It was the accepted practice in Babylon 4,000 years ago that for a month after the wedding the bride’s father would supply his son-in-law with all the mead he could drink.
Mead is a honey beer (and can be wine) and because their calendar was lunar based, this period was called the honey month, which we know today as the honeymoon.
Many annuity products have a honeymoon period with the client. The honeymoon is the time period from how the insurance agent may have explained an annuity to the harsh reality of performance! Often mistakes and misunderstandings occur when indexed annuities are sold. These products can be complicated and have many moving parts which come into play in different scenarios. Many times the grim facts of performance come to light and the client is unsure what they actually bought and why does the insurance company get to keep the money so long?
Full disclosure makes selling these indexed products so much easier in the long run. Always leave a company provided brochure for the product sold and keep a copy in the clients file for future use. By cutting corners we may be able to sell a couple more annuities than if we disclosed everything but you know what? It is the wrong way to sell.
Equity indexed annuities are not the easiest product to explain, there are just a lot of factors to determine. Be careful and take your time so the honeymoon period lasts as long as the contract.
Start with this. Equity Indexed Annuities are fixed annuities and your funds are NOT invested in the stock market! Your funds are invested in the general bond portfolio of the insurance company and any gain is provided by the use of option futures between the insurance company and Wall Street.
Full disclosure, take your time explaining the product, focus on the underlying guarantees, the benefits that come with the contract and guess what….
Maybe The Honeymoon Will Last!