Unique Benefits That Annuities Offer
Today, we're going to talk about the benefits that only annuities offer, and there's two unique benefits that we're going to talk about and go into detail and why it matters and why I think it's important as you consider an annuity in your portfolio.
Let's talk about annuity benefits. The first benefit that I want to talk about that's unique to annuities, and I don't know why the annuity industry doesn't promote this more, is the free look period. Annuities are the only financial product on the planet that you can test drive. You literally can own the annuity, have the policy in your hand, and then for whatever reason, or no reason at all, you can get your money back.
Free Look Time Period
Now, the way the free look time period works... Annuities are issued by life insurance companies. They're contracts. Fixed annuities are regulated at the state level and each state has a financial department. It's different for each state, of course. I mean, I wish there was uniformity in the states and that it would just be a certain time period, but it's either 10 days, up to 30 days, from the time you receive the policy.Let's just say you buy a policy from The Annuity Man and I send you the policy. When you receive it, the clock starts ticking. What that means is, in most states, it's around the 20-day time period from the time you receive it to make the decision if you want to keep the policy, period.
Now, what I tell people is when you get the policy, look at it and make sure it's accurate. If you have any questions, I wouldn't suggest calling the agent, other than me of course. I would call the carrier. I would call the company that issued the policy and say, "Okay, I got my policy. Let's go over it. Let me ask some questions as the consumer, and as the person who owns the policy, to make sure that what I thought I was buying, I'm actually getting." I would go through it with that carrier. The person you're going to get on the phone is not going to be some agent or salesperson. It's going to be a very nice customer service person that has no skin in the game other than to tell you the truth about the policy, because what they're going to do is pull up that policy on the screen and answer your questions factually.
Let's just say you were sold a policy that was over-hyped or you were high pressured into signing the paperwork. It sounded too good to be true. And, you call in and you say, "This is what the agent told me," and it turns out that's not how it works. You can ask for your money back and the annuity company will send it to you without question. To me, that's phenomenal. The only key though, is you have to make that request to get your money back if you want to do that within that specific time period for the state. Now, inside of the policy, when it's delivered, there's going to be a sheet of paper in every policy that says, here are the rules for your state. Here's your free look provision. Then take your time for you to understand that you bought what you thought you were going to buy. You can't buy a mutual fund or stock or bond or anything like that and get your money back. But with the annuities, you can.
The Bad Chicken Dinner Seminar
I got a call the other day, someone went to some of the bad chicken dinner seminar, and was pressured into signing the paper. They thought they were getting this too good to be true product. Fortunate enough, they were in that free look time period because I asked them where they're from. I said, "Well, call the carrier, verify exactly what you were told. If it wasn't what you thought you were going to get, then get your money back." That's exactly what happened. The check came back. Now, obviously the agent who sold it to him wasn't happy, but who cares about that? It's all about you, right?
Moving on, let's talk about the second annuity benefit that only annuities offer. That would be lifetime income. Annuities have a monopoly on lifetime income. Unless you work for the government, or are a part of a powerful union that has put pensions for their workers I highly doubt you have a pension. You have to create a lifetime income. There's only one product that does that. That's the annuity category.
Now, annuity started back in the Roman times where the dutiful Roman soldiers and their families were given annuity payments for life. Annuité means payment in Latin. That's the original annuity. Well, you're laying it on the line for your family. You're laying it on the line for yourself. Annuities are the only product that will pay you regardless of how long you live.
You know, I get calls all the time, "Well, what if I live to 130?" They're going to pay. "What if I live to 150?" They're going to pay. That's the transfer of risk that annuities can only provide; it’s longevity risk. It's the fear of outliving your money. Most of us, unless we're a trust fund baby with millions of dollars or whatever, most of us need additional lifetime income. You need that income floor. Social security is a lifetime income strategy offered by the government, backed by the government. But, a social security payment is an annuity payment. How do you get more lifetime income streams? You can only get it from annuities.
So, what are the two unique benefit propositions that only annuities offer? Free look period, which is fantastic. You can test drive that annuity, and you can get your money back if it was sold improperly or you were high pressured etc. If you ask for the money back within that specified period, you get your money back. No questions asked. Then the other benefit is lifetime income. Lifetime income is a benefit proposition that most of us need. With 10,000 baby boomers reaching retirement age every single day, a lot of them are looking for a retirement income, more retirement income, in addition to social security. With that being said, that doesn't mean everybody needs an annuity, but you have to understand the unique benefit proposition.
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.