Choosing the Right Annuity Agent

Hi there, Stan The Annuity Man, America's annuity agent, licensed in all 50 states. Today's topic is a very, very good one: choosing the right annuity agent. It's a crucial decision, and I know what you're saying, "Well, this is just going to be a commercial for The Annuity Man." Maybe, but it's a commercial on how the business should be done, in my opinion, which that's how we do it.

Annuity Types

When you're looking at annuities, understand there are many different types. There are bunches of Fixed Annuities: Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, Index Annuities, Income Riders attached to Index Annuities, Multi-Year Guarantee Annuities, and traditional Fixed Annuities. Then, there are annuities for long-term care and legacy. There are Variable Annuities that we don't sell.

When shopping for annuities, if you go to The Annuity Man, you can run quotes there, 24/7, 365. You can see all the videos I've done, and I've done thousands of them. You can download the seven books I've written for free. You can get educated on your terms and your timeframe.

But when you're looking for annuities, my question is why? Why are you looking at annuities? No one typically wakes up in the morning and says, "You know what? That was a good cup of coffee. I need to look at annuities." No, you'll wake up and say, "God, I really need more lifetime... I need more income, or I need to protect this money from market volatility." You're looking for those things, those goals that most of us have going into chapter two of our lives.

The PILL Acronym

Annuities solve for four things, and the acronym is PILL. P stands for principal protection. I stands for income for life. L stands for legacy. The other L stands for long-term care. If you don't need to solve for one or more items in the PILL contractually, you don't need an annuity. Never ever buy an annuity for market growth.

At the annuity seminars, you go to and eat really good steak dinners, they're going to say, "I've got the annuity that does market growth and protects your principle and ties your shoes and lowers your A1C levels." No, there's not a one-size-fits-all. That's just a high-commissioned product that agents tend to push regardless of what you want.

Ask yourself two questions when thinking about annuities: what do you want the money to contractually do, and when do you want those contractual guarantees to start? And go back to the PILL. Are you trying to solve for lifetime income? Are you trying to solve for principal protection? Do you need a long-term care type annuity? Do you need a legacy-type annuity because you can't qualify for life insurance, which is the best legacy product on the planet? What I would tell you to do is shop everybody. My advice would be to refrain from doing business with family. You shouldn't do business with family or friends because this is your money. This is serious. You don't need a friend. If you need a friend, get a dog, and name the dog Annuity.

Ask Questions

When you're shopping for people, ask that agent or advisor, "What types of annuities do you sell? Do you sell all types like Immediate Annuities and Deferred Income Annuities?" Go through the list. "Or do you just sell the high-commission ones?" And if they say, "Well, these are the best ones. I'm just telling you. These have upfront bonuses and all.," then they've disqualified themselves.

Wrap Fees

Also, if you have an advisor who wants to sell you an annuity and then put a wrap fee around it, get up and walk out. Wrap fees, in my opinion, having worked for Dean Witter, PaineWebber, UBS, Warwick, and Stanley, wrap fees are for people managing equity-type assets and type assets that bonds. There's an argument for and against that as well, but people who are actively managing your money.

Annuities are contracts; they're transfer of risk and contractual guarantees. There's no active management, so if anyone says, "I want to sell you an Indexed Annuity and charge a wrap fee," that's insane. I know I'm going to get a lot of industry blowback on that. The people who are going to be getting mad at me are the agents and advisors.

Wrap fees, by the way, I was around when those first came out. That's nothing more than just a future revenue source for firms to track, but you should only have somebody manage an Indexed Annuity with a wrap fee. The only one that has an argument for management fee would be a Variable Annuity, but under that premise, it would be a no-load Variable Annuity. Not the load, no-load Variable Annuity, of which someone is charging a fee to manage those separate accounts and mutual funds. We don't sell Variable Annuities, nothing against them. We don't sell anything that goes down. We only sell contractual guarantees, because you own an annuity for what it will do, not what it might do.

Backtested Numbers

This leads me to the other thing you need to look at when looking for an annuity agent, which is a crucial and important decision. If the person is talking about potential, hypothetical, backtested numbers, then they're really not the person for you. When you're looking at annuities, you're looking at contractual guarantees. You're looking at the worst-case scenario. You're looking at Armageddon; you're looking at what the policy will do, not what it might do, so if someone's focused on all these hypotheticals and all these backtested numbers, that's not your person, period. That statement eliminated the majority of Fixed Annuity agents out there because most of them are just pitching Indexed Annuities.

