Annuity Examples: A Beginner’s Guide to Annuities
Hi there. Stan The Annuity Man, America's annuity agent, is licensed in all 50 states, even including the one you're sitting in that you love so much and you have the flag in the front of your house, the state flag. You have that, right? I don't. I should, though. I don't even know what the state flag of Florida is, but I spend time between Florida and Nevada, so maybe I should have two flags.
What are we talking about today? I digress. Annuity examples, a Beginner's Guide to Annuities. There's so much misinformation, bad information, hucksters, sociopaths, sales pitch nonsense on annuities. It's time to get down to the basics. It's time to start talking about and building the foundation. Let's take an elementary look at annuities from the beginner's standpoint. And by the way, spoiler alert, everything we do here at The Annuity Man is simple. If you can't explain it to a nine-year-old, you shouldn't buy it. No offense to the nine-year-olds, but that's the way I look at annuities. They're simple transfer-of-risk products, but we're going to talk about them today.
Keep It Simple
Let's start with a Beginner's Guide to Annuities at the Roman times. In Roman times, annuities were first introduced as pension payments for the dutiful Roman soldiers and their families for laying it on the line for the empire. That's where they came from. And annuities have been sold in the United States of America for hundreds of years. Hundreds of years ago, most of them were these lifetime income products, Single Premium Immediate Annuities. But when you talk about annuities, there are a few things that drive me crazy.
A good friend of mine, John Olson, who's written so many books on annuities, and I talked to him the other day, and he said something great. He said, "If anyone ever starts a sentence that says, 'Annuities are,'" just using the word annuities. "'Annuities are,' everything past that is misinformation and possibly a lie." There's no truth in annuities are. That's like if I said restaurants are, shoes are. In other words, restaurants are all bad. Restaurants are all expensive. Restaurants are all dangerous. That's crazy talk.
Yet, in the annuity world, annuities are bad. Annuities are all expensive. No one buys an annuity, whatever. Annuities are not worth it. Give me a break. You already own the best inflation annuity on the planet. All of you out there watching this if you have a Social Security number, you own the best inflation annuity on the planet called Social Security. But there are many types.
From a beginner's look at this, many types of annuities exist. Now I've come up with an acronym, PILL, P-I-L-L, that pretty much solves what annuity solves. P stands for principal protection, I stands for income for life, L stands for legacy, leaving money to your heirs when you die, and the other L stands for long-term care, P-I-L-L. You do not need an annuity if you don't need to contractually solve for one or more items in the PILL. Now you're going, "Wait a minute. Wait a minute, Stan The Annuity Man, America's annuity agent, licensed in all 50 states. I was at this bad chicken dinner seminar, but yet it was actually an expensive steak dinner seminar, and that dude or dudette, said agent, said they have an annuity for growth. They have a market growth annuity. They have an annuity that will increase in value with the market and protect the downside." I need you to listen very clearly because this is the Beginner's Guide to Annuities. If it sounds too good to be true, it is every single time with annuities, no exception. What I just explained to you in a very bad sales pitch form that you're going to hear from a lot of people is an Indexed Annuity. It's a CD product introduced in 1995 to create CD returns. But the hope and dream, the back-tested numbers, and the unicorns chasing the butterfly sales pitch is that you can have your cake and eat it, too. You cannot.
In the world that I live in, which is the world that you need to live in when it comes to annuities, and even thinking about annuities for your portfolio, you buy an annuity for what it will do, not what it might do. You buy it for the contractual guarantees, not the hypothetical, theoretical, back-tested, hopeful agent unicorn chasing the butterfly return scenario.
Primary Types of Annuities
Let's go through some primary types of annuities that are out there. So once again, you can't say "annuities are" because there are many types of annuities. I love when people call me. I had a call the other day, and he goes, "Well, I just want to talk about annuities." And I'm like, "What type?" "Well, just annuities." "What type?" One of the other things that I do is ask two questions. What do you want the money to contractually do, and when do you want those contractual guarantees to start? Keyword contractual, not hypothetical, not might, not this that and 10 years ago, all that stuff.
Going back to the PILL, principal protection, income for life, legacy, and long-term care. Let's do some principal protection products. That would be a Multi-Year Guarantee Annuity, MYGA, the annuity industry version of a CD. Also, Fixed Indexed Annuities, annuity industry version of a CD, as well. Principal protection products are Fixed Annuities, okay? The I, income for life. There are four primary annuity types, Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and then Income Riders, attached to some Deferred Annuities.
All those can be set up to pay for as long as you are breathing. The legacy products are Deferred Annuities, where you can attach a rider, and let's talk about riders. Rider means it's riding on top of the policy, and there's a guarantee that you're buying that rider for. You can buy a legacy rider, meaning that if you can't get life insurance, which is the best legacy product on the planet, you can attach a guaranteed issue, a legacy death benefit rider, to a Deferred Annuity. And then the last one, long-term care is really a health insurance product, but there are annuities for long-term care.
A Beginner's Guide to Annuities is pretty basic. Now, I've done a few videos to help with that. I don't know how many, six, 800, 700. I lost count. But if you go to our Stan The Annuity Man YouTube page, you can hit the playlist, and you can choose the annuity type that you want to learn about. There are tons of videos. Also, on our site, we have PDF downloads of six very good annuity owners manuals you get for free and under no obligation, and no one's going to call or show up at your doorstep.
I'm here to educate, I'm here to edutain, but if you're starting the process of learning about annuities, you have landed at the right spot, The Annuity Man, the top educator and the top seller of annuities on the planet. I'm here to educate you first because you're going to make your buying decision on your terms and timeframe from us. We'll take care of everything from start to finish, but there's never an urgency to buy an annuity. The urgency is for you to get educated and understand what you are buying, the contractual guarantees of the policy.
So, it's a good start. I'm glad you joined us today. Go to my site to get started with all the free education that we provide, and I'll 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.