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Ultimate Guide to Fixed Annuity Sales

By  Senior Market Advisors  on July 10, 2019

Did you know you can earn up to seven percent commission on fixed annuity sales? Success takes a certain kind of person who is willing to “work smart.” It’s important for you to know the ins and outs of fixed annuities so you can educate your clients. 

An annuity is a contract between your client and an insurance company which allows the client to receive a lump sum or a series of payments. Clients can use annuities to help manage their money during retirement. A fixed annuity is a tax-deferred annuity that allows capital to build. Your clients must understand what they’re doing with their money, and how annuities grow their income after they stop working. They need to understand the value of an annuity.

Who This Guide Is For

Successful insurance agents understand the value of problem-solving for their clients. Every fixed annuity sales situation is different.

You have to understand your clients’ objectives. The most successful agents offer products based on what can benefit the client the most. 

For example, sometimes a fixed indexed annuity (FIA) is the best way to accumulate funds for your client. FIAs have the most potential for growth compared to a multi-year guaranteed annuity (MYGA) or a single-premium immediate annuity (SPIA). It’s up to you to determine your client’s needs and fulfill them.

What to Consider Before You Start Selling Annuities

Fixed Annuity Sales | Senior Market Advisors

Selling fixed annuities isn’t for everyone. It takes a specific sales skill set that combines both hard and soft skills, including: 

Strong Reasoning Skills

Annuity sales require strategic thinking, and sometimes the most obvious answers aren’t the right ones. Every meeting requires meticulous attention to detail and solid reasoning skills to make sure you’re offering the right solution.

Asking the Right Questions

Your objective must be to find the best product for the client. If you go into a meeting with answers in mind, you will fail. Instead of asking, “Would a product without fees, costs, or market risks interest you,” ask “Which type of product would you choose: a high-risk product with a higher return, or a low-risk product with a lower return.” That way, you have an opportunity to learn what your client values most.

Active Listening

Let your clients feel like they’re leading the conversation. In order to do that, you must listen well. That means doing more than just hearing what they say. Watch your clients’ body language. Listen to their voice tones. You have to adapt to your clients’ communication needs.

Work Ethic

Being great at selling annuities requires more than just scoring well on your life insurance exam. Compliance rules constantly change, and you have to stay on top of your education and licensing requirements. Insurance carriers offer new products and options all the time, and you need to stay current on all of those items.

How to Get a Fixed Annuity Sales License

Licensing requirements for selling annuities may vary. First, you need a life insurance sales license in any state you plan on selling fixed indexed annuities, or fixed annuities. 

Many states require you to pass a pre-licensing course and a licensing exam. For example, Tennessee requires you to complete 20 hours of life insurance training, and to score at least 70 percent on a certification exam. Once you pass that test, you’ll receive a certificate of completion that’s good for six months during which you can take the state licensing exam. After you pass the exam, you’ll need to be fingerprinted, and then you can apply for a license.

Once you have the proper license you will need to complete product certifications from the insurance carriers you contract with, and complete any courses your state requires.

How Much Money You Can Make Selling Fixed Annuities

Fixed Annuity Sales | Senior Market Advisors
Fixed Annuity Sales | Senior Market Advisors

Annuity commissions vary based on the product type, your client’s age, and state requirements. Your contracts will provide specific details, but here are some averages:

Fixed Indexed Annuity

Fixed indexed annuities (FIA) usually pay the highest commissions. FIA commissions come directly from the insurance company, rather than from your client’s account. Many clients think that agents’ commissions come from their own accounts, however, that’s not the case.

The average agent commission for FIAs is 4-7 percent. For example, if your client still has a 401K from a former employer, and the client rolls over $300,000, you’d receive anywhere from $12,000-$21,000.

Multi-Year Guaranteed Annuity

Multi-year guaranteed annuities (MYGA) can be an alternative to a CD. Your clients can put their money in an annuity with a guaranteed return. Some MYGAs can yield up to 25 percent, while even the best CD rates are about three percent in May 2019.

Average commissions for MYGAs are about 1.5-2.5 percent.

Single-Premium Immediate Annuity

Single-premium immediate annuities (SPIA) allow your clients to take a lump sum of money and use it as income. For example, if your client has $250,000 in a 403b from a government job, and he wants to retire and use that money as an income stream, he can roll the money into a SPIA and immediately receive payments. 

You can expect an average of 0.5-3 percent for SPIA commissions. 

How to Sell Annuities

Life insurance sales are about building and maintaining relationships, and selling annuities is no exception. Along with having the proper licensing and training, you must know how to follow up with clients and use sales tools such as a CRM. Be sure to hone your problem-solving and listening skills.

Your First Appointment

Even though every client and appointment will be different, your first appointment should meet the following criteria: 

  • Set client expectations during your first meeting.
  • Do not talk about product performance during your first meeting.
  • Ask questions that guide you to the product the client needs.
  • Take notes so that you remember everything.
  • Set your second appointment before you leave.

Selling Annuities Online

Fixed Annuity Sales | Senior Market Advisors

Selling annuities online requires the same soft skills as in-person sales. You still have to ask the right questions and use your clients’ answers to offer the products they need.

You must still be licensed in the states you want to sell in, but you do not have to live in those states. That means online sales give you an opportunity to cast a wider sales net.

Online fixed annuity sales require using technology to its full potential. With more potential leads, you must be even more on top of things. 

Your CRM will help you manage your time, and also help make your conversations more efficient with features such as appointment setting and note-taking. Pro tip: Take notes in your CRM during every meeting, because you won’t remember everything you discuss in future appointments. Your clients want to know that you care, and remembering important details about their lives will help you build rapport.

Use a cloud-based communication platform such as Zoom for video conferencing, calls, and messaging. Video meetings can be almost as effective as meeting with your clients in person because you can see facial expressions and read body language.

Start Selling Fixed Annuities Today

At Senior Market Advisors, we provide our agents with the tools for successful fixed annuity sales. When you partner with us, you can sell products from all of the major life insurance carriers. You’ll also gain free access to our proprietary CRM and support from an experienced sales and marketing team. Ready to start? eContract with us now.