Annuities:
Your Must-See Sales Opportunity
High interest rates, high consumer demand: MYGAs are more popular than ever
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Annuity sales are at
an all-time high -
don’t miss out!
2023 was a record-setting year. In the first half alone, annuity sales totaled $181.1 billion, up 27% over the first half of 2022. (Source: LIMRA) And those 2022 sales were already 30% higher than pre-pandemic sales figures. (Source: III)
What’s driving this increase?
High interest rates. Multi-year guaranteed annuities (MYGAs) offer clients higher rates and better returns than CDs and savings accounts. Your clients don’t have to settle for the pitiful interest rates offered by big banks on their savings accounts – currently stuck at about 0.01%. MYGAs are beating CDs, too, with up to 1% more interest. We’re seeing rates at and above 6% for 3 - 10-year MYGAs.
How good are current MYGA rates?
Let’s compare MYGAs to CDs and savings accounts – the numbers speak for themselves.
| Savings Account | CD | Annuities |
|---|---|---|
| Bank of America: 0.01% | Bank of America, 1 yr.: 0.03% | Americo Platinum Assure, 4 yr: 5.35% |
| US Bank: 0.01% | US Bank, 9 mos.: 4.90% | Americo Platinum Assure, 5 yr: 5.45% |
| Chase: 0.01% | Chase, 1 yr.: 0.01% | American National Palladium MYG 5, 5 yrs, 5.45% |
| SoFi: 4.60% | Barclays, 1 yr.: 5.30% | American Equity GuaranteeShield, 5 yrs: 5.45% |
| CIT Bank: 5.05% | BMO Alto, 1 yr.: 5.30% | Protective Life Balance, 5 yrs, $10k+: 6.45% |
| Jenius Bank: 5.10% | Marcus: 14 mos.: 5.40% | Protective Life Balance, 5 yrs, $100k+: 6.96% |
Don't forget - a CD's interest rate resets after ONE YEAR.
A MYGA will lock in that rate for up to 10 years.
Ask your client: which of these will help you reach your retirement savings goals faster? Which will help you better offset inflation? The answer is clear.
Keep in mind that even if your clients like the look of those 5% CDs, the length of time they're guaranteed that rate isn't very long: up to one year, max. With a MYGA, that rate is locked in for years, giving them peace of mind and a sense of stability.
Rates change daily, so the time to act is now! Ask your clients if their money is working hard enough for them – and if not, tell them you have a solution.
Benefits of a MYGA
If your clients know what an annuity is, they probably think it's a way to create an income stream during retirement. But MYGAs are different because their best features provide benefits before retirement. Think of a MYGA as a CD with better liquidity and better returns.
Guaranteed interest rate
That rate is locked in for the full length of the term. To get the most bang for your client’s buck, compare rates over different spans of time. The longest terms aren’t always the ones with the best rates. CDs, by comparison, only guarantee their highest rates for months, not years.
Tax-deferred growth
Your client’s cash compounds every year, growing on a tax-deferred basis. There is zero income tax obligation until they begin taking withdrawals. And, if they purchased with after-tax dollars, they’ll only owe tax on the annuity’s gains. Compare that to a CD, where interest earnings are taxed annually.
Choice of term lengths
With term lengths including 3, 5, 7, and 10 years, there are options to meet every client’s need. With rates as high as they currently are, it’s a good idea to ask your clients: do you think rates are likely to be lower or higher in the future?
Death benefit
MYGAs have a built-in legacy. If your client passes away during their term, their beneficiary(ies) will get the policy value – the amount paid in, plus interest earned – as a death benefit. Depending on the carrier, if they named their spouse as the beneficiary, their spouse could also elect to continue the policy.
Partial liquidity
Most MYGAs allow some liquidity – your client doesn’t have to worry about that money being locked up and untouchable for years on end. In most cases, within a year, they can expect to be able to withdraw up to 10% of the total amount. Alternatively, some carriers will offer an interest-only withdrawal option.
Rollover & renewal options
Once the annuity term is over, what’s next? Your client can renew their contract with the insurer's current rates. Or they can pull out all the money to use for other things. Or they can roll their money right into a different annuity with a better interest rate, using a 1035 exchange.
10-day free look
Most carriers offer 10 days or more for your client to preview a MYGA, with a full refund if they’re not satisfied. They have nothing to lose, and so much to gain, including a great combination of peace of mind and guaranteed returns.
