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Who Sells Hybrid Annuities?

Stan Haithcock
December 7, 2023
Who Sells Hybrid Annuities?

The question is, who sells hybrid annuities? Let me rephrase that. Who sells Indexed Annuities? The word hybrid is overused in the industry to sell Indexed Annuities because they're Indexed Annuities. I don't know why they're creating another word. Oh, by the way, I'm Stan The Annuity Man, if you hadn't caught that, America's annuity agent. I've written 6 books on annuities, and I'd love to get them to you for free. Click on this link to download all 6 books now. But let's dig in a bit about this hybrid nonsense and discuss Indexed Annuities and who sells them. It seems like everybody does because if you move, breathe, and have a bank account or an IRA, somebody will try to sell you an Indexed Annuity, right? Typical square peg into a round hole. Let's talk about you not buying that square peg into a round hole and see if we can find a fit for you for an Indexed Annuity.

‌The Word Hybrid

‌Who sells hybrid annuities? Stan The Annuity Man, but only if they're appropriate and suitable for you. So, let's talk about the word hybrid; it's driving me crazy because everyone's using it. They don't have to sell Indexed Annuities. Most of the time, people who are talking about hybrid annuities are really trying to sell you an Indexed Annuity. Hybrid means it does multiple things. I mean, I used to have a car, used to have a Honda Insight, one of those. It's a hybrid car. It ran half the time on a battery and half the time on gas and got 68 miles per gallon, or some crazy number like that. That's a hybrid, right? Hybrid's a mattress. I saw a hybrid mattress the other day. Hybrid's a plant. Every single annuity on the planet has multiple benefits, every single type. Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, Variable Annuities, Indexed Annuities, Multi-Year Guaranteed Annuities, and charitable gift annuities.

‌Who Sells Them?

‌They all have multiple benefits so don't get sucked into the sales pitch. As I always tell people, there are no perfect answers to annuities, just a bunch of bad sales pitches. Nod your head, right? So, hybrid, who sells them? Everybody sells them. The banks sell them. Now, the brokerage firms are selling them. Obviously, independent agents. The top one in the country here, licensed in all 50 states. America's annuity agent sells them. But I typically use Indexed Annuities as a very efficient delivery system for an income benefit called an Income Rider, which is a future guarantee for income down the road, and you decide when you want to take that payment. That's an efficient way to do that, besides Deferred Income Annuities, but I don't get caught up in the index story like you might have. Have you? Have you been pitched that market upside with no downside? Did they say that, or did they say stuff like market participation? Or did they show you back-tested numbers that if you had owned it 10 years ago, you'd have made this amount of money? I really believe that back-testing numbers should be illegal, in my opinion. I mean, that's like saying to me, "You know what, Stan? If you would've done 100 sit-ups a day, every day, for the last 10 years, you'd have six pack abs. You think? I mean, hindsight's 20/20. I don't think you can look at the past because the past had different interest rates and blah, blah, blah. You just can't. I don't like that.

‌As a good friend of mine in the industry who is a leader, she is a leader in the Indexed Annuity side. She always said, "I've never seen a proposal come true with Indexed Annuities." Now, she's more of a proponent of them, and I genuinely believe that they do fit and have their place in some people's portfolio, but she's right. All these proposals and back-tested, hypothetical, theoretical, projected, hopeful agent return scenario numbers are pie-in-the-sky fantasy nonsense.

‌It's a CD Product

‌Everyone's selling Indexed Annuities; it's the hottest product in the annuity world, but, at the end of the day, it's a CD product. In 1995, it was put on the planet to compete with CDs, and historically, that's what it does. But in my world, it's a delivery system for what's called an Income Rider, which is a future benefit for lifetime income.

‌Again, who sells Hybrid Annuities and Indexed Annuities? Everybody on the planet. I mean, if you ever wondered where the X timeshare salespeople went, no offense to those who were X timeshares salesmen, but that's a good example. Or, X car salesman, no offense to you guys either. They're selling Indexed Annuities; they're trying to sell Hybrid Annuities. As you can imagine, the commissions on indexed hybrid annuities, as they're calling them now, are high. It doesn't mean that they're good or bad because annuity commissions are built into the product. You never see it, even though it comes from the company's reserves.

‌Client Example

‌You'll see the net amount you put in on your statement, but too many people selling them are using them as the too-good-to-be-true product. And, regardless of your situation, they're saying, "Hey, you need an Indexed Annuity." A guy called me the other day, and he needed income starting, say, within a year. Because I always ask people, "What do you want the money to contractually do? When do you want those contractual guarantees to start?" He answered, "I need a lifetime income stream, and I need to start it in about six months." Okay. Those two answers completely eliminate every single product on the planet except Immediate Annuities. Period. End of story. The judge hits the gavel. It is what it is, but what was he being sold by everybody? They were trying to put a square peg into a round hole, selling him an Indexed Annuity with an Income Rider, even though the income would start six months from now. Complete and utter garbage, as they say in France. I couldn't believe it. Yeah, I actually could. Why was that happening?

‌Unfortunately, an Immediate Annuity commission might be one to 2%. Indexed Annuity commissions might be 6 to 9%. I'm not saying that's the driving force, but many things are happening out on the field, with agents trying to fit square pegs into round holes and not listening to the client. Indexed Annuities have their place. If you don't want to attach a rider and just want a CD-type return in combination with maybe a MYGA, then Indexed Annuities work.

‌Annuities Are Contracts

‌Hybrid as you typed in and said, "What's a hybrid?" They also work for the Income Benefit Rider, which you can attach as well. Just avoid falling for the hype of the word hybrid. The word hybrid doesn't make it better; it's still a contract. All annuities are contracts. You have to understand what the contract does and own an annuity for what it will do, not what it might do. Remember that. So, you have to ask yourself, who calls themselves Stan The Annuity Man? What person on the planet would actually choose the financial curse word of annuities and then base