Today's topic is how to buy an annuity, which is a broad topic. I will talk about the industry a little bit and where I see things going.
All right. Let's talk about how to buy an annuity. First of all, you might not need an annuity. Oh, spoiler. Huh? How about that from the number one annuity agent in the country? Yeah. I mean, it's true. Not everybody needs an annuity. It's not a one size fits. Yes, everybody with a social security number in the country already owns an annuity, and that's called social security. But the good thing about social security as an annuity is that it's the best inflation annuity on the planet.
I've stripped down how to buy an annuity. Of course, I have two questions that I ask every person I speak with; What do you want the money to do contractually? And when do you want those contractual guarantees to start? I've also come up with an acronym called PILL. P stands for principal protection. I stand for income for life. L stands for legacy. The other L stands for long-term care, enhanced benefit, and confinement care. Let's do it again—principal protection, income for life, legacy, long-term care, enhanced benefit, confinement care. If you don't need to solve for one or more of those four items in the PILL, you do not need an annuity.
There's no S for the stock market. There's no M for the market. There's no G for growth in the PILL. Do not ever buy an annuity for market-type growth; just don't. And my apologies to my friends in the variable annuity world. But with variable annuities, you have limited choices in the world. When you're talking about stock market returns, you don't have any limitations. You can get the moon if you choose right; you get it all. So don't do that with annuities. PILL, principal protection, income for life, legacy, and long-term care. So from the two questions in PILL, we're going to determine if you need an annuity.
If you do, we're going to shop for the highest contractual guarantees based on your answers to those two questions. We’re probably looking at Multi-Year Guarantee Annuities if you want principal protection. If you want income, you want it to start now, that's a Single Premium Immediate Annuity. If you want income, you want it to start later; a Deferred Income Annuity or QLAC or income rider.
So how to buy an annuity? If it sounds too good to be true, it is every single time without exception. Also, annuities are commodities like a gallon of milk. You shop all carriers for the highest contractual guarantee for your specific situation. Think of it as shopping for a plane ticket. Unless you're on a rewards program with some carrier, you punch in where you want to go and how you want to get there, and it pops up the quote—same thing with annuities. When you go to my site at theannuityman.com, we make it easy to shop independently without some agent bugging you. By the way, we're never just going to call you. The only way to talk to me is to schedule a call. That's not some arrogant thing; it’s just efficient. And I respect your time, and you respect my time.
Now, where the industry is going is pretty interesting. Now what we're we're planning for is eventually it's going to be more of a direct-to-consumer model. And I think the gap that's missing right now is the education gap. As my CEO says, she goes, "People don't don't know what they don't know." She's right, but we're trying to fill in that gap. I've written seven books on the subject, done hundreds of these videos, 400 published articles, podcasts, etc.
Now, the annuity industry, like I said, wants to get rid of agents, and they'd love just to sell direct. XYZ Insurance Company would love for you to go to their site and buy it from them. Here's the problem with that. Remember I talked about annuities being commodities? Not one's better than the other. You should shop all carriers for the highest contractual guarantee. That shoots that down. Because if it's just that one carrier they're selling just their products, you're probably not going to get the best bang for your buck.
When you're selling contractual guarantees, I think annuities should be sold. The way annuities should be bought is because if we're talking about how to buy an annuity, you need to look at just the contractual guarantees. Some hypothetical, theoretical, projected, back-tested unicorns are chasing the butterfly’s crap sales pitch. You buy the contractual guarantee.
So that's what the annuity man's all about. I think that's where we're hated as an industry, and we are leading the way. We will provide the highest contractual guaranteed quotes on the planet and show you the live feed of the migrant rates, and the best-fixed rates. But that's the way annuities should be purchased now. And what's going to happen in the future? It’s just going to become more and more of a direct-to-consumer model that looks like mine right now.
Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.