The answer is it all depends. It depends of the purpose of the money and what the prospect wants to accomplish. A fixed deferred annuity can be a reasonable alternative to a bank certificate of deposit (CD). Ask your prospect the following questions to determine if a fixed deferred annuity may better meet their long term savings goals.
If their answers indicate that a long term horizon for their savings is currently held in a CD then the annuity alternative might make sense? This would be a great time to explore the advantages and disadvantages of a fixed deferred annuity vs. a bank CD with your prospect ..
Annuities are long term retirement products and may not be appropriate for everyone, the best way to determine if they do make sense if to make yourself fully aware of your prospects goals and needs.
Would a fixed rate annuity be better than a CD for my long term goals?
Questions for Your Prospect
* Do you currently own a bank certificate of deposit? Yes or No
* Are any of these CDs maturing in the next 90 days? Yes or No
* Are you planning to use any of these funds in the next
5 years? Yes or No
* Do you have sufficient liquid assets should be unexpected
family or medical emergency arise in the next 5 years? Yes or No
* Have you requested at your local bank about current interest rates? Yes or No
* Has the bank notified you about new renewal rates? Yes or No
* Could deferring taxes on the interest earned be a tax savings? Yes or No
* Would you consider an alternate fixed interest product
if it made sense to you? Yes or No