I’ve said it before on this blog (as per my post from earlier this year entitled “Experiential Reality”) that it’s encouraging more detailed data on life and annuity products are steadily becoming available, thanks to the web and social media. Now those who do a little digging can see actual returns some owners have been getting on their FIAs and IULs, for example.

But annuities and life insurance policies are still mostly sold, not bought right? To what extent are clients – dare I call them insurance “shoppers” – presented with multiple options at point of sale? And by options I don’t mean just a few flavors of the same kind of annuity or policy, rather a comparison of wholly different product types.

I say this because over the past few years life insurance has been marketed for a wide variety of things, from serving as 401(k) or 529 plan alternatives, to mitigating volatility risk in a portfolio, to acting as a substitute for fixed income, to providing tax-free lifetime income. The latter is, after all, the traditional selling point of the annuity.

How many retirement income tools can there be anyway? We already have a plethora: SPIAs, DIAs, GLWBs, various systematic withdrawal programs…all with their unique advantages, costs, etc.

And lately there’s been no shortage of financial professionals urging investors to move their 401(k) and/or traditional IRA assets to an insurance product via Roth conversion. The pitch is that the client can tap into those dollars later tax-free. But the client pays taxes on the conversion anyway, right? Do these advisors have the numbers to show the client will be truly better off getting a tax hit now rather than later? I’d like to see them if they do.

Likewise, I’d love to see a head-to-head comparison between a 529 plan and an insurance arrangement, that can prove the latter is better.

I won’t make this a long post but, if now there are so many products and solutions available that can solve for the same thing, I certainly hope that clients are presented with more than one before they commit their hard-earned dollars.