Category Archives: Sales Training

Annuity Sales Training: A Retirement Plan for Living, or Dying?

February 24th, 2012 by

Here is a great article debunking the myth that a 4% withdrawal rate is a solid rule for a lifetime income plan. It amazes me that variable brokers use a 4% non-guaranteed withdrawal rate when our lifetime income benefit riders pay out at least 4% on a guaranteed basis, and usually much more.

4 Percent Withdrawal Rate May Be Too High for Today’s Retirees – CBS MoneyWatch

One of the keys to being a successful annuity agent is the ability to get your client to understand that there is a problem with their current situation. If they think nothing is wrong then there is nothing you can do for them. Here is a sale presentation to go along with this article that will help you show your client that 4% that is not guaranteed is no plan at all.

Annuity Sales Presentation: A Retirement Plan for Living, or Dying?
You, “Mr. Jones, do you want a retirement plan for living, or for dying?”

Client, “What do you mean?”

You, “You have been told that you need a pile of money that you will draw off of in the hopes that you will only live to a certain age so you won’t run out of money. In other words, your financial plan is based on you dying by a certain age. It’s a plan for dying, wouldn’t you agree?”

Client, “Yes, I never thought of it that way but I guess you are right.”

You, “Mr. Jones, one of the major problems with plans for dying is that the closer you get to the age you are suppose to die the more stress you will have because of the fear associated with outliving your plan for death. In fact, it might even be possible that you will not outlive your plan for death because of the stress it causes the closer you get to the age you are suppose to die. Can you imagine how stressful running out of money would be?

Client, “Yes, that would be terrible.”

You, “Mr. Jones, I want you to know right now that I don’t work with death plans. I specialize in plans for living! If I could show you a way that you would never outlive your money so you could plan on living as long as possible, would you be interested in that?”

SOLD: Sell the concept, not the product.

Annuity Sales Tool: Stock Market Confusion

February 9th, 2012 by

This is probably one of the best annuity sales tools I have seen in a long time!

This is an actual screen shot from our stock ticker on two separate days.  Look at the contradictory headlines related to the Greek economic news below the stock prices.

Greek Economic Headline News Contradictions

If the experts can’t figure out what is going on then what chances do our senior clients have?  The graphic linked above and displayed below just goes to show how much our clients need guaranteed lifetime income annuities

5 Elements Top Annuity Producers Possess – My Two Cents

August 29th, 2011 by

I ran across this article in LifeHealthPro and thought it hit the nail right on the head.5 Elements Top Producers PossessIn the article it says, “A recent study examined the performance, personality, skills, and attributes of 79,747 salespeople from 4,317 organizations and found five elements that all top salespeople had in common.  What I have done is taken the elements they identified and then interpreted how they each relate to top annuity producers.

Jack Marrion, President of Advantage Compendium, then goes on to make his comments about this study and how they apply to annuity salespeople.  I personally think Jack is a genius and I hate to even consider adding value to his comments but I thought it might be helpful for the partners I work with to give some feedback based on my experience working with multi-million dollar annuity agents.

1. Possess Selling-Related Knowledge

Top Producers Waste Less Time with Bad Prospects

Jack Marrion says, “Knowing who is a receptive prospect was the most important factor in being a top producer. Top producers identified the prospects that were most likely to buy and ignored the rest. They didn’t waste time making presentations to prospects that don’t have the authority to buy.

This is so true!  I can’t tell you how many times I see agents milking the same dried up cow.  You can’t make grape juice out of raisins.  It’s simple, get more annuity leads and you won’t be desperate.  A good annuity marketing strategy allows you to chose your clients, not chase them.

“Top Producers are Knowledge-brokers that Have Know-Why, Know-Who, and Know-How”

Jack Marrion also says, “Top producers are perceived by prospects as knowledge-brokers in that they possess information that is unavailable to others—–due to connections, background, expertise–and they will use this information to benefit the prospect.

Study, study, study!  Chad and I spend a minimum of 5-8 hours per week reading and studying annuity product and financial information.  Google everything you don’t know about but should, bookmark your resources, and read, read, read.

2. Adapt

“Top Producers are Adaptive Sellers Who are in Tune with a Prospect’s Emotions”

According to Jack, “Top producers match the selling strategy to the needs of the prospect. They rank high on emotional intelligence. When top producers feel a fact-based presentation isn’t connecting with a prospect they will change to a story-based.

