Annuity Quotes: How to Lock Them In

Hey, Stan The Annuity Man, America's annuity agent licensed in all 50 states. That includes the one you're sitting in and your state of residence. Yes, I can sell you an annuity there. The question is, do you even need one? Well, the first step is obviously getting some annuity quotes, and then once you get them, how do you lock them in? But before that, yes, I only sell annuities. What does that mean? Well, I'm an annuity freak. I mean, who in their right mind only sells annuity? The financial curse word. Everyone hates annuities, right?

‌Maybe not. Because you already own one, it's called Social Security. Now, obviously, I am very serious about what I do, but I don't take myself too seriously. We have some fun with this, and I tell the truth, as my grandfather told me, in Stanley, North Carolina, where I grew up. He'd say, if you tell the truth, you don't have to remember anything. Annuities are contracts, so I don't try to polish them up, but let's talk more about annuity quotes.

‌Find an Objective

‌We'll go through the specific types and how to get those quotes, and you can make an informed decision from there. The first thing you need to do with annuity quotes is to find an objective, which is what's called an annuity calculator or annuity quotation system. We call them calculators where I'm from and on our site, and we have a proprietary annuity calculator that pretty much quotes all carriers out there for the highest contractual guarantee. When you're looking at annuity quotes, think about when you go and buy a plane ticket. When you buy a plane ticket, you're not going, you know what, I want to fly American or Delta or whatever, unless you're trying to compile points. But let's say you're not. Let's say you're looking for the best deal. You punch in where you're going to go; you punch in when you want to go, and you punch in all the little whistles and bells you want to be attached. You hit the button, then the prices pop up, and you can choose and book the flight that way. The exact same thing applies to the majority of annuity quotes, especially the ones that provide income.

‌Brief History

‌Annuities were put on the planet to provide income. And the history of it. I know you want the history. The history of the annuity product started in Roman times when they created these payments called Annuus. That's Latin for payment. That's the only Latin word I know. It was for the dutiful Roman soldiers and their families because they were laying it on the line for the empire, and they wanted to reward them with a lifetime income stream, and that's exactly what they did. That early Roman annuity is today's version of an Immediate Annuity, a Single Premium Immediate Annuity. So, when looking at annuity quotes, let's talk about lifetime income.

‌Lifetime Income

‌Let's say, "Hey, Stan The Annuity Man, I need a lifetime income stream for me or me and my spouse, partner, whatever." The first thing I'll need to know from you is where you live. Because annuities are issued, regulated, and improved at the state level, not the national level. Fixed Annuities are life insurance products that are issued by life insurance companies. You probably didn't know that, but that's true. They're transfer risk contracts. But I'm going to need to know the state of residence, I'll need to know date of birth or dates of birth because the annuity company's price life expectancy to the day.

‌And these lifetime income streams are primarily based on life expectancy with interest rates playing a secondary pricing role with that income stream. Most people think it's all interest rates, but it's not. It's life expectancy. And really, you need to look at the life expectancy tables more because if they change the life expectancy tables against you, they mean the annuity companies, that means the payments are going to be less. After all, they're going to project you to live longer. So, the other thing we will need is the type of account you will be using IRA, non-IRA, Roth IRA.

‌The guarantees are going to be the same. It's just the taxation of that income stream coming to you will be different based upon what account that you use. The other thing that we're going to need is if you want to put a lump sum in or if you want to try to solve for a specific monthly amount, which is a reverse-engineered quote. If you said, "Hey, Stan, what's $100,000 annuity pay?" Which is what I get all the time, that question. Well, state of residence, dates of birth, when you want the income to start, and if it's a lump sum, I can run that quote.

‌On the reverse engineer side, it is the same thing: state of residence and dates of birth, and then instead of a lump sum, I would need to know the exact dollar amount monthly that you will want to hit your bank account. You can reverse engineer the quote, or you can lump sum the quote to find out what it will pay per month. It doesn't have to be monthly. You can get paid quarterly, semi-annually, or annually. But most people like to see a monthly income stream come into their bank account because they're used to getting paid monthly.

‌Like a Gallon of Milk

‌Social Security hits monthly, so it's just part of that overall income floor. So, how do you lock those quotes in? Understand this, and this is very, very important. Annuities quotes are like a gallon of milk, which expires every seven to 10 days. My grandmother, it's a great story. My grandmother used to call sour milk, like when it turns, she used to call it blinky. She goes, that milk smells blinky. I don't know what blinky means. I need a shirt that says blinky on it because I think that's a made-up Southern word.

‌Even to this day, I'll tell my wife, is that milk blinky? My wife's from Nebraska, and they don't even know what blinky is. She's like, blinky, what is blinky? The bottom line is your annuity quotes are like a gallon of milk. They expire every seven to 10 days. So, how do you lock them in? You can't just have me run a quote, tell me to lock it in, and then two weeks later, call me up and say, hey, that's the one I want. It happens all the time.

‌A guy called me the other day and we had done annuity quotes. I'd sent them to him and then three weeks later, he calls, he goes, that's the one I want. I want X, Y, Z company. I'm not going to give away the company. I represent them all. So, I want X, Y, Z company in this amount. And I went, I'm really sorry, Chester, because that's not the case, we can't do that anymore. Quotes are like a gallon of milk. So, how do you lock them in? You lock them in going into the application process. The quote is locked in once you go through the application process and the annuity carrier or annuity company gets your paperwork.

‌We can lock a quote in, and they typically say, okay, we're going to lock it in for seven days. But that means you do not have to decide in seven days. What that means is they need the paperwork within those seven days.

‌When is the best time to buy an annuity? The answer is not when the agent wants you to. It's when you want to. It's when you want to solve the problem. There's no way to time annuity purchases. It's like nailing Jello to a wall.

‌Math Products

‌A guy called me the other day and said, I'm going to wait until interest rates move. I keep telling people that lifetime income streams are about life expectancy. Of course, he didn't listen to me. He goes, I'm just going to wait until interest rates move. I said to him, that's fantastic, Fred, but you're going to have to factor in all of those payments you're missing while you're trying to time rates. That's not a sales pitch, by the way. That's just a mathematical reality. And annuities are math products. And what I tell people all the time when you lock quotes in, you have to understand that if the contractual guarantee meets your goals, then it might be a good move to transfer that risk and get the annuity. There's no perfect time for it. Listen to your gut feeling. Listen to your instinct.

‌From the standpoint of locking in quotes with other types of annuities, you will hear all kinds of sales pitches from Variable and Index Annuity people. There's no perfect time. I mean, there really isn't a perfect time for those. Once again, understand the contract; the only urgency is to know what you're buying before you buy it and sign that application. Now, the other one is Fixed Rate Annuities. That's a pretty fluid market. It's like a CD product that the annuity industry offers. Those rates change. They don't change rapidly, and they have recently been volatile. At the time of this blog, the markets are pretty volatile. Interest rates are pretty volatile.

‌The same applies; you must get that application paperwork to the carrier. And typically, once you get that application in, that annuity company will give you some time, depending on the carrier, 10 to 20 days to get that money into them while they lock that rating, which is a good thing. So, that's with Multi-Year Guarantee Annuities.

‌By the way, I have written a book on Multi-Year Guarantee Annuities and every other annuity type, Index Annuities, QLACs, Single Premium Immediate Annuities, and Income Riders. You can download them all for free. You can also listen to my podcast and read more blogs. So, with that being said, I'll see you on the next Stan The Annuity Man blog.

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.