By Cyril Tuohy
The Society for Annuity Facts & Education (SAFE), a nonprofit with the aim of educating consumers about annuities, has joined with an industry coalition to declare June as Annuity Awareness Month.
Hardly a day goes by without dire warnings about underfunded retirements and people outliving meager savings, according to members of the coalition made up of life and annuity carriers, annuity marketers, distributors and data aggregators. The talk these days is how to generate lifetime income for many of us who will live to be 100.
Annuity awareness is “timely and very much needed,” Sheryl J. Moore, president of SAFE and an expert on the annuities market, told InsuranceNewsNet.
“When I started my business 10 years ago, we focused on life and annuities, and Americans are familiar with life and the need for it, but not with annuities,” said Moore, who is also chief executive officer of Moore Market Intelligence.
Consumers are more familiar with life insurance than they are with annuities. Life insurance protects policyholders from the risk of dying to soon. Annuities achieve the opposite: They protect annuity contract holders from living too long.
Many people will spend at least 20 years in retirement, and some may well live more than half their lives in retirement.
As if to drive home that very point, Alexander Imich, a New Yorker certified as the oldest man in the world, died last week at the age of 111, according to news reports. The list of supercentenarians, people who have reached 110 years old, grows longer every year.
Funding those retirement years is why annuities need more attention — and the right kind of attention — from consumers, lawmakers and the public.
“People confuse an annuity with CDs and insurance,” said SAFE acting executive director Kim O’Brien, president and CEO of the National Association for Fixed Annuities (NAFA). “People don't understand the difference, especially with the intense selling of variable annuities. People merge the two together.”
On Capitol Hill, three bills, all anchored in annuities, have been introduced to start the discussion about buttressing Americans’ retirement, O’Brien said.
SAFE, founded in June 2012, was granted 501(c)3 nonprofit designation earlier this year.
Sponsors of National Annuity Awareness Month include NAFA, Beacon Research, Wink Inc., the National Association of Independent Life Brokerage Agencies (NAILBA), the Society of Financial Service Professionals, Allpro Direct Marketing, Insurance Insight Group, the Association for Advanced Life Underwriting (AALU) and the National Association of Professional Agents (NAPA).
It made sense for SAFE and the coalition to declare June as Annuity Awareness Month because it steers clear of Life Insurance Awareness Month in September. Holidays jam November and December so those were dropped from consideration as well, O’Brien said.
Financial services industry product launches often take place in March. With Retirement Planning Week and Financial Literacy Month crammed into April, and with May stuffed with school graduations, June is relatively quiet — before consumers leave for July and August vacations.
“It’s fairly open month from a financial services perspective,” she said.
A U.S. declaration of June as Annuity Awareness Month in the Federal Register will require a resolution from Congress, O’Brien said. In the meantime the coalition plans to push state governors to declare the month of June as Annuity Awareness Month.
“The rest of the summer and fall, we're going to get state proclamations and get governors to proclaim June National Annuity Awareness Month,” she said. “We will go out and gather as much of the 50 states as we can.”