How To Know If Your Annuity Is Safe

Hello there, people across America. You have landed on the Stan The Annuity Man website. Yes, I am Stan The Annuity Man, America's annuity agent, licensed in all 50 states. That's including the one you're sitting in.

Topic Overview

But today, this topic is unique. It is called How to Know if Your Annuity Is Safe. Are the companies you're investing in, the annuity companies, safe? How do we go about looking at that? Because at the end of the day, when you're transferring risk, which annuity contracts are transfer of risk contracts, you better be transferring that risk to a company that can back up those claims and guarantees. It can't be just some insurance company from left field that doesn't have the reserves to back it up. We need to make sure that you are shopping for the best carriers out there for the highest contractual guarantees.

Evaluating Annuity Companies

Once we find the number you like, we will dig down to ensure the financials are in place. The ratings coincide with what you're looking to achieve, and we will talk to you and tell you how to do that at The Annuity Man. But in this blog, I'm going to go through those steps as well.

Annuity and Rock 'n' Roll

By the way, yes, I had a world tour and opened for the Rolling Stones on their last tour. Not a lot of people know that. And a little nugget of wisdom, the Rolling Stones had a tour in 2019. It was sponsored by the Alliance for Lifetime Income. Annuity people, some annuity pack, or whatever nonprofit sponsored the Rolling Stones tour. Does Mick Jagger go, "Thank you. Thank you very much. Have you ever thought about an annuity?" No, it didn't work like that. I don't even understand how that works. But I was on that tour. The Brutal Annuity Truth World Tour. Rock and roll, annuities, together, me and the Rolling Stones

Annuity Ratings Services

We were talking about the Rolling Stones. We're thinking, wait a minute, Mick Jagger's like 75 years old. He's almost at the prime age for an Immediate Annuity. He doesn't need that. He's got some money, but you know what I'm saying? These guys are old. I don't know how that even works. They couldn't qualify for life insurance because they've done too many drugs. But annuities are guaranteed issues.

Annuity Ratings Services

Let's talk about annuity ratings. There are four primary rating services that look at annuities and annuity companies, as well as their Claims Paying Ability. They are AM Best, Standard and Poor's, Moody's, and Fitch. And let's throw one more on there, my friend Martin Weiss, his company, Weiss. They also look at annuities, as well. Now, I will say this about Martin: I love him to death, but man, they are tough. I mean, they are, if you want their curmudgeon rating service, which I like, I mean, he is shooting it straight, it would be Weiss. And so a lot of people call me up, and they'll say, "The other rated agencies have this A++ on these really big companies, and then Weiss has them at a B or something like that." He's just a tough cat, and we respect him. But most of the agents and people use AM Best, Moody's, Standard and Poor's, and Fitch.

I throw Weiss's name out there because a lot of my clients are just big-time researchers, and they do their homework. And I want you to do your homework on these products. I want you to understand the good and the bad and the limitations of everything. I want you to understand who the carrier is, their Claims-Paying Ability, financial history, bond holdings, and all of that. So, that's where Weiss fits in with those other four.

Alphabet Soup of Ratings

Now, the problem with some of the rating services, the AM Best, the Moody's, and Standard and Poor's, and Fitch is they use that alphabet rating system, A or B, AA, or AA+, or A-, or B+, or B++ or BB+. It's like alphabet soup. It's like getting a bunch of Spaghettios with the alphabet in it. A lot of people go, "Well, Stan, what's the difference between A+ and A++?" I'm like, "One more plus." Now, that's not the answer, but the generic one.

State Guaranty Funds

In addition to ratings, there's something called the state guaranty fund. We've talked about rating services in detail, such as AM Best, Moody's, Standard and Poor's, Fitch, Weiss, my friend Martin, and his group down there. They do a good job. But the other thing you need to keep in mind, as well, is that state guaranty funds, Fixed Annuities, which are Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, Multi-Year Guarantee Annuities, Fixed Index Annuities, or Fixed Annuities regulated are approved at the state level, life insurance products. And there are state guaranty funds that back up those products, with the approved products in that state, up to a specific dollar limit per company, per owner. So, you need to look at that, as well.

Making Informed Decisions

But in my opinion, you really shouldn't base your decision on that. You should base your decision on the annuity type you want and that you're considering based on the Claims Paying Ability of that carrier. The rating services help, but we can provide any information you need.

Conclusion

I've written annuity books that you can download for free and write weekly blogs. We're putting out a lot of information that's strictly educational, no sales pitch. We want you to understand what you are considering and what you're going to buy. Obviously, we want you as a client. I am the top agent out here, and I represent all carriers licensed in all 50 states. But before all of that happens, we need to have a conversation. We need to make sure that you're correctly putting the amount of money required and the allocation of the necessary proportion into an annuity that you're not putting too much money into. And you might not even need an annuity, which is fine, as well. We'll tell you that. I will shoot it straight with you. I won't be your friend, but I will be the best advisor you've ever had.

And with that, I'll see you on the next Stan The Annuity Man blog.