Annuity Zero Is Not Your Hero

Today’s myth to squash? The phrase, “Annuity Zero Is Your Hero.”

You’ve probably heard it before from Johnny Appleseed agents at bad chicken dinners or overpriced steak seminars. Some of them even write books about it. But let me be clear right from the start: zero is not your hero. Not now, not ever.

Where This Myth Comes From

When agents say “zero is your hero,” they’re talking about Indexed Annuities—specifically Fixed Index Annuities.

Do I have a problem with Indexed Annuities? No. Do I love them? Also no. They have their place, but they’re often misrepresented. At The Annuity Man, we use Indexed Annuities as efficient, cost-effective delivery systems for Income Rider contractual guarantees.

Because that’s what annuities are really about: contractual guarantees. You own them for what they will do, not what they might do.

That means focusing on the P.I.L.L. framework—

• Principal protection
• Income for life
• Legacy
• Long-term care or confinement care

If you don’t need to solve for one of those, don’t buy an annuity.

Why “Zero” Isn’t a Hero

The sales pitch sounds good: “You’ll never lose money! If the market crashes, you get zero instead of a loss!”

But here’s the problem. If it were really that good, do you think companies like Goldman Sachs or Morgan Stanley wouldn’t dump billions into Indexed Annuities? They don’t because the story sounds better than the reality.

Indexed Annuities can be useful, but they’re not designed for market growth. If you truly want market returns, invest in stocks, bonds, ETFs, mutual funds, crypto, or whatever fits your risk tolerance.

If you want guaranteed growth, then buy a Multi-Year Guaranteed Annuity (MYGA) instead. A MYGA is the annuity industry’s version of a CD. It gives you a guaranteed interest rate, and there’s never a “zero” year.

Why Agents Push “Zero”

Here’s the dirty little secret: the reason “zero is your hero” gets pushed so hard is because Indexed Annuities pay high commissions.

That’s why you’ll hear words like “potential,” “hypothetical,” or “theoretical” tossed around at seminars. They’re selling hope, not guarantees.

The truth is there’s no guarantee of market participation or long-term growth. On a 10-year Indexed Annuity, you might get one or two strong years before the company adjusts caps and spreads. The average return over time usually matches a CD, or maybe a touch better if the stars align.

So no, zero isn’t your hero. It’s a clever line used to sell products that don’t perform the way they’re pitched.

The Market vs. Guarantees

If someone tells you that you can get market upside with no downside, that’s only half true, and the market side is never guaranteed.

Here’s the simple rule:

• Want market returns? Be in the market.
• Want guarantees? Buy annuities.

Never confuse the two. Annuities aren’t investments, they’re insurance contracts. You buy them for the guarantees, not the “what ifs.”

My Mom and the Seminars

I’ve said it before, but it’s worth repeating. My mom, who’s 86 and lives in St. Augustine, Florida, loves those free dinner seminars. She goes twice a week. She’ll call me and say, “Stan, that zero-is-your-hero thing sounded great!” And I’ll tell her, “No, Mom, that’s not true. Don’t buy into that.”

Enjoy the dinner, but don’t swallow the pitch. Those seminars are designed to sell high-commission products, not educate you.

The Bottom Line

I’ve spent my career debunking myths like “zero is your hero.” Indexed Annuities can serve a purpose when used correctly, but they are not stock market alternatives.

If you want market returns, invest in the market. If you want contractual guarantees, contact us at The Annuity Man or call 800-509-6473. You might get me, or you might speak with one of my licensed team members, all based in the U.S., all licensed in all 50 states.

Remember this: Annuity zero is not your hero.

If you take nothing else from this, take that.