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The Truth About Hybrid Annuities

Stan Haithcock
February 25, 2024
The Truth About Hybrid Annuities

Hi there. Stan The Annuity Man, America's annuity agent, licensed in all 50 states. I'm so glad to be here today to talk about a topic that, when you saw it, you clicked it so hard, you might've broken the mouse or your touchpad or however you're doing it. You said, "Hybrid annuities? The truth about hybrid annuities? I've heard about hybrid annuities. I want to know about hybrid annuities. I love the word hybrid. I can spell hybrid. What about hybrid? Stan, tell me about it." Boy, I can't wait to tell you about hybrid annuities.

‌What Does Hybrid Mean?

‌Hybrid annuities. Let me get to the point and squash this one like a bug. Hybrid is a plant. Hybrid is a car. Hybrid can actually be a mattress. I saw a mattress company the other day say they had hybrid mattresses. I'm like, huh, that's cool. Hybrid mattresses. What hybrid is not is an annuity. Any person pushing annuities and using the word "hybrid" in front of the annuity they're trying to sell you, how can I put this nicely? They're full of crapola. That's Italian for crap. They're trying to sell you something that sounds better than it is. Hybrid means that it does more than one thing. Most annuities do more than one thing, so I guess you could call them all hybrid, but the fact that this proliferates in the annuity, "Well, I have a hybrid annuity. Stan, I just bought a hybrid annuity."

‌I said, "No, you didn't. You bought a sales pitch that said the word hybrid." And I've almost squashed this to the point where no one uses the word hybrid anymore in the annuity industry because I've gone crazy over it. After all, it's such crap. It's misleading. It's the reason that the annuity industry gets a bad sales reputation because people at the bad chicken dinner seminars or expensive steak dinner seminars or the misleading whatever happens out there. "Well, you need to look at this hybrid annuity, sir. This hybrid annuity." What they're typically talking about when talking about hybrid annuities is Fixed Index Annuities. I don't have any problem with Fixed Index Annuities. Let's get it straight right here. We sell a ton, but we typically sell them as a delivery system for Income Riders when you need income in the future because here's how I sell annuities.

‌The Two Questions

‌First of all, you buy contractual guarantees for what they will do, not what they might do. The will do are the contractual guarantees. And I ask two questions to everybody. I don't care who you are. If you call in and book a call, my team will ask two questions. What do you want the money to contractually do? And when do you want those contractual guarantees to start? Do it again. What do you want the money to contractually do? And when do you want those contractual guarantees to start? If you say, answer the first question, "I want it to be a hybrid," end the conversation because you're not smart enough. You've bought the sales pitch; you swallowed it. When you go to the bad chicken dinner seminar or the expensive steak dinner seminar, I always tell people to swallow the food, not the pitch.

‌My mom in St. Augustine, Florida, 84 years old, getting ready to be 85, walks six miles a day, and is in better shape than all of us. She goes all the time to these annuity steak dinner things. She loves it. She'll call them and say, "What's for dessert? I like a good medium-rare steak, but what's for dessert?" She goes, and then they follow up with her, and she goes, "I forgot to tell you that my son is Stan The Annuity Man." And they're just like Scooby-Doo, like huuuhhh. Scratch on the record. But she goes all the time. Swallow the food, not the pitch, and they will be up there going, "Look, if you own this hybrid annuity here, you get the market upside with no downside, and you get the upfront bonus."

‌Annuity Types

‌If anyone uses the word hybrid in front of annuity, get up and walk out. If anyone uses the word hybrid in front of annuity, hang the phone up. If anyone uses hybrid in front of annuity, eat the food and take your ear things out. Take them out. Don't even listen to them. Hybrid is a plant, it's a car, it's a mattress. It's not an annuity of any type. It's a word agents are misusing to sell typically Indexed Annuities and other annuities. But let's go through hybrid with all annuity types. "Sir, I got a hybrid annuity." Okay, what is it? We've already talked about the Indexed Annuities, but all annuities do multiple things.

‌Multi-Year Guarantee Annuities protect the principal and give you a guaranteed interest rate. Single Premium Immediate Annuities can do lifetime income and joint lifetime income and protect the principal for your beneficiaries. All unused money goes to them. Same with DIAs, same with QLACs. QLACs can also potentially lower your Required Minimum Distribution taxes and use your IRA for and attach your spouse for joint lifetime income. They're all hybrids. So, if they're all hybrids, don't use the word hybrid.

‌And I hate to get on a rant here, but the annuity industry, the self-inflicted wounds from the sales pitches that aren't regulated, is hurting the industry. Because let me tell you this right now. With 13,000 people hitting age 65 every single day, they are looking for contractual guarantees, protecting the principal, and a lifetime income. They're looking for legacy, and they're looking for long-term care type situations. They are looking for contractual guarantees. They are looking to transfer risk. They are not looking for hybrid. They are not looking for sales pitches. They're not looking for too good to be true. They're not looking for that. They're looking for guarantees so they can go live chapter two of their life. So, I declare the word hybrid dead in the annuity industry. Dead. And if anyone pitches you a product and uses the word hybrid in front of the word annuity, I need you to go, "Ha ha ha ha ha" because it's comical.

‌You Don't Have Mulligans

‌I'm surrounded by consultants and people that say, "Stan. You need to say this, Stan." They're going to go, "You shouldn't have gone off on hybrid," but I have to. I have to do it because the calls we get are disturbing, and you cannot make mistakes when choosing products for retirement. This isn't golf. You don't have mulligans; you can't re-hit the ball after it goes in the water. You can't re-buy the annuity after you've locked it in, and you bought the sales pitch, not the guarantees. You can't buy the too good to be true sales pitch. So, when it comes to hybrid annuities, there are none, or they're all hybrid. Either one. In my opinion, there are none. Just remember, hybrid plants, hybrid cars, hybrid mattresses, no hybrid annuities. My name is Stan The Annuity Man. Go to my site, The Annuity Man, and click the subscribe button on our YouTube Channel. I'll see you on the following Stan The Annuity Man blog.

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