This is all about on-the-job training.  If I had a dollar for every time an agent asked me for a copy of our presentation like we had it on a flip chart.  Good salespeople are students of failure.  Why didn’t this work?  Why didn’t I connect with that client?  Why didn’t they understand?  Success is the return-on-investment for failure.  If you are reading this I probably don’t have to tell you that there is no opportunity to capitalize off of failure more than in the sales business.  Those who succeed are those who mitigate the chance of repeating their mistakes.  Be observant of what you do right and what you do wrong when you are selling.  Write down the good, bad, and ugly.  Repeat the good and remember the bad so you don’t repeat it.  There is no flip-chart for success in annuity sales.

3. Cope with Ambiguity

“Top Producers Cope Better with Uncertainty”

Jack says that, “The sales process is one of ongoing uncertainty and top producers face just as much uncertainty as everyone else. The difference is top producers have developed coping mechanisms that permit them to function is spite of the uncertainty.”

This is one that I personally struggle with, just ask Chad.  I am a total control and planning freak.  The reality is that nothing ever works just like you want it to.  You will never have your expectation met and every time something is going perfect all you have to do is wait a few minutes for it to change for the worse.  If you are like me, I have two suggestions.  First, get over it!  Except that your expectations will not be met and be happy if they are.  Salespeople are the worst on this issue; they cry for justice and fairness like children at times.  The best you can hope for is to work with people that have integrity and always make every effort to fix any problems that develop.  If there was one word to describe this business it would be “change”.  Second, go to Amazon and buy the book, “Who Moved My Cheese”.  Sometimes I am just flat out amazed at the temper tantrums some agent have over what turns out to be a vary small issue.  Don’t be one of those agents!  Learn to go with the flow and make adjustments without getting emotional about it.  Things that seem bad don’t always turn out to be bad and at the very least they are not usually as bad as they seem.  Focus on the solution, not the problem.

4. Have a Higher Cognitive Aptitude

“Top Producers are Smart”

Jack Marrion points out that , “Top producers have above average IQs. This does not mean that one needs to be Albert Einstein to be a $10-million annuity producer, but it does mean there are no dummies in the top ranks.

Not everyone can be a genius (I know I never will) but everyone has the choice to be smart (see the second part of #1).  Also, don’t just be smart, be wise!  Smart is the acquisition of knowledge; wisdom is knowing what to do with the knowledge.

5. Work Engagement

“Top Producers Work”

Jack concludes by saying, “Top producers are self-motivated and proactive. Because of their drive, top producers tend to be leaders in other areas of their lives as well.

I will put our calendars up against anybody’s.  If you are proud to show me your calendar then there is a pretty good chance you will become a top producer.  Also, Chad and I both have leadership roles in our business, but also in other organizaions like our churches.  Find a leadership position in some other facet of your life.  It will help prune your character and build your confidence.

Source: “Drivers of sales performance: a contemporary meta-analysis. Have salespeople become knowledge brokers?” Verbeke, Dietz & Verwaal. Journal of the Academy of Marketing Science, 39: 407-428; 2011.

Suitability: Replacing Variable Annuities with Fixed or Fixed Indexed Annuities

June 6th, 2011 by

See the article linked below and pay special attention to the text, “… those clients received $107,350.97 in bonuses and paid $122,630.24 in surrender penalties, according to the order.”Illinois Securities Regulators Treat Indexed Annuities as Securities

There are many components to the question of suitability but for this post we will limit our discussion to the issue of variable annuity replacement.  When it comes to replacing variable annuities, suitability must include the evaluation of surrender fees, death benefits, income benefits, and loss of liquidity (We will cover liquidity issues in another post).

Surrender Fees and Bonuses: Bonus Dollars Must Exceed Surrender Fees

Comparing surrender fees to bonuses is not a percentage vs. percentage comparison.  Just because a variable annuity has a 7% surrender fee and a fixed annuity has an 8% bonus, does not mean the replacement is suitable.  The reason you cannot make a percentage vs. percentage comparison is because the surrender fee on the variable annuity is based on the account value and the bonus for the fixed annuity is calculated off of the variable annuity surrender value (which will be lower than the account value).  You must compare the dollar amount of the surrender fee to the dollar amount of the bonus.  The easiest way to make this calculation is to compare the current account value of the variable annuity to the account value of the fixed annuity upon issue.  The account value of the fixed annuity must be greater than or equal to the account value on the variable annuity.

