{"id":15901,"date":"2019-07-03T07:00:02","date_gmt":"2019-07-03T11:00:02","guid":{"rendered":"http:\/\/lifeinsurance-orleans.ca\/Life-Insurance-Blog\/unlocking-peoples-annuity-reluctance\/"},"modified":"2019-07-03T07:00:02","modified_gmt":"2019-07-03T11:00:02","slug":"unlocking-peoples-annuity-reluctance","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/07\/03\/unlocking-peoples-annuity-reluctance\/","title":{"rendered":"Unlocking people\u2019s annuity reluctance"},"content":{"rendered":"\n
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For a lot of clients, annuities present an unacceptable tradeoff: giving up a piece of their nest egg isn\u2019t worth the prospect of guaranteed lifetime income. According to LIMRA<\/a> SRI Corporate Vice President Matt Drinkwater, such clients fall into two categories.<\/p>\n

\u201cIf you ask people who have very little money \u2014 US$50,000 to US$100,000 \u2014 they\u2019re not interested in lifetime income,\u201d Drinkwater said in an interview with InsuranceNewsNet magazine, citing data that the firm obtained in a recent survey of Americans. \u201cAnd the reason is that this group is replacing a lot of their income with Social Security and they don\u2019t have much money to apply to anything anyway.\u201d<\/p>\n

The second group are the ones with US$3 million to US$5 million. While a case for annuities can be made for those in the $3 million range, the ones with US$5 million are \u201cprobably not going to live long enough to spend down all [their] assets,\u201d Drinkwater said.<\/p>\n

The \u201csweet spot\u201d for annuity sales, he offered \u2014 the segment with the need and interest, as well as the money to spend on the products \u2014 can be found among consumers with US$100,000 to US$1 million in household assets. And when it comes to steering the retirement-planning discussion toward discussions about annuities, advisors have a number of options.<\/p>\n

\u201cIf you have a client and it\u2019s already been established that this client is concerned about outliving their assets \u2026 then it\u2019s actually in the client\u2019s best interest to hear about solutions that include annuity products,\u201d he said. The talk could start with familiar sources of lifetime retirement income like government benefits and pensions, and then move on to explain that annuities are like a personal pension one pays for with their own savings.<\/p>\n

It could also be useful to stress that the choice to buy annuities is not an all-or-none decision, Drinkwater added. Given the multiple goals and objectives people have in retirement, he argued, it wouldn\u2019t make sense to deploy all of one\u2019s assets toward a single goal; advisors could suggest that some portion of one\u2019s nest egg go toward supplementing their lifetime income from government benefits, while the rest can go toward emergencies, legacies, gifting, and incidental expenses.<\/p>\n

\u201cI would also say that there are different flavors, different types of guaranteed lifetime income,\u201d he said. Financially sophisticated clients with experience handling their own money typically don\u2019t want to relinquish control, so they may not appreciate a pure annuitization product. \u201cThat\u2019s where guaranteed lifetime withdrawal benefits on deferred annuity products are probably the better match. It allows some degree of asset control.\u201d<\/p>\n

For clients who are skeptical about the future viability of public pension funds, annuities can also be a good fit. LIMRA research has found such sentiments stewing among Generation-X clients, so advisors can offer annuities as an option to go with, though it doesn\u2019t have to be immediately.<\/p>\n

Read the original article at https:\/\/www.lifehealthpro.ca\/rss\/ <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

For a lot of clients, annuities present an unacceptable tradeoff: giving up a piece of their nest egg isn\u2019t worth the prospect of guaranteed lifetime income. According to LIMRA SRI Corporate Vice President Matt...<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/15901"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=15901"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/15901\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=15901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=15901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=15901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}