Most life and health agents leave serious money on the table by never learning annuities. Your final expense and Medicare clients often have retirement savings sitting in low-interest accounts — and annuities are how you help them protect it while earning some of the best commissions in the business. Here's the primer.
What an annuity actually is
An annuity is a contract with an insurance carrier: the client puts in a lump sum (or series of payments), and the carrier guarantees growth and/or a stream of income — often for life. For retirees worried about outliving their savings or losing principal in the market, annuities solve a real fear: running out of money.
The main types
- Fixed annuity: a guaranteed interest rate for a set term. Simple, safe, CD-like.
- Fixed indexed annuity (FIA): growth tied to a market index with a floor of zero — the client shares in gains but can't lose principal to market drops. The workhorse product for most agents.
- Multi-year guaranteed annuity (MYGA): a fixed rate locked for several years — easy to explain, great for CD shoppers.
- Immediate annuity (SPIA): converts a lump sum into guaranteed income starting now.
Most agents start with MYGAs and FIAs — easy to understand and easy for clients to say yes to.
Who they're for
Your existing book, mostly. The retiree buying final expense from you may have $80k in a savings account earning nothing, terrified of the next market drop. An MYGA or FIA gives them a guaranteed rate with principal protection. You're not prospecting cold — you're serving clients you already have.
Licensing and getting appointed
You need a life insurance license (which most life/health agents already hold). For indexed and variable products there may be additional requirements (some states require annuity suitability/best-interest training and, for variable annuities, a securities license). Then you contract with annuity carriers through your FMO/IMO — the same way you contract for life.
Why the commissions are worth it
Annuity commissions are typically paid as a percentage of the premium deposited — and premiums are large (tens of thousands of dollars). A single annuity case can pay more than a month of final expense. Add a few annuity sales a year to a health/life book and your income changes meaningfully.
The takeaway
Annuities let you serve your existing retirees better and earn premium commissions doing it. Learn MYGAs and FIAs first, complete any required suitability training, get contracted through your upline, and start asking your senior clients one simple question: "Is any of your savings just sitting in the bank?"
Want to add annuities with carrier contracting and training handled for you? Apply to Bridgepoint. Building a broader book? Read how to build an insurance agency.