Death Benefits: Avoid Reducing the Benefit of Death

As a general rule you should avoid reducing your client’s death benefit when replacing a variable annuity.  This can be a real challenge during a period of market loss.  It is not uncommon for market losses and fees to erode the account value of a variable annuity, but due to contractual guarantees the death benefit may greater than or equal to the original premium and possibly much greater than the current account value.  Our primary demographic, the middle market, rarely buys a variable annuity for the death benefit.  Their primary concern is preservation of principle, growth, and guaranteed income.  That being said, just because the client doesn’t care about the death benefit that does not mean it can be ignored.  Review what other life insurance the client has, how significant the death benefit is that they are giving up, and what death benefits they need.  If necessary, offer the client the opportunity to purchase life insurance to replace what they are giving up.  If the client understands and desires to give up the death benefit associated with their variable annuity, then have the client sign a letter of explanation (see below).

Income Benefits: Avoid Reducing the Benefit of Lifetime Income

Just like death benefits on a variable annuity, living benefits can also maintain or increase in value even if the account value is going down.  Most fixed annuity lifetime income benefit riders require a one year deferral so an immediate comparison is impossible.  To make sure you are not decreasing your client’s lifetime income benefits, compare the lifetime income options on the fixed annuity based on the date the client will first become eligible to receive them.  Use the same date, if possible for the variable annuity. For the variable annuity you must look at the lifetime annuitization option (even if the client would not want to annuitize) as well as any income benefit rider options.  The lifetime income payout options on the fixed annuity should exceed the payout options that are available on the variable annuity.

Letter of Explanation:

The issue of suitability is not always black and white.  One complicating factor is that sometimes what the client wants would not be considered suitable by regulators or insurance carriers.  In the process of serving your client to meet their objectives you must also protect yourself and the insurance company you represent.  Client’s needs and wants change over time and what they say when they buy an annuity might not be what they say about the annuity replacement ten years from now.

In cases that are borderline, where the client is very motivated to get out of the variable annuity despite the loss of some benefits, (i.e. The death benefit on the variable annuity is higher than the death benefit on the fixed annuity) you need to get a letter of explanation.  A letter of explanation is a letter from the client agreeing and acknowledging what they are giving up.

For Example: Mr. and Mrs. Jones own a variable annuity with a $400,000 account value.  Their death benefit is $425,000 and there is no income rider.  They have $500,000 in life insurance and another $500,000 in other variable liquid investments. The surrender fee is $37,000 which means that the premium that would transfer to the fixed indexed annuity you are recommending is $363,000.  Your product has a 10% bonus and an income rider with an 8% roll up.  After applying the bonus the fixed indexed annuity account value would be $399,300 as would the death benefit.  In this case Mr. and Mrs. Jones account value would be $700 less then with their current variable annuity and they would also lose $25,700 in death benefit at the time of transfer.  Mr. and Mrs. Jones have expressed that their primary objective is preservation of principle and lifetime income after a 8 year deferral period.  You have helped Mr. and Mrs. Jones compare the two products and they have determined that the fixed indexed annuity will better suit their future need for guaranteed lifetime income.

The letter of explanation would read something like this:

To ______________ (name of FIA carrier and agent):

I, Mr. and Mrs. Jones, do hereby acknowledge and are fully aware that by purchasing the ______________ (name of the FIA annuity contract) we will be losing $700 in account value and $25,700 in death benefit at the time the ______________ (name of FIA annuity contract) is issued.  It is our desire to forego these benefits in our _______________ (name of VA annuity contract) so that we will receive income rider benefits under our contract with __________________ (name of FIA annuity contract) as outlined in the __________________ (name of the FIA annuity contract brochure and disclosure).  Our primary concern is preservation of principle and guaranteed growth for the purpose of a lifetime of income.  It is our assessment that the death benefit of the ________________ (name of FIA contract), our life insurance, and our other assets is and will be adequate for us and our beneficiaries.