With more benefits than a CD, MYGAs are a great fit for clients nearing retirement. Help them make the most of their money – and boost your revenue at the same time!
Sales strategy: laddering MYGAs
A laddered strategy can offer additional peace of mind for your client.
If they don’t want to be locked into anything for a full 10 years, they don’t have to be. You can use different amounts in different MYGAs to create a combination of yield and liquidity on a scheduled basis. It’s easy to plan for and easy for clients to understand!
Scheduled liquidity
For clients who want more access to their cash, you can split up the amount they have to spend. Put one portion in a 3-year MYGA. After one year, they can access 10%, and just two years later, that whole amount becomes liquid again. Additional portions could go into 5, 7, or 10-year MYGAs to prolong the guaranteed interest rate, while protecting and increasing liquidity.
Wait out market turbulence
If your client wants to wait out a turbulent market, it’s possible with a 3-year MYGA. They know their cash will be liquid again at a definite end point, with zero investment losses and a 5% - 6% rate of return in the meantime. In a world where global events shake the market every few months, this is a smart strategy to safeguard and grow their cash.
Guaranteed returns
When you combine scheduled liquidity and a strong hedge on a volatile market with the guaranteed interest rates we’re seeing now, it’s a win/win/win for your client. If they were planning to sit out the market already by leaving cash in a savings account or CD, they’re just following the same strategy but with a much stronger return.
Ideal client profile
Which clients should you ask about MYGAs? Look for the following:
MYGAs give your client the opportunity to place a safe bet. This product offers a guaranteed rate of return, strong death benefit, some liquidity, and the potential to continue growth via a rollover. They can also move to an income-based product if they're ready to retire. The options are endless – and most clients don’t even know they exist.
BONUS: If you use Insureio, our CRM of choice, and subscribe to the marketing package, you can use our pre-written MYGA campaign with your clients! The campaign includes emails with corresponding landing pages on your InsuranceDivision website where clients can learn more, request a quote, or schedule a call with you to ask questions.
Start Selling NowDon’t miss this opportunity!
Even if you’ve never sold annuities before, now is the time to start. You might be wondering: Why now? Why is this market so full of untapped potential?
Annuities – and specifically, MYGAs – are a big part of the solution to each of these problems.
MYGAs are straightforward – easy to understand, easy to present, easy to sell. Many of your clients have never heard of them before. They never knew they could park their cash in anything other than a CD or savings account, let alone earn more interest.
This market is full of untapped potential – but you have to start now. Interest rates won’t stay this high forever.
Just last year, we saw rates in the 2% - 3% range. Now, they’re 5% and up – but there’s no way to know how long that will last. The sooner you act, the sooner your clients get these guaranteed rates!
Get Started NowCase study: MYGAs make a difference
How did a P&C agent with no experience in annuities add MYGAs to his business? It’s as easy as 1-2-3.
Step 1
The agent looked for the weekly rates our brokerage manager sends out via email.
Step 2
The agent posted those rates in his office.
Step 3
The agent asked his clients where their life insurance was – and what they were doing with their money.
The sales he's generated from these three simple steps have added a wealth of revenue to his agency, In fact, many clients took the initiative and asked him about the rates they saw posted in his office. He’s only working with MYGAs at the moment, to keep things simple. All he did was start asking one simple question: where is your life insurance? His success is proof that it’s easier to diversify than you might think.
Are you missing out on an easy source of added revenue? Now is the perfect time to advertise rates – post them in your office, add them to a slide in a presentation, mention them on a call, or add them to your newsletter. We’re here to help with every question you have along the way.
Your secret sales weapon?
Our amazing staff.
If you’ve never sold annuities before, we’ve got your back.
Our brokerage managers are here to help you succeed. Need rates, quotes, or information about a carrier? Not sure how to submit a client’s application? We’re on it. Your success is our success, and we’re just a phone call or email away anytime you need us.
Plus, as a contracted agent with Pinney, our team works on your behalf for zero cost. Let us handle the back-office tasks so you can get back to selling!
- 5 Application Specialists, plus a team lead and manager
- 5 Case Managers
- 1 full-time Underwriter
- 1 on-staff Medical Doctor
- 3 Policy Delivery Specialists
Never worked with us before? We’d love to have you on the team!