Single Premium Immediate Annuity Quotes
Hey, Stan The Annuity Man, America's annuity agent, here to answer your question about Single Premium Immediate Annuity quotes. You're looking for a pension annuity. So, there's really just one place to go, obviously, stantheannuityman.com. You can get quotes for free with no obligation.
But what I want you to do is hang in there with me because I'm going to go through the structuring of Immediate Annuities. I will talk to you about the book I've written on Immediate Annuities that you can download for free.
Let's talk about Single Premium Immediate Annuities in general. Pension annuities started in the Roman times. Yes, the Roman times. That's how old they are. They're transfer risk products, and they're based on your life expectancy at the time you take the payment. It's not interest rate driven. Secondarily, it's interest rates. Primarily, it's life expectancy. People say, "Well, rates are low down. I can't buy an Immediate Annuity now."
You Can't Time It
Well, here's the one thing I'm going to tell you. If you're trying to time your Immediate Annuity purchase, forget about it. You can't do it. It's like nailing Jello to a wall, and you can't do that either. Why do you say that? It's life expectancy driven, remember? At the time you take the payments, interest rates play a secondary role.
But if you wait to buy the Immediate Annuity, you have to factor in those payments you missed if you bought the Immediate Annuity now. So, when you start running the quotes with us, keep that in mind. That's not some veiled sales pitch. That's just reality. I'm brutally truthful about these products. That's why I'm Stan The Annuity Man, America's annuity agent.
Your Structuring Choices
So, we're going to look at Immediate Annuities from what they are and some of your structuring choices. And remember, all payments are a combination of Return of Principal. That doesn't mean ROP; that's Return of Principal plus interest.
You're saying to yourself, "Wait a minute, I'm giving my money back plus interest?" Yes, that's an Immediate Annuity payment. And oh, by the way, regardless of the type of annuity you have for lifetime incomes, DIA, SPIA, QLAC, or Income Rider, doesn't matter. It's a return of principal plus interest.
If you have non-qualified, non-IRA money, you will only pay taxes on the interest part. If it's inside an IRA, tax is on all of it because it's coming out of an IRA. So, that's the basics. Life expectancy at the time you take the payment as the primary pricing mechanism, but you can structure it in a myriad of ways. You can do life or joint life.
If it's joint life, it's based on life expectancies. And typically, that younger person, especially if it's a female versus a male, the payments will be a little bit lower because the females, ugly plot out there, you're going to live longer than us, right? Nod your head.
Life Only and Joint Life Only
So, here's how you structure them. There's a myriad of ways. You can do life only or joint life only, and that's when your Learjet hits the mountain, money goes poof, and the evil annuity company keeps the money. You don't have to structure it that way. A lot of people think that's the only way. It's not.
Joint Life With Installment Refund or Cash Refund
You can do a joint life with installment refund or cash refund. What does that mean? What that means, what installment refund means, is that it will pay you for your life, or joint life, but when you die, your beneficiaries will get the same payment per month until the money's gone.
Cash refund means that life, or joint life with cash refund, you die. Okay? If it's joint life, if one of you dies, the money continues uninterrupted and unchanged. But when the second spouse dies, cash refund means the beneficiaries get the lump sum. Either way, the evil annuity company doesn't keep a penny of the money.
A couple more that you need to be aware of. Period certain means that you can say I want a 10-year or a 20-year or 30-year period certain or 17-year, whatever. It's customizable. And that means it's going to pay for that specific period of time, and then after that specific period of time, it's over. Why would you do that? Income flooring, filling an income gap. Remember, it's still a return of principal plus interest. Or you could get fancy and say, hey, I want to do life or joint life with a period certain. You can combine it.
Here's an example. A person has a life with a period certain of 20 years. They get five years of payments, die, and then there are 15 more years of payments for the beneficiaries. Or let's say it's life with a 10-year period certain. They live three years, die, and then there are seven more years of payments. Or if they live 11 years with life with ten years certain, then there's no money left.
The bottom line, and I'm not going to get caught in the weeds here, but we can customize the quote. Remember the two questions: what do you want the money to contractually do, and when do you want those contractual guarantees to start? And then after that, I'll say, tell me about the beneficiaries and how you want the money to go to them when you die.
A guy called me the other day, and he said, "I can't decide between joint life with installment refund." He and his wife were getting a guaranteed income stream. They're filling the gap. What we did, actually, was we reverse-engineered the quote. They needed $2,700 monthly for both lives to fill in the income gap combined with Social Security and a pension. So, we did that, and that's an excellent way to buy these Immediate Annuities and get an immediate annuity quote, which is what you're looking for.
But here was the situation. They said, "Should we get joint life with installment refund, or should we get joint life with cash refund?" Well, go over those again. Joint life with installment refund means when both die, the money goes to the beneficiaries in payment form until the money's gone. Joint life with cash refund is when they both die, and the money goes to the beneficiaries in a lump sum.
Which one's better? There's no perfect answer. The joint-life with installment refund is typically a higher payout. Why? Because the annuity company keeps the money. It just makes sense. But in this situation, I said, "Okay, tell me about your kids." And I've got 20-somethings, and they're finding their way in life. And he was like, "Well, my kids are terrible with money." I'm like, "Well, you might want to do an installment refund." My joke is that your kids will come to your funeral in a Ferrari anyway; you want them to make payments on it instead of buying it with a lump sum.
That was the defining moment for him. He goes, "Okay, forget cash refund. We're going to do joint life with installment refund, and at least we know they won't blow all the money at once." And that's what he decided to do.
I do a lot of blogs and videos. You probably know I put one up every single day. I did a video recently, and it was actually on this subject and talked about the best Single Premium Immediate Annuity payouts, and how to go about doing that. Remember, you can go to my site and get your quote there.
But remember the book? You can download my SPIA owner's manual and my five other annuity owner's manuals for free! And how do you get that? You can click this link, fill in some basic information, and download it immediately. And if you want to connect with us, go to our website and we will help you in any way we can. Thanks for joining us. 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.