Trying to Find an FIA for Your Older Clients?

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How about a 10-year Fixed Index Annuity (FIA) that back-tests an average annual return of 8.31% over the last 10 years? It is available through age 89, comes from an “A-“ rated carrier, and has no fees on the crediting methods. Oh...and it pays 3.5% even at age 89!

Got clients that are 90?

There are 7 different companies offering FIAs for 90 year olds. From 5 to 10 year surrender terms, and from carriers rated from “B++” to “A+”. And, some have bonuses—to help overcome surrender fees or market losses. Some have Return of Premium riders, in case an emergency arises. And they pay as high as 2.5% commission!

401(k) conversation starter

How often are you reviewing clients’ 401(k) statements with them? As a 2020 requirement of the SECURE Act, there’s an income projection usually at the bottom of the 401(k) statement.

Annuity solution:

Use that projection to start the simple discussion around “Is this projected amount enough income?” or “How much of that income would you like guaranteed?” Sometimes clients don’t fully understand that the projection of income has certain assumptions and no guarantees on it. This is an ideal starting point for a discussion on using annuities to achieve retirement goals.


A client brings the statement (including its income disclosure) to an appointment and after reviewing together, the client might indicate a desire to have at least 25% of the income to be guaranteed for life, and have no risk of outliving that piece of the retirement plan. That percentage goal gives you a target to start quoting annuities as a solution, potentially generating a sale using an in-service withdrawal from the existing 401(k).

3-Year Fixed Rate: 4.1%!!!

How many of your clients have certificates of deposit? What are they usually earning on those CDs? Likely, very little.

Annuity solution:

In today’s market, we’re typically seeing current one-year CD rates at 2.00% and five-year CD rates around 3.00%. Advisors who speak with clients prior to the client renewing a CD, can reposition the CD funds into a fixed or index annuity, providing greater returns.


The client is a conservative investor and typically renews their CD at a local bank or credit union. That CD is paying a one-year rate of 1.50%. Each year the client is receiving a 1099 for the interest earned, reducing the net after tax rate of return to below the 1.00% rate. The client should consider an annuity to increase their earnings and net after tax rate. Three-year duration fixed annuities are offering rates as high as 4.1%, which will substantially increase the interest earned, and accomplish interest gains in a tax-deferred manner. FIAs return as much as 11%!!!

With the evolution of today’s annuities, financial professionals look at annuity solutions for their clients more frequently today than in the past. It’s important to stay on top of current trends, research appropriate options, and present solutions that align with clients’ needs.

Start the conversation by looking to understand what your clients’ goals and objectives are, along with their risk tolerance, and concerns about outliving their income. Don’t assume they understand what annuities can offer, as surprisingly few consumers understand how they work. Give us a call and we can help craft talking points for each individual client case.

Give us a call to learn more:

~ Greg Skogsberg


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