They're only pitching one size fits all, and they're only pitching one carrier.

Which leads me to the next thing. Remember the two questions. What do you want the money to contractually do, and when do you want those contractual guarantees to start? From those two answers, quote all carriers. You can go to our site and run quotes 24/7, 365. You're going to see a litany of carriers. If someone says, "This is the one. This is the company. I've done the research; this is the best one." Translation: they're lazy. Translation, if they sell enough of it, they get to go to Italy with their girlfriend, boyfriend, or whatever applies, wife, husband, whatever.

The point is, there's not one product or one company that's better than the other. These are commodity products. Income quotes for SPIAs, DIAs, QLACs, and Income Riders are like a gallon of milk. They change every seven to 10 days.

MYGA fees: You go to our site and look at MYGA fixed rate fees like a CD, and those change. I don't care what you're trying to solve for. I don't know why you wouldn't choose to deal with us, but let's just say you didn't. Let's say you had a frat brother who has pictures of you, and you have to buy the annuity from them. Make them show you the top three to five contractually guaranteed quotes for your situation. Do not allow them to get away with hypothetical, theoretical, backtesting, unicorn chasing the butterfly numbers. Do not allow them to focus on nonsense like upfront bonuses when you and I both know there's only a hundred pennies in the dollar. Just be smart out there. If it sounds too good to be true, it is, without exception, with annuities.

Be Smart

When you're shopping for annuities and hopefully you choose us or at least go to our site at The Annuity Man and check us out or maybe schedule a call and realize that we're not a hammer looking for a nail. We won't bug you, call you, and show up at your doorstep. No, it's just not going to happen. We're not going to meet face-to-face with you. Our main office is in Las Vegas, Nevada, so if you're in North Carolina, we aren't flying in, and you aren't flying to see us. You're buying contractual guarantees, so you really don't have to. You just need to know the good, the bad, the limitations, the benefits. You need to know all of that, and then you need to take your time and make your decision on your terms and your timeframe. Do not allow anyone to high-pressure you. Do not allow anyone to say, "Well, you really need to sign this and get it done because the upfront is going down." That is nonsense and garbage. There's no urgency to buy a contract, which is the policy you get from the annuity company. It's a contract. The only urgency is for you to understand what you're buying.

The Annuity Man

The final decision when choosing an annuity agent or whoever you want to purchase the annuity from is the staff. How big is the staff? Is it easy to call in and get someone? Can I easily call in and change the beneficiaries? Are you going to be in touch with me if my MYGA matures? Are you going to let things fall through the cracks?

Most annuity agents, I have nothing against them; they sell within a 30-mile radius of where they live. That's fine. Most aren't staffed like I am. We are fully staffed. We have people who are talking directly with our clients and people who could be our clients who set an appointment. We have staff that just does pending. We have staff that just does maturing annuities to make sure that we get in touch with you and that everything's going to stay on track.

The bottom line is that annuities are commodity products. If there are people out there who represent all carriers like us, that would be great. Then the question is, what does your staff look like? How does it run? What does the technology look like? I always tell people that I'm not a technology person, but The Annuity Man is a technology company that offers annuities. Do we sell annuities? Only when you want to buy one? There's no high pressure, there's no agenda, there's no product of the day. Again, it comes down to those two questions. What do you want the money to contractually do, and when do you want those contractual guarantees to start?

All I can ask you is just giving us a shot. Go to my site, The Annuity Man, schedule a call, interview us, and see if we fit you. We might not, but we might. Understand that we're in this for the long term. We're not going anywhere. I have been doing this for a long, long time. I have tennis shoes and cowboy boots older than most annuity agents. I'm not saying that young people can't do this, but I've been through many of the cycles, and again, I worked for Morgan Stanley, Dean Witter, Paine Webber, and UBS, so I've seen both sides of the ledger. I fully understand the annuity industry, and we look forward to you connecting with us.

My name is Stan The Annuity Man. See you next time.

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.