Retirement Expert Rants: Annuity TV Ads

Hi, I'm Stan The Annuity Man, America's annuity agent. What am I ranting about today? Annuity TV ads. And that doesn’t mean just from annuity people, but from non-annuity people as well. Let’s start with the non-annuity folks for a second. The people out there who say, “I hate annuities. You should never buy an annuity. You should die before you buy an annuity.” Do these people not understand that Social Security is an annuity? Of course, they don’t. Or they’re hypocrites, or they’re just trying to sell something. And I hate that. Let’s be honest in the retirement space. People can handle the truth. And when you say, “I hate all annuities,” it’s like saying, “I hate all trucks. I hate all restaurants. I hate all shoes.” It makes no sense. Especially when every single U.S. citizen with a Social Security number already owns an annuity. It’s called Social Security. And you’re like, “No, that’s not an annuity.” Yes, it is.

Social Security is an Annuity

So, what does your Social Security payment do? It pays you for life. You can never outlive it. Sound familiar? Yeah, it’s an annuity. What’s a pension? Do you hate all annuities? Do you hate all pensions? What’s a pension? It’s an annuity—a payment for the rest of your life. So, this “I hate annuities” crap is total nonsense, especially when every single person in America with a Social Security number already owns an annuity.

Annuity Industry Ads

Let’s get to my friends in the annuity industry and let me do a disclaimer: I’m sure their wives and families are great people. They make excellent chocolate cake and peach cobbler, and they’re very nice. But these ads are complete and utter garbage. Let’s go over the first one that drives me crazy. I travel all over the country. I’m licensed in all 50 states. I have clients everywhere. But the one that really gets on my nerves is the guy who stands up there, never mentions the word “annuity,” but shows this inflated chart that looks great and says, “We can get you market returns.” He talks about a special strategy that only he came up with to combat market volatility.

And you can protect your principal and get market returns, but they never, ever, ever say the word “annuity.” How is that even possible? How does the annuity industry allow that to happen? So, when you call, surprise, surprise, it’s a freaking annuity. Wouldn’t you start with, “Hey, I have an annuity, and it does this”? Why do we have to do the bait-and-switch all the time?

The Bait-and-Switch Problem

People call in and ask, “I saw this thing on TV. It sounded fantastic. What is it?” Then they have to say, “Well, it’s an annuity.” Eventually, they admit it’s an annuity, I guess. But why does this bait-and-switch need to happen?

Index Annuities and Common Misunderstandings

Now, let’s talk about Index Annuities. Does Stan The Annuity Man hate Index Annuities? Of course not. They’re not a “too good to be true” product, but they’re pretty darn good if you understand what they do. They offer CD-like returns and are an efficient way to deliver Income Riders. But they’re not too good to be true. They’re not unicorns chasing butterflies, and they’re not planets aligning. If it sounds too good to be true, it is. Every. Single. Time.

When you see ads saying the market’s volatile, with people turning over statues and burning things down, and then some guy shows up saying, “I’ve got a product that can get you market returns with no downside,” you need to be smarter than that. You cannot be that gullible. You can’t be the rube at the table, as they say in Vegas, because if you are, they will sell it to you.

The Infomercial Scam

And then there’s my favorite one—the annuity infomercial. Again, I don’t know these people. I’m sure they’re nice folks, and I’m sure their families are fantastic. But what they’re doing is misleading people. When you’re selling Fixed Annuities, they’re regulated at the state level. But when you run a national TV ad campaign, which state will enforce it? I don’t know. You’d think the annuity industry would regulate it, but there’s no centralized Fixed Annuity body to step in and shut it down. Some carriers are unhappy with this and have gone to these people to say, “Be honest. Tell them what it is. Don’t fluff this product up.”

But most of the time, it’s the Indexed Annuity product getting a bad rap because some bad actors are spending a lot of money promoting it. Why? It’s a good story, but the story isn’t always true.

Misleading Ads and the Truth

So, the guy in the infomercial sits down and talks very scholarly about annuities, market upside, and market volatility, scaring the viewer half to death. But, of course, they have the solution. They’ve made up some product names that mean nothing and claim they will solve all your problems. What are they really selling? Fixed Indexed Annuities. And typically, when you call in, they send you a brochure and then farm you out to a local agent who pounds you until you buy it. That’s garbage.

Transparency and Honesty

One of the things I’m most proud of on my site is that I tell people, “This is where annuities are bought, not sold.” People often say, “Well, annuities are sold, no one buys them.” Bull crap. I’m the number one agent in the country. People buy annuities because we show them all the information. We tell them the truth—the good, the bad, the limitations, the ugly, the perfect, and the non-perfect. We tell them everything, then leave them alone to decide on their terms and timeframe. These infomercial guys, it’s just a lead mill. People call in, they farm the leads out, and the agents go crazy selling one or two products.

Annuities Are Commodity Products

Remember this: annuities are commodity products. If an agent says, “I have the annuity that’s best for you,” and they’re only showing you one product, run. Many TV personalities pushing these products have deals with carriers to promote certain products. They’re going to show you one or maybe two products. If they’re not quoting all carriers for the highest contractual guarantee based on your specific situation, be cautious.

Conclusion

So, when it comes to annuity TV ads, there are two types: the non-annuity salesperson who trashes annuities (insanity) and the annuity agent who does not even mention the word annuity. Then, there’s the Mr. Scholarly guy who says, “I figured it out,” and names some product out of thin air, which turns out to be a Fixed Indexed Annuity. They’re putting a bad name on a good product.

The annuity industry is earning its bad reputation by allowing this nonsense. If these guys were brutally honest, they’d sell more, have better clients, and people wouldn’t feel like they’ve been taken for a ride. I believe the public can handle the truth. People are smart enough to know when they’re being sold something.

As an industry, we need to clean this up. It doesn’t have to be like this. I’m calling on the leaders in the annuity space to stop this nonsense and coach these people into making legitimate, honest, straightforward, and transparent ads.

I’m Stan The Annuity Man. Thanks for listening.