How to Increase Your Qualified Annuity Business

By Bill Kauffman, Vice President, Financial Solutions

  • Originally published February 16, 2011 , last updated February 26, 2020
  • Annexus

We’ve heard a lot of talk over the past two years or so about how much wealth was lost in the financial meltdown. But in the spirit of the economic recovery we seem to be enjoying, let’s take a moment to consider the vast amount wealth that is still accumulating in America’s collective retirement accounts:

U.S. Retirement Assets at the End of 2009*:
  • $16 trillion in total assets
  • $2.8 trillion in 401(k) assets
  • $4.2 trillion in IRA assets

As you can see, there is an ocean of qualified money out there accumulating in 401(k)s  just waiting to be converted to annuities and used for retirement income.

Why Should You be Specifically Targeting Qualified Cases in Your Practice?

Typically, qualified cases are larger than those involving non-qualified dollars, because they involve rollovers from accounts that people have consistently contributed pre-tax dollars to over the course of many years. Plus, these types of cases are only going to become more common as more Baby Boomers reach retirement age and look to generate a steady income stream from their retirement savings.

How do you go about intentionally targeting these larger qualified money cases in your practice?

1. Offer a Unique Qualified Money Solution
Let’s face it, annuities were designed to offer a lifetime income stream, but the majority of policies never actually get annuitized. In fact, 80% of annuity dollars end up being inherited, according to a study by LIMRA.

That means a lot of qualified annuity owners are taking unwanted or unneeded Required Minimum Distributions (RMDs), depleting the amount their heirs will receive as a death benefit. What if you could offer a solution that would allow people with qualified annuities to take RMDs for 15 years and still leave more money to their heirs than they had when they started? With the Balanced Allocation Annuity (BAA) equipped with the Family Endowment Rider (GMDB rider), you can do exactly that.

This is the reason 65% of Annexus’ annuity business comes from qualified money. The BPASelect and the BalancedAllocation Annuity are the only Fixed Indexed Annuities on the planet that offer guaranteed minimum death benefit rider. This patented innovation allows you to offer a completely unique solution that allows your clients to leverage their qualified dollars for income and a death benefit.

2. Become a Qualified Money Expert
Remember the $4.2 trillion in IRA assets we mentioned earlier? Annexus Group agents have access to IRA Inc. Specialist training where they can learn how to close these cases and how to prospect for IRA rollover business in your community.

This isn’t some seminar full of unusable IRA trivia. It’s a business development meeting covering practical techniques that will help you uncover planning opportunities and close more sales. Call 1-877-645-4939 to ask about the next IRA Inc. training.

3. Take Advantage of Public Awareness Campaigns
The Obama Administration along with the Labor and Treasury Departments have actually been discussing ways to incent people to turn their 401(k)s into guaranteed income streams. Annuities are at the top of their list.

Some of the proposals include making annuity payout options mandatory in 401(k)s and offering tax breaks to those who convert a 401(k) to an annuity.

Granted, an endorsement from the U.S. government maybe isn’t quite what it used to be, but it’s still worth something. If nothing else, the government’s attention to this will help to raise awareness of the value and safety that annuities offer and educate people on annuities as a viable option for retirement income.

Make this part of your sales presentations. Talk to your clients about the fact the government is endorsing these products as viable tools to help retirees generate an income stream.

By taking advantage of the product innovations, training and public awareness campaigns that are currently out there, you could see your qualified annuity sales soar.

For more ideas on how to increase your business, qualified or non-qualified, contact one of our annuity marketers at 1-877-645-4939.

*According to the Investment Company Institute