From the course: The ABCs of the Banking and Insurance Business: AML, KYC, the NAIC, IFRS, and More
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Selling annuities
From the course: The ABCs of the Banking and Insurance Business: AML, KYC, the NAIC, IFRS, and More
Selling annuities
- [Narrator] Annuities are a key product in the insurance industry, providing individuals with a way to secure income during retirement. However, selling annuities requires a deep understanding of the product, its benefits, and its risks to ensure it aligns with the customer's needs. Now, annuities come in several forms, each with unique features. The three main types are fixed annuities, variable annuities, and indexed annuities. Fixed annuities offer a guaranteed interest rate and predictable payouts, making them ideal for risk-averse clients. Variable annuities provide payouts linked to investment performance, offering higher potential returns but also greater risk. In a way, then we can think about fixed annuities as being comparable to a bond, safer, more consistent payouts, but lower overall returns, where variable returns are analogous to stocks, higher overall average returns, but inconsistency in those returns over time. Third, we have indexed annuities. These are tied to the…
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