1. What is the growth opportunity for my client?
RILAs typically offer capped indexed interest credit methods, some advertising cap rates – an interest rate that limits the growth of an indexed annuity – of 200% or more. It might sound awesome, but the best value for your customer doesn’t always come in the highest rate. When comparing rates, it is important to consider the potential of the accounting method as a whole.
For example, some RILAs offer participation rate methods alongside capped options. While a cap rate allows 100% participation in positive index returns up to the cap, a participation rate – sometimes greater than 100% – works as a multiplier on any increase in the index.
2. Does the product offer flexible features and benefits?
Life can be unexpected. Just as your clients’ financial goals can change over time, so can their tolerance for risk. With so many RILA options available, it is important to offer a product that is flexible enough to adapt to changing needs. Here are some things to look for:
- Diversified index options: Indices that behave differently in a variety of market environments allow clients to diversify for the highest potential return.
- A choice of protection levels: Different ways to help balance risk and reward.
- Several mandate periods: Both short and long term credit strategies offer unique advantages.
- Liquidity characteristics: Free withdrawals, a death benefit, and confinement and terminal illness exemptions add flexibility to an RILA.
3. What sets RILAs apart?
Although RILA products have similar designs, some offer features to help maximize return potential. Personalized interest credit methods are a prime example. They are designed to adapt to economic conditions, relieving customers of the burden of trying to time the market.
4. Is the company a quality transporter?
The strength and stability of a support is essential when selecting a product, especially one designed for long term savings. Look for a highly rated carrier with a solid business model, sufficient capital, and experienced leadership. The carrier you decide to work with must be able to meet the challenges of today’s market, give your customers confidence and help you grow your business.
5. Will the company provide the necessary support throughout the sales process?
The relationship between carrier, financial professional and customer is a long-term commitment. The carrier you work with must be able to accompany you before, during and after the sale. This support includes, but is not limited to:
- Before the sale: Product training, education and forward thinking thought leadership.
- During the sale: Dedicated sales support, implementation of new business processes and well-designed supports.
- After the sale: Exceptional customer service, a fast commission process and strong claims adjudication capabilities.
As with all investment vehicles, it is important to define with your client their financial goals and risk tolerance before making a decision. Before offering an RILA to your customer, be sure to select a carrier and a product that ticks all of the boxes. This could set them apart and help them retire successfully.
Rod Mims is Senior Vice President, Distribution, at Athens United States.