The ABC’s of Annuity Investing




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Course Overview

  The ABC’s of Annuities provides detailed information on the various annuity products available.  The final chapter covers the NAIC Annuity Suitability requirement.  There is also a chapter on ethics.


  Each annuity type fits in some situations but is not suitable in others.  The goal of the agent is to fully understand where his or her product is suitable so that he or she may offer consumers the types of products that will further their retirement or other financial goals.  Only by becoming educated in all annuity types will the agent be able to do this.


  An element of annuity education is learning how to determine whether or not a specific annuity product will benefit the buying consumer.  Even well-intentioned agents cannot properly recommend a product if he or she does not understand how to determine annuity suitability.  This course provides the tools to determine product suitability.

Course Schedule




Chapter 1

Retirement’s Surprise

The introduction to the course looks at facts, figures and the reality of retiring.

Chapter 2

Annuity Types

Once the need to do something positive for our retirements is clear in today’s world with today’s current problems, chapter 2 looks at the types of annuity products. Agents are aware of traditional fixed-rate products but today there are other annuity options that may be suitable for many retirees or soon to be retirees. We look at annuity use for structured settlements (something few agents are familiar with), why annuities are used in this way, and potential risks involved. While annuities are not typically underwritten, that is not necessarily always the case. Enhanced annuities may consider underwriting.

Chapter 3

Fixed Rate Annuities

 It is necessary to cover fixed-rate products first and then move on to other types. Without this foundation, it would be difficult to make the points we need to about newer types and newer uses of annuities.

Chapter 4

Equity Indexed Annuities (EIA)

This chapter begins the process of looking at other types of products, where they fit, where they should not be used, and where suitability fits in. First, we look at equity indexed annuities. While they are a fixed-rate product, their performance is not like traditional products.

Chapter 5

Variable Annuities

Reviews variable annuities, and the role buyers may wish to take. A new element is examined: company variable annuity buyback offers. Buy-backs can happen with any product but is very unlikely to happen with just any product. There is a reason an insurer would offer to buy back a product and consumers will expect their agents to have enough facts to adequately explain why it happens. The ultimate question consumers have, of course, is whether they should accept the offers. Agents must understand that insurers only buy back products when they provided a more generous payout or options than insurers now want to offer. Other elements that agents may not yet have experienced are also covered.

Chapter 6

Annuity Riders

Looks at annuity riders, where they work, where they don’t, and what costs may potentially be. Long-term care riders might be the best known, but they are not the only riders sold. This chapter covers LTC riders, of course, but it also covers the lesser-known types.

Chapter 7

Annuitization Options

It is very important because it covers annuitization options. Too many agents still do not understand that life-time options make the insurer the beneficiary, instead of the heirs. This is carefully and fully covered since an error here can have results no agent intends.

Chapter 8

Life Insurance

This chapter looks at life insurance products. While this course is not on life insurance, we believe it must be included since annuities have a relationship with them.

Chapter 9

Insurance Ethics

This ethics chapter is specific to the insurance industry. The intention is to take away all the “I didn’t know” excuses we hear from agents. The chapter looks at the Doctrine of Utmost Good Faith. It looks at breaches of the principles expressed in that. The chapter briefly looks at guaranty associations but that is not the primary area of coverage. The chapter discusses knowledge of products, the ones agents sell and the ones they may come in contact with. We discuss setting ethical goals along with production goals, since both must combine to achieve the level of expertise states desire of their agents. We discuss the various guidelines companies are likely to set down for their employees, but also the guidelines independent agents must set for themselves. This is especially necessary in competitive markets when it is easy to go for the commission instead of product suitability. Finally, we discuss due diligence. While it might apply to many professions, as it applies to insurance it is vital.

Chapter 10

NAIC Suitability

The course chapter discusses product suitability. Although we have elements of suitability through the entire course, this chapter is specifically on the topic. This chapter is standard in that it covers the suitability requirements set down for annuities and required of annuity sellers. It covers suitability criteria, time horizons, and all the elements suitability entails.

Additional Information

This course is approved for the annuity suitability requirement in some states.