I.I.I. Offers Tips on Choosing an Annuities Sales Agent

Due Diligence Should Include Reviewing Agent’s Credentials, Life Insurer’s Financial Health

New York Press Office: (212) 346-5500; media@iii.org
Washington Press Office: (202) 833-1580

NEW YORK, September 8, 2009

Annuities should be an essential component of a consumer’s long-term financial planning portfolio but they must be purchased from reputable professionals who represent financially-strong life insurers, according to the Insurance Information Institute (I.I.I.)

“Ask your friends, relatives and business associates for the names of insurance agents that have an excellent reputation. While you’re at it, find out which life insurance carriers they represent, too,” said Dr. Steven Weisbart, senior vice president, chief economist and I.I.I.’s expert on life insurance and annuities. 

Annuities, an agreement for one person or organization to pay another a series of payments, are aimed at enhancing a retiree’s financial security.  They can be purchased through insurance agents, financial planners, banks and life insurance carriers.  Life insurers are the only entities which issue annuities policies.

About 95 percent of these products are sold as deferred annuities, which are generally designed to collect premiums and accrue investment income over an extended period for payout at a later time, usually when the annuity owner retires.

“If you decide to use an insurance agent, find one who is knowledgeable about annuities and has a reputation for excellent customer service,” Weisbart added.  “The agent should be able to advise you and answer all your questions. If you are thinking about buying a variable annuity, the agent should also have a license to sell variable annuity products. Since variable annuities are considered securities, you should receive a prospectus describing the investment alternatives available to you.”

Before determining whether an agent is right for you, assess whether they:

  • Devote the time needed to understand and serve your annuity needs.
  • Demonstrate clear knowledge about the various types of annuities that are available and can plainly explain your choices.
  • Are licensed by your state insurance department.

Continue to research agents until you have found someone who can help you meet your financial goals and needs.

There are hundreds of insurers and many different types of annuities products available to you. Before buying an annuity, also consult your state insurance department Web site to see whether they offer an online annuity buyers guide for your state.

There are four important things to consider when assessing a life insurance company:

  1. Financial Solidity
    Select a company that is likely to be financially sound for many years, by using ratings from independent rating agencies.
  2. State Insurance Department License
    Make sure that the insurer you select is licensed to issue annuities in your state. Ask whether the specific type of annuity you are considering is available in your state.
  3. Service
    Expect excellent customer service. Your prospective insurance agent or insurance company representative should answer your questions promptly and provide useful information that addresses your concerns. This way, you can make a well-informed decision on the annuity that best meets your needs and objectives.
  4. Choice of investments and riders
    Some insurers offer annuities with an array of investment choices and a large variety of riders. Compare these options. Some options may increase the price of the annuity. Decide on an annuity that best meets your needs.


The I.I.I. is a nonprofit, communications organization supported by the insurance industry.


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