Use the Employment Analogy to Head Off the Annuity Objection
“Is this an annuity? Don’t waste your breath. I don’t want one of those.”
Ever heard this before?
Many producers have had trouble addressing the annuity objection, especially in recent years as both indexed and variable annuity sales have proliferated the marketplace. Misinformation from both credible and suspect sources has contributed to the malaise. The problem is one of positioning; it’s no longer effective in many cases to position the annuity as simply an alternative to market risk.
Today, however, is the best time to sell annuities to your clients. The growing need for guaranteed income, combined with the disappearance of many defined benefit plans, such as pensions, has created a huge market in the U.S. for the contractually-income solutions today’s indexed annuities provide. But the question remains- how can today’s producers position annuities so their potential clients see the benefits?
The best way may be to start the conversation with your clients as planning for the non-working income phase, retirement; and then compare that phase to the working income phase, employment. Compare the benefits of their future retirement product choices at the onset of their non-working income phase to the benefits of their employment choices when they first entered their working income phase. In other words, what type of factors did they take into consideration when they chose their first job?
The following simple script may be a way to challenge them:
OK- when you were looking for a job, what kinds of things- other than your actual job description- did you want to know? (Write down, put a check mark next to each one as the client agrees.)
· Salary- correct? It’s always good to know how much you’re going to make.
· The better the job, the more likely you would have a guaranteed contract, like some professional athletes do. If you had a choice between having a contract and knowing what you were going to be paid, and not having one, what would you choose? Of course. You’d rather have a guaranteed contract.
· How long would the income last? Definitely. You want to plan for that. In the non-working income case, the longer, the better, right?
· Can I get a raise in the future? Is there opportunity for advancement? Do we know exactly when that is, and do we have control of that? Whenever we take a job, we want to know if we can move up in that company so we can make a little more money. You want somewhere that has that opportunity.
· Benefits- definitely. What type of benefits did that job offer? That’s always good to know.
So, now we have to plan for your next job- or, your “non-working income phase.” Would you agree that if we could nail down as many of the things we’ve discussed, and make them as guaranteed as possible, that that would be a good thing?
OK, good. Let’s create a plan for your next “job.”
· How much “salary,” or guaranteed income do we need?
· Do we want a contract?
· How long should that contract be?
· What kind of raise do we want? COLA? SS gap? When should your raises occur? How much can they be? We should take this all into consideration, and build it into your income plan.
· What kind of benefits do we want in the non-working income phase? Here, most people talk about health benefits, family benefits, and opportunities for their beneficiaries.
As you can see, the same considerations for choosing employment income are relevant when choosing retirement income, especially today: guarantees, contracts, inflation and cost of living adjustments, health care benefits, and so forth. Would your clients accept a job without knowing what to expect in guaranteed income? Of course not. From there, it’s only natural to position one of the excellent indexed annuity solutions available in the market today to provide the income they need in their non-working income phase.
What are some of your sales positioning ideas?
Want to learn more? Be on the lookout for the “next job script,” coming soon from Asset Marketing Systems.