The Alliance for Lifetime Income, a non-profit consumer education organization devoted to helping Americans address the risk of outliving their retirement income, today released the Second Edition of its Annuities Language Glossary.
This new resource for consumers and financial professionals builds on the original glossary by adding new terms and definitions to reduce complexity and demystify annuities, providing them with simpler language they can understand.
Consumers have long been confused by the technical terms and jargon used by the financial services industry, which has created considerable misunderstanding about the benefits and importance of annuities in a diversified retirement portfolio. These new, simpler terms and definitions were derived from extensive consumer research and interaction with consumers.
"For many Americans, annuities are the only way they can effectively protect their retirement income today and ensure they are financially secure for as long as they live. But the language used to describe annuities, like so many other financial products, is often too complicated or ambiguous for most people to understand," said Jean Statler, CEO of the Alliance for Lifetime Income. "To solve this problem, we went straight to consumers to hear about the words and phrases that make sense to them. By creating the industry's first-ever glossary specifically for consumers, we're not only making an important financial product easier to understand, but also honoring one of the Alliance's guiding principles and commitments: to reduce complexity and give consumers simple, clear and transparent information about annuities."
This glossary also draws on past language research conducted by various companies in the financial services industry. The Alliance adds to that cumulative knowledge with its own nationwide quantitative and qualitative research, conducted amongst 1,000 consumers, as well as firsthand interaction and reactions from consumers about retirement savings priorities and concerns, their knowledge of annuities, and the complex terms used when discussing annuities.
David Blanchett, head of retirement research for Morningstar Investment Management LLC, and senior education fellow with the Alliance for Lifetime Income, added "Simple and clear language has been a long time coming in this industry. If the retirement industry can come together to adopt this new language, it will remove a notable barrier for consumers, which is lack of understanding."
The Alliance is also providing its revised Annuities Language Discussion Guide alongside the glossary to help enable financial professionals to speak with clients about annuities in a consumer-friendly way. While simplifying the language used to describe annuities is a critical factor in helping Americans protect their income, a thoughtful conversation with a trusted financial professional can ultimately enable a financially secure retirement.
The Second Edition Annuities Language Glossary is available now at ProtectedIncome.org. Financial professionals are also encouraged to visit the Alliance's Financial Professional Resource Center at Resources.ProtectedIncome.org for additional tools, including a client discussion guide and version of the glossary designed for financial professionals.
This article originally appeared on Insurance News Net.
