How Well Do You Know Your Products?
I spoke yesterday with an agent who had just made a substantial annuity sale. I asked him which product he sold. I then asked him how he disclosed the fact that this Fixed Indexed Annuity product is designed primarily for income, the index growth only applies to the annuitization value, not the accumulation value, and that the cash surrender value of this product after 10 years would probably be less than the original premium. He was shocked, and couldn’t believe his ears. He said that this particular product is one of the most heavily promoted and highest sold in the industry. Among other things, I told him to read the fine print in the six page disclosure.
I believe that there is a relationship between the number of complaints a company has, and the quality of the agent training, disclosures, and illustrations a company produces. Do you agree? Jack Marrion’s Index Annuity website just released a list of companies that sell Indexed Annuities and listed them in order of the least number of complaints to the highest: 2007 Index Annuity Complaints
The company with the highest number of complains receives 20 times the number as the company with the lowest. Comment if you believe there is a correlation between the number of complaints and the quality of training, products, disclosures, calculators, illustrations, and other agent’s services that a company provides. Do the companies listed provide a calculator that discloses the guaranteed minimum surrender value, for example? I know, for example, that the company listed at the top, Great American Financial Resources, provides an Indexed Annuity Illustration system that discloses everything – formulas, surrender values, guaranteed minimum surrender values, cost of income riders, hypothetical values both current and guaranteed.
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