When mutual funds started selling products online more than 20 years ago, some insurers dreamed of selling simple fixed-rate annuities that way too. After all, a similar product, the bank certificate of deposit, can be purchased easily by a consumer over the internet.
In a way, this could be viewed as a litmus test for annuity issuers: if you can’t sell your most basic product directly to consumers, then what hope do you have with more complex ones?
The dream may not be panning out as imagined. Florida-based agent Stan Haithcock thinks insurers underestimated the difficulty of making a profit selling fixed-rate products, also known as multi-year guaranteed annuities, directly to individual buyers.
“Everyone is trying to figure out how to strip out commissions and make them lower and go direct to consumer,” said Haithcock, who brands himself as Stan The Annuity Man. “I don’t care how easy you think that online form is, it’s not going to be easy.”
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