Which factor can influence a client's choice of annuity type?

When considering the factors that influence a client's choice of annuity type, all the options play a significant role.

The expected lifespan is crucial because annuities are designed to provide income over a specified period, often for the lifetime of the annuitant. Clients with longer expected lifespans may prefer annuities that offer lifetime income, whereas those with shorter lifespans may focus on different structures or features.

Current income needs are also a vital consideration. Clients may seek immediate income through immediate annuities or may need a deferred income structure to plan for future financial requirements. Understanding the timing of income needs helps tailor the type of annuity that best fits their situation.

Investment risk tolerance is another essential factor. Clients with a lower risk tolerance may prefer fixed annuities that offer guaranteed returns, while those willing to accept more risk might lean towards variable annuities that have the potential for higher returns but come with market risk.

Each of these factors is interconnected and can guide the client in selecting an annuity type that aligns with their financial goals and circumstances. Therefore, emphasizing that all of these factors influence the choice reflects a comprehensive understanding of the decision-making process in annuity selection.