1. Positioning
Fixed Index
Annuities

2. Common Objections Not enough education – products are complicated
Variable annuities/other investment options provide
more earnings potential
Uncertain as to where they fit
Low rates/limited upside
5. Market is going strong

3. Common Objections
Not Enough Education –
Products are Complicated

4. Crediting Interest Understanding the Cap Start End 5% Cap
Account Value
1500
1740 = 16% Increase
5% Growth
$105,000

5. Index Annuity Locking in Interest Start End 5% Cap Account Value 1500
1740 = 16% Increase
5% Growth
$105,000
Start
End
5% Cap
Account Value
1740
1513 = 13% Loss
0% Growth
$105,000

6. Annual Reset Resets Index Price Each Year Start End 5% Cap
Account Value
1500
1740 = 16% Increase
5% Growth
$105,000
Start
End
5% Cap
Account Value
1740
1513 = 13% Loss
0% Growth
$105,000
Start
End
5% Cap
Account Value
1513
1650 = 9% Increase
5% Growth
$110,250

7. Common Objections
Variable Annuities/Other Investment Options Provide More Earnings Potential

8. Positioning FIAs in Client Portfolios
Variable Annuities/Other Investments vs. Index Annuities
Perception:
Variable annuities provide much more upside potential than Index annuities while providing safety through withdrawal benefits
Comparing 3 Parts:
Growth: how interest is earned
Safety: what methods are used in protecting assets
Income: withdrawal benefits

9. Positioning FIAs in Client Portfolios
Upside Potential: $100,000 Premium
Variable Annuity
S&P 500 = 16% increase
Subtract Fee = 3%
Hypothetical Value $113,000
Index Annuity
S&P 500 = 16% increase
Limited by Cap = 5%
Hypothetical Value $105,000 (Value “Locked-In”)

10. Positioning FIAs in Client Portfolios
Safety: Principal Protection $100,000 Premium
Variable Annuity
S&P 500 = 13% decrease
Subtract Fee = 3%
Hypothetical Value $84,000
Index Annuity
S&P 500 = 13% decrease
No Fee = 0%
Hypothetical Value $100,000

11. Positioning FIAs in Client Portfolios
Safety: Withdrawal Benefits $100,000
Variable Annuity
S&P 500 = 13% decrease
Subtract Fee = 3%
Hypothetical Value $84,000
Index Annuity
S&P 500 = 13% decrease
No Fee = 0%
Hypothetical Value $100,000
Safe = $5,000/Yr. as Income
Safe = $100,000

12. Positioning FIAs in Client Portfolios
Safety: Withdrawal Benefits
Withdrawal benefits do not protect principal
May provide an income that the client does not need or may not desire
Step-ups are often confused with growth
Potential portability issue (partial w/d or transfers): rates up, market down

13. Common Objections
Uncertain as to Where They Fit

14. Positioning FIAs in Client Portfolios
Growth
Savings

15. Positioning FIAs in Client Portfolios
Investment Options
Variable annuities
Mutual funds
Bonds
REITS
Stocks
Alternative investments
GROWTH
Growth
SAVINGS
Savings

16. Positioning FIAs in Client Portfolios
Savings Options
Savings accounts
Money markets
CDs
Fixed annuities
Index annuities
Growth
Savings

17. Positioning FIAs in Client Portfolios
Income Vehicles
Variable annuity
Index annuity
SPIA
REITS
Bonds
Portfolio withdrawal
Income
Growth
Savings

18. Positioning FIAs in Client Portfolios
Income: Comparing Withdrawal Benefits
Index annuities provide higher guaranteed income
Very similar in design
Both provide guaranteed income
Variable annuity provides for step ups
No guaranteed growth

19. Positioning FIAs in Client Portfolios
Index annuities may fit when the goal is to:
Protect principal from loss
Lock in market performance
Provide higher earning potential
than other savings vehicles
Growth
Savings

20. Positioning FIAs in Client Portfolios
Index annuities may fit when the goal is to:
Protect principal from loss
Lock in market performance
Provide higher earning potential
than other savings vehicles
Provides high guaranteed income strategy
Income
Growth
Savings

21. Common Objections Low rates/limited upside
Competes well with other savings vehicles:
Best local 5 year CD: 0.75%
Goal is not to lose
Market is going strong
Great opportunity for financial health
discussion correction protection
Market is going strong: Segway to Financial Check-Up

23. * The product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of
investing the in the product. The S&P500 Index does not reflect dividends paid on the underlying stock.
** Surrender charges may apply for early withdrawal.

24. Common Objections Products are complicated – keep it simple
Variable annuities/other investment options provide more
earnings potential – yes they do
3. Uncertain as to where it fits – safe money alternative
4. Low rates/limited upside – compared to what?
5. Market is going strong – great time to talk