No more silos! Why life insurance and annuities are joining the same conversation

Are annuities and life insurance finally moving out of separate silos and into one broader planning conversation for advisors?

As advisors shift from a product‑centric mindset to one focused on client outcomes, they’ve become more open to bringing annuities and life insurance into a single, integrated planning conversation. In fact, the Janus Henderson Investors 2024 Investor Survey found that retirees are seeking greater stability and 54% are finding this through greater utilization of annuities.

“The idea of creating a ‘retirement paycheck’ has gained traction as everyday costs rise and investors hear more about the risks of outliving their savings. Losing the security of a salary is both a financial and psychological hurdle, because every dollar spent in retirement feels like a dollar that won’t be replaced,” said Ben Rizzuto, wealth strategist with the Specialist Consulting Group at Janus Henderson Investors.

He adds that research also shows that many retirees spend far less than they safely could, so introducing guaranteed income through annuities can help clients feel secure enough to use their savings more confidently and live a more fulfilling retirement.

Meanwhile, Libet Anderson, a business development executive at Cetera Wealth Partners, believes these should never have been in separate silos in the first place. In her view, it simply does not make sense to work to build an investment portfolio for retirement, but not protect those assets should something happen.

“With the shift from Defined Benefit to Defined Contribution plans and the corresponding shift of risk and discipline from employer to employee, we now have more retirees unprepared for the retirement they imagined. Since more retirees are dependent on social security, life insurance and annuities become an even more critical piece of the planning process,” Anderson said.

Moving on, Jay Charles, head of insurance solutions at Luma Financial Technologies, points out that the industry left planning gaps on the table for years because these conversations happened in isolation. When you connect them, you uncover risks and opportunities that would otherwise be missed in his opinion.

Most importantly, he says bringing these workflows together also strengthens oversight and suitability by putting more of the process into a consistent, transparent framework. When annuities and life insurance sit inside separate systems, it is harder to supervise recommendations, compare options, and maintain a clear view of the client’s broader protection strategy.

“When they are connected, firms are in a better position to manage risk, support advisors, and spot issues earlier. What's changing now is that the technology and the planning philosophy are finally catching up to how real financial decisions get made. This isn’t a cyclical shift, it’s structural,” Charles said.

PLANNING IN AN ERA OF UNCERTAINTY

In today’s volatile markets and shifting tax landscape, annuities and life insurance serve very different but complementary roles. Annuities help clients create an income floor, manage sequence‑of‑returns risk, and avoid withdrawing from portfolios at the worst possible time, according to Rizzuto. 

“Life insurance becomes most valuable when clients need tax‑free liquidity for protection, estate planning, or legacy goals — especially for higher‑income and high‑net‑worth households. In an uncertain environment, flexibility matters. Separating ‘spendable income’ from ‘growth capital’ helps clients stay invested and reduces the behavioral mistakes that volatility tends to trigger,” Rizzuto said.

Luma’s Charles, meanwhile, says that volatility has a way of exposing where a plan may be thin, and it also reminds clients that market returns alone do not solve every planning problem. The advisors who handle this well are not framing it as a choice between annuities and life insurance, but rather they are matching solutions to the actual risks a client is trying to manage.

“Advisors who can bring both income and protection into one conversation are fundamentally more valuable to their clients. They’re not just managing assets, they’re helping manage outcomes,” Charles said.

Finally, Anderson notes that the decumulation of retirement assets is not just about sprinkling in more and more bonds each year. Advisors need to know the level of “fundedness” of their clients so they can properly advise them.

“Someone who might be able to retire but can’t take too much risk might need some guaranteed income to ensure they can take care of essential expenses. If an advisor is truly exercising holistic planning, the protection side cannot be ignored. With market volatility, the plan can simply fall apart under something like the old ‘4% rule’ with no additional guidance,” Anderson said.