Helping clients make smart financial decisions can be challenging, especially when explaining lesser-known financial products like Multi-Year Guaranteed Annuities (MYGAs). As an insurance agent, explaining MYGAs to clients can help them understand how to grow their savings safely.
At Premier Insurance Partners, we are dedicated to equipping agents with the knowledge and tools they need to support their clients. With years of industry experience, we provide trusted solutions that help insurance agents secure their clients’ future and MYGAs are one of the many powerful annuity products available.
What is a MYGA?
A Multi-Year Guaranteed Annuity (MYGA) is a type of fixed annuity that provides a guaranteed interest rate for a set period, typically between three years and ten years. This makes MYGAs an attractive option for clients looking for steady, predictable growth with minimal market risk. Unlike other annuities that may shift with market fluctuations, a MYGA offers stability and security, making it a great choice for conservative savers or those nearing retirement.
Key Benefits of MYGA
When explaining MYGAs to clients, make sure to highlight these key benefits:
- Guaranteed Returns: One of the biggest advantages of a MYGA is the certainty it provides. Clients know exactly how much interest they will earn over the contract term, allowing for a straightforward financial strategy.
- Tax Deferral: MYGA earnings grow tax-deferred until distributions begin. This allows for greater compound interest growth compared to taxable instruments.
- Low Risk: Since MYGAs are not directly tied to stock market performance, clients avoid market volatility. This makes them a strong alternative for those seeking stability in their retirement savings.
Common Client Concerns & Questions
When explaining MYGAs to clients, agents often encounter the following questions:
- “Can I access my money if I need it?”: MYGAs typically have a surrender period with charges if withdrawn before the term ends, but many allow penalty-free withdrawals of a portion of the funds each year.
- “What happens when the term ends?”: Clients can often renew at a new rate, roll over funds into another annuity contract, or withdraw their money without penalties.
- “Are MYGAs safe?”: Guarantees that MYGAs provide are backed by the financial strength of the issuing insurance company, making it important to choose a reputable provider.
Best Practices for Explaining MYGA to Clients
- Use Simple Language: Avoid technical jargon.
- Provide Examples: Show clients how their money will grow over a specified period with a MYGA.
- Address Concerns Early: Proactively discuss market value adjustment (MVA), early withdrawal surrender charges, rate changes, and liquidity to build understanding and transparency.
- Tailor the Message: Discuss benefits that align with the client’s financial goals, whether it’s secure retirement income or steady, low-risk growth as well as other considerations about the product and what the client should know.
Who are MYGAs Best For?
MYGAs are ideal for:
- Pre-retirees and retirees seeking a stable and predictable income stream.
- Clients who want tax-deferred growth without stock market risk.
- Conservative investors prioritizing financial security over high returns.
MYGA contracts offer a straightforward, lower-risk way for clients to grow a portion of their savings while ensuring financial stability. As an agent, your role is to explain the product in understandable terms, address client concerns, and help them assess how MYGAs may fit into their broader financial strategies. By doing so, you can build trust and guide clients toward a more secure financial future.
Ready to help your clients with MYGAs? Contact Premier Insurance Partners today to learn more about the top MYGA options available and how they may be able to benefit your clients!
Here at Premier Insurance Partners, we make selling insurance easy no matter where you are in your insurance career. We prioritize providing in-depth training to our sales agents to help their clients and grow your business. Find the best rate for your clients with our Medicare software for our top producers. Our annuity tool always offers the most recent changes. If you have any questions, please contact Premier Insurance Partners at 855-827-1661 or info@pip1.com.