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Overcoming Objections by Suze Orman on Annuities

Published on February 4, 2009 in retirement income by Bob Richards

If you don’t already know who Suze Orman is, it’s time to find out, since hundreds of thousands of people tune into her weekly show on CNN for brutally honest advice on their financial situations. Orman is well known for her tough, but realistic advice on everything from home ownership to debt consolidation, and she’s especially popular among women viewers. Perhaps one of her most well-known viewpoints is her aversion to annuities – something you may need to overcoming objections if your prospect is familiar with her show.

But why does Orman dislike annuities? For the most part, her position stems from the commissions that brokers receive for selling annuities – which, in her opinion, makes them somehow less honest than other investment vehicles. However, the truth is that annuities really do make sense in some situations, so the key to overcoming objections from Orman is to help your prospect realize that he or she falls into one of these categories. Let’s look at some of the scenarios where annuities are a good choice:

· If your income is high and you’ve maxed out your 401K or IRA contributions, annuities may be a good choice.

Realistically, if your prospect is at this income level, he or she probably isn’t too concerned about paying commission fees to secure the additional tax-deferred benefits of an annuity. Despite Orman’s objections, annuities can play an important role in reducing income tax liability, just like home ownership or other retirement accounts. There are fees associated with each of these investment vehicles, but in many cases, the costs are largely outweighed by the tax savings they provide.

· If you prefer a hands-off approach to your finances, paying a broker a commission in exchange for advice on the best annuity for you can be worth the fees.

Many consumers are totally overwhelmed by the thought of choosing from the many investment vehicles and annuity options out there. In this case, you’re trying to persuade the customer that the trade-off for broker fees is a reduction in the amount of time that needs to be spent managing financial accounts. Financial advisors across the board charge for their services – if the annuities you sell your client meet their financial needs, you have every right to be compensated for your services.

· If you need to have a guaranteed return on your money, or if you anticipate needing to withdraw your money early or take out some as a loan, annuities offer better returns and more flexible terms than other investment options.

If you’re dealing with a prospect who wants to invest for the future, but is uncomfortable with the thought of that money being tied up until a certain age – as with 401Ks and IRAs – certain annuities offer shorter surrender periods that can be very appealing. Alternatively, if you have a client who’s wary about investing in this economy, or who has lost significant money in the stock market, they may appreciate the security of investing in annuities. At the end of the day, it’s up to you to prove to your prospects that annuities are the best investment options for their needs, regardless of what any talking heads in the financial industry say. If you can do this well and master overcoming objections, you’re on your way to success in the annuity business.

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4 thoughts on “Overcoming Objections by Suze Orman on Annuities

  1. Slimquick - reviews says:

    Very good. I myself am one of those guys who don;t know very much about annuities, now i am bit more enlightened.! Thx!

  2. Maria says:

    Glad that I have a background with regards to annuities so I can actually relate to the topic. Investment is a wise way of saving your money cause you can get benefit from it. It's very much different when you'll just deposit your money in a savings account.

  3. Dave says:

    Nice post, I agree there are times that annuities work, it just depends on the persons situation.

  4. Annuity Lump Sum Payment says:

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