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What You Need To Know About Life Income Annuities

by Chelsea Rosine | Jun 24, 2019
Income Annuities How popular are incoming annuities?

As the Baby Boomer generation retires, income annuities continue to increase in popularity. According to an IRI report, in the third quarter of 2018 the insurance industry saw nearly $55 billion in annuity sales. These sales indicated a 20 percent increase year over year and the sales keep growing. With the increase of annuity sales, it’s important to understand what an annuity is and how you can use this popular product to help you clients.

What is an income annuity?

A life income annuity is guaranteed income your client can receive from retirement throughout the rest of their life. Your client can either invest a lump-sum premium payment with an insurance company or make flexible premium payments over time. Once the annuity contract annuitizes, your client’s insurance company will then make payments to your client -- monthly, quarterly, semi-annual, or annually -- for the rest of their life.

An immediate income annuity means your client will receive your income within a year of the purchase. Many insurance companies also offer deferred income annuities which means your client will receive begin to receive payments further into the future. To determine how large your client’s checks will be, the insurance company will use an algorithm that calculates how much you’ve paid into their program, your predicted life expectancy, and the interest accrued.

Income annuities can give a sense of security to your clients as they provide guaranteed income. The payments are not dependent on a stock market and will be the same amount every term. Income annuities can be a reliable supplement to your client’s existing retirement accounts as well as Social Security and pension plan payouts.

How can I sell income annuities?

Annuities are regulated at the state level and each state has its own requirements regarding your license. You need to complete continuing education credits in order to legally sell annuities in your state. WebCE offers continuing education and training to meet your continuing education requirements while also helping you become the trusted source in your industry. We offer courses on fixed annuities, as well as courses on variable annuities and indexed annuities. To order annuities continuing education courses, visit WebCE’s course catalog or call our knowledgeable customer service team at 877.488.9308.

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