The Abundant Fixed Annuity Marketplace

It has been said there are only three things you can do with your money; 

  1. Spend it (consumption) 

  1. Give it away (donate to charity, be philanthropic, pass it down to family or loved ones, etc.)   

  1. Give it to “Uncle Sam” (in the form of paying taxes to the IRS)  

For the most part, this is true and hard to argue with! 

If people are responsible, then they should recognize they also have other basic needs that involve their money, personal finances, and the big “R” word (retirement).  

In a sense, you could say that investing, saving and withdrawing income are three other things people could do with their money. 

This is where an insurance-regulated product called an annuity might come into play! For the purpose of this article, we are going to focus on fixed annuities (FA’s), as opposed to their counterpart called variable annuities (VA’s).  

FA’s (abbreviation for fixed annuities) always contain a minimum guaranteed interest rate and owners cannot lose their money due solely to stock market volatility. Conversely, VA’s are considered an investment/security and contain sub-accounts that are like mini mutual funds, so they do have market risk and owners can lose their money due to volatility. 

FA’s are essentially “fixed” interest savings vehicles issued by insurance companies that are sort of similar to a certificate of deposit (CD) issued by a bank or a bond issued by the U.S. Treasury, but with some distinct differences.  

Most CDs and bonds earn interest and then credit and/or pay interest to the customer every year (monthly or bi-annually etc.). The buyers of these financial instruments typically place money into them to earn some interest because they’re safe from market risk.   

I say safe because most CDs are insured by the FDIC (Federal Deposit Insurance Corporation) and most bonds are backed by the “Full faith and pledge of the United States government.” These extra layers of protection make them very attractive for people looking to conservatively earn some interest without stock market risks. 

A few disadvantages of traditional bank CD’s and treasury bonds is they pay relatively low interest and their interest earnings are usually taxed each year.* 

What if there was a way for consumers to take advantage of the positives of both interest-bearing bonds and certificates of deposit (CD’s), but without those potential negatives?  

One alternative solution is a fixed annuity (FA). There are different versions of FA’s, but those details are beyond the scope of this writing and can be addressed in a separate article. 

Nevertheless, what you need to know is that fixed annuities (FA’s) can offer people the ability to earn reasonable rates of return without forfeiting safety and liquidity! People can still get access to their money with certain liquidity provisions and limits.  

FA’s can also earn interest on a tax-deferred basis, which is where the term tax-deferred annuity (TDA) and tax-sheltered annuity (TSA) originally came from. Meaning, people can legally avoid or delay paying income taxes while their money is earning interest and growing inside an annuity. This is also simply known as tax-deferral.  

So, why are annuities such a BIG deal to insurance and financial professionals?  

Every year (for as long as I could find otherwise) investors and savers direct hundreds of Billions of dollars into annuities!! A portion of this money (called annuity premium) goes into FA’s and the other portion flows into VA’s. Yes, hundreds of billions of new annuity premiums each year.  

Guess what? These products can only be purchased through a licensed insurance agent! 

If you hold an insurance license with the ability to sell fixed annuities you essentially hold the key to offering the only financial product that can provide consumers a guaranteed lifetime income stream, plus the ability to earn reasonable growth without stock market risk! 

With thousands of Baby Boomers retiring and turning Age 65 every day, don’t you think it would be wise for you to offer this solution? If you don’t many of your competitors will. 

If you’re not doing so now, you’d be wise to learn more about annuities and position yourself to offer them to your customers when appropriate and suitable. It’s a true win-win!  

*relatively low interest compared to other safe or moderate risk alternatives and taxed annually if the funds are non-qualified and outside of an IRA or other qualified plan. 


About the Contributor 

Jason T. Brown is a licensed insurance professional. He is also the Head Trainer for Life Professionals LLC. Life Professionals is an IMO offering Annuities, Life Insurance & Senior Health products. Mr. Brown can be reached at (888) 574-9088, Ext. 706 or 



© Copyright 2022 by Jason T. Brown & Life Professionals, LLC 

Date Published 2/10/22, 10:30 AM