We have read all product brochures and disclosures pertaining to ______________ (name of FIA annuity contract) fully understand their content.  Based on the contract benefits mentioned in the _________________ (name of FIA annuity contract brochure and disclosure) we have decided that it is in our best interest to purchase the __________________ (name of FIA annuity) with funds surrendered from _____________________ (name of VA annuity contract).


Name of clients



The Definition of Selling Annuities: Eliminating Questions

June 2nd, 2011 by

How would you define the process of selling annuities?

One of the ways I define it isas, The process of eliminating question marks.”

Are you credible?  Yes, I work in association with and I am the host of Safe Money Radio in Denver, Colorado? (Use whatever credibility you have as long as it is legitimate.  No fake designations.)

Do you have a website?  Yes, it’s *** (Electronic Response Marketing System) and as my client I will give you privileged access to information that will enhanced our relationship and your retirement planning.  What is your email address so I can service you

Is my money safe?  Yes, my business and my relationship with you is committed to three core values.  I will provide you one or all of the following depending on your financial goals; protection of principle, guaranteed growth, and/or a lifetime of income you can never outlive.  Your money will never be at risk to market losses if you are my client!

Can I trust you? Can you help me understand this? How is what you are offering better than what I have been presented or understand? How does this benefit me? Etc., etc., etc.

What happens when you don’t answer all the questions?  You don’t make a sale, or if you do make a sale it’s on shaky ground.

As an annuity salesperson you should look at your business, your marketing, and your presentation and ask yourself, “Is what I am doing answering all of the questions for my prospects so they can become my clients?”

Eliminate question marks and you will have success in your annuity business and very happy clients.

Annuity Sales Training: Sell Guarantees

May 19th, 2011 by

Indexed annuity cap rates are dropping like rocks.  Most notably, North American has seen major cap reductions on their Charter Series and other products.

Do cap rates matter to indexed annuity sales?  Some agents seem to have a hard time selling indexed annuities if cap rates are “low” (See article linked below).

Marrion: Low Caps Hurting Indexed Annuity Sales

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.

Annuity Sales Tip: In-Service Withdrawal Assumptive Close

April 8th, 2011 by

It’s time for annuity appointment booking calls again to fill the calendar for next week.Are you being aggressive enough?  Are you selling an idea or a product?I just listened to Chad call one of his Safe Money Radio annuity leads and here is how it went.  This was second time Chad called this guy.  He had an appointment with him before but the appointment was cancelled.  Chad was calling back to see if he was still interested in meeting.

The client did not want to meet because all of his money is in his 401K with IBM and he does not plan on retiring until July of this year.

Chad said, “Would you like to take advantage of in-service-withdrawal.” 

Client,  “What’s that?” 

Chad, “Do you want to protect your 401K now?

Client, “Yes, but I can’t take my money out of my 401K until I retire.”

Chad, “Who administers your 401K plan?”

Client, “Fidelity”. (Chad Googles “Fidelity 401K customer service number”)

Chad, “Let’s call Fidelity and double check.  Hold on while I get them on the phone.” (Client was not asked if he wanted to call Fidelity.  Key point here. Be assumptive!)

While the phone is ringing he tells the client to identify himself when they answer and then give permission for him to ask some questions.

Fidelity answers and client does as Chad instructed.  Chad verifies that the client has $236K in 401k and that the client is eligible for a 100% in-service withdrawal.

After disconnecting from Fidelity Chad asks, “So, looks like we can go ahead and protect your retirement.  I am going to be in your area on Tuesday.  Does afternoon or evening work best for you?”

The appointment was booked.

Now pay attention to this!!!  No product has been discussed or explained.  Has the client bought anything yet?

Technically no.  We still have to do a fact finder and show the client how his retirement would benefits from our product but the client has bought into the idea of protecting his retirement.

Sell the idea, not the product!!!

Annuity Sales Objection Handling: I’m Not Your Plumber

March 25th, 2011 by

It helps to be quick on the draw.  Bret Roby and Chad Owen are making calls right now at my office to book annuity appointments.Bret just called one of his Safe Money Radio leads and the wife answered.  Bret asked for the husband who had called his radio show.  The wife turning away from the phone yelled out to her husband that someone was calling for him.  He asked who it was and she said, “I think it’s your plumber”.

When Bud answered Bret said, ” Bud, I am not your plumber but I can get you out of a lot of deep crap“.

He booked the appointment.

Way to go Bret!

Don’t forget to have fun in this business my friends.