The Obamacare rollout has been a debacle to say the least. However, some of the ways the Affordable Care Act was sold to the American public is disturbingly similar to how too many annuities are presented today. Let’s take a look at those similarities, and why the annuity industry should be aware of these current sales issues and try to correct and eliminate these ongoing sales presentation mistakes.
It sounds too good to be true...because it is?
President Obama arrogantly promised over and over, “If you like your current plan, you can keep your current plan” and “if you like your doctor, you can keep your doctor.” Every salesperson on the planet knows in retrospect that he was just saying whatever it took to close the sale. It’s impossible to imagine that he did not know what he was proclaiming was untrue. The bottom line is that he needed to get elected, and he needed to save his signature piece of legislation. He obviously made the decision that he was going to say whatever he needed to say to get this done, and deal with the consequences later.
Too many annuity presentations fall into this sales “dark side” where the ends justify the means. I know this is true because I receive hundreds of calls on a monthly basis where the person who now owns an annuity was sold (and bought) a bill of goods and are now having to deal with the contractual realities. These people are calling me to see if I will tell them that they actually did buy a too-good-to-be true product. Unfortunately, I end up educating them on the reality of what they really own.
You have to buy the annuity to find out what’s in it
On March 9, 2010, Nancy Pelosi ridiculously said “We have to pass the bill so that you can find out what is in it.” This could be one of the most brainless statements in political history, but eerily similar to many annuity buyers who fall for a bullet-point presentation without knowing the true details of an annuity contract.
Variable and indexed annuities are complicated strategies that cannot be sold in a bullet-point fashion. Kudos to the annuity industry for implementing a universal “free look” policy that allows people to review the contract in full before fully accepting the terms. It’s too bad that we all don’t have the same option with Obamacare! With that being said, it is important for agents to explain the good, the bad, and all of the limitations and details about complicated annuity products to every single potential buyer.
This annuity plan is good for everyone
Obamacare was pitched to the American voters as something that was good for everyone...period. The majority of rational people know that this is not true, and the same can be said for annuities. Annuities are not for everyone.
The annuity industry is witness to its own version of a universal health-care-type message with the “hybrid” (aka: hype-brid) nonsense that too many agents are using to push people over the sales finish line. Somehow the word hybrid is now being used to convince the annuity buying public that the policy they are being pitched will adapt to every single need or whim that arises. For those of you convinced that hybrid is the word of the day, let me semantically destroy that myopic line of thinking. Every single annuity on the planet offers multiple benefits, so in essence every annuity can be classified as a hybrid. Enough said, and please stop this industry-demeaning insanity by using the word hybrid.
This annuity will cover all of your needs
We are now finding out that everyone under Obamacare will have “minimum” standards included in every plan. That means older people will have to have and pay for something as useless as maternity care. Old people don’t need maternity care, and many annuity buyers don’t need a policy packed full of benefits that they will probably never use but have to pay an annual fee for the life of the contract.
Loading up deferred annuities with as many riders as possible is the equivalent of the “minimum standards” that the Obamacare “know-it-alls” have decided the public needs. Annuity riders work to solve specific issues like income for life, death benefit or limited confinement care coverage, but that doesn’t mean that every annuity buyer needs all of those attachments for some “just in case” scenario.
Accept it because we know what’s best for you
Too many politicians are under the delusion that they know what’s in the best interest of the voters. In their feeble minds, they actually believe that the public isn’t smart enough to understand how important Obamacare is (or isn’t), and why people should accept the law for the betterment of the country.
Too many agents sell one product or one solution to every single person they interact with. The Obamacare correlation to this type of sales process is scary and should be disturbing enough to make sure that every prospect receives a customized strategy that is based solely upon their specific situation. That means more than one carrier.
The plan will eventually be read
To President Obama’s and Ms. Pelosi’s dismay, people are now reading the law in full and don’t like what they see and the realities of the panacea that was sold. That’s the reality of saying whatever needs to be said to get the sale, because eventually the contractual facts will be revealed.
Just like people (and finally, the media) are now reading the thousands of pages of Obamacare, the majority of annuity clients will eventually read the policy that was sold to them. It’s just common sense to cover that base in a pre-emptive manner because it’s the right thing to do.
The only positive that I see coming from the Obamacare nightmare is that the majority of rational people are not just going to believe what they are told anymore, regardless of how good it sounds. I hope that extends to annuities as well.
For more from Stan Haithcock, see: