Are you part of bank and life insurance companies or financial agents? If yes, you must be familiar with selling annuities. The target buyers of this business can be everyone, especially active workers. However, in common, agents will focus more on the senior market because it is effective. Then, how to sell annuities to seniors?
How to Sell Annuities to Seniors: Definition
What annuities are? Some of you might still be wondering about this term. Simply, an annuity is a retirement-saving product. Buying annuities means that you will protect your retirement days financially as this product works to pay you regularly in the future. How does an annuity generally work then?
In this case, we can also say that an annuity is a contract dealt by you with an insurance company. You buy an annuity by paying one or more premiums to the related company. Then, you will receive an income payment from the insurer for life or a certain period of time. So, can we say that an annuity is an investment as well?
How to Sell Annuities to Seniors: Is Annuity an Investment?
Some people say that buying an annuity means you pay a long-term investment. However, an annuity is technically not an investment since you do not immediately invest in the market.
In addition, buying an annuity does not require you to have a contribution limit. Moreover, the company will guarantee your income and principal protection during retirement days. In contrast, typical investments do not guarantee your financial benefit in retirement and you will potentially lose money.
Moving to the annuity again, simply, the company will give you an amount of money to save you financially on your retirement days. Seeing this, we can say that selling annuities is quite tricky. So, are you curious about how to sell annuities to seniors?
How to Sell Annuities to Seniors: The Target Buyers
Since the beginning, it is clearly stated that an annuity is more suitable for seniors or people who are above 60. The big question is, why should it be seniors? The primary reason for this is that most seniors need to overcome their retirement expenses with a stable income stream.
An annuity can help seniors to cover their expenses as Social Security mostly fails to do that. With an annuity in their pocket, seniors can manage the coverage for extra needs such as medical or living costs, and doing their hobbies. Those reasons may help you to convince seniors as we discuss how to sell annuities to seniors below.
How to Sell Annuities to Seniors: Steps to Convince Potential Buyers
Selling an annuity to seniors will mostly fail if you do not know how to convince them. The following steps may guide you to influence your potential buyers so the transaction process will happen.
1. Use Consultative Selling Technique
Do you know what consultative selling is? Consultative selling is a selling technique where you have to focus more on customers’ needs to sell your products. Before approaching your prospective buyers, you have to make sure that you go to the right target audience. In this case, seniors are your market.
Before offering the products, you need to convince them that their needs suit a lot with your annuities product. You may start it by asking whether they have CDs or a money market in the bank or not. If not, change your questions by asking if they have money in the stock market.
Then, when you have known where they put their money, you may bring the conversation to annuity offering. For the rest, you can make sure that buying an annuity will be better and safer for their retirement.
2. Annuity for Extra Medical Expenses
The second step of how to sell annuities to seniors is by convincing them about their medical expenses in the future. Without intending to offend, you should educate seniors that in their retirement, they may spend more unexpected expenses for health and medical needs.
Even the best insurance will not fully cover it since the expense of healthy and medical things is always increasing. By convincing them about this issue, you may approach them to have a fixed annuity. Having an annuity will benefit them for a long-term plan such as preparing for emergencies or maintaining physical health.
In addition, an annuity will still be helpful even in the worst condition. When seniors do not have any money prepared for emergencies, it is allowed to sell annuity payments to receive up-front cash. Moreover, educate seniors that they are able to get proper medical treatment with the money that will be paid in the future.
3. Annuity as an Alternative to Postpone Social Security Income
All seniors will surely be financially protected by receiving their income from Social Security. However, having it will not always cover a senior’s financial life since they have more unexpected expenses to anticipate during retirement. Then, bringing them to buy an annuity is one of the convincing steps you need to do.
Other than that, buying an annuity before everything will also give seniors more benefits, such as a delay in when they will receive income from Social Security. This means good since they can save money for later, and receive it in the bigger amounts.
The interesting part is, you can educate the seniors that they are able to get their benefit amount by waiting until they are 70 years old. This enables them to receive even more money than expected before because they have paid an annuity in the beginning.
4. Suggest the Best Annuity
The last step of how to sell annuities to seniors is to provide them with the best annuity. For your information, there are three types of annuities, they are Fixed Annuities, SPIA (Single Premium Income Annuity), and Variable Annuities. As a suggestion, you may go with SPIA because it is simpler than the other two.
In SPIA, seniors should pay the premiums at once, then the company will pay them regularly for the rest of their life. Moreover, this type of annuity is also predictable and safer with a higher withdrawal rate.
Have You Known How to Sell Annuities to Seniors?
Learning about the effective ways to sell annuities for seniors may need a longer time since most buyers are not interested in it. However, with those convincing steps, you may approach your potential client as a fixed buyer.