If your client is young or rich then caps might be a factor; that is if lifetime income is not. For all of our other clients, caps have little relevance if you sell off of guarantees. Our indexed annuity sales have steadily increased every year and we haven't experienced any slow down due to lower cap rates. That is because we understand that income is king, not cash.
Market participation is not a meaningful benefit to our demographic, the middle market. Any agent that sells off of market participation is going to get punished during periods of low cap rates. Instead, focus on guarantees and your sales will never go down.
Here are three key factors that help us sell more than a million per month in indexed annuity premiums:
- Guaranteed of Principle
- Guarantee of Growth for the Purpose of Lifetime Income
- Guarantee of Lifetime of Income
If your annuity lead conversions are in the tank it is probably because you are selling product, not solutions. Most agents sell details, not ideas. Most agents sell features, not benefits.
If you are in the idea, solution, and benefit market, then caps won’t matter.