of money. Do you know of any mutual funds that make that same offer?
Tom has been a popular industry speaker for many years and is THE retirement income expert. As a former Fortune 100 senior executive, Tom has dedicated his entire career to helping retirees obtain a happily ever after retirement. He has been featured on FoxBusiness, American College Wealth Channel Magazine, Round the Table, Advisor Today and GAMA Magazine.
Tom currently lives in Arizona with his wife and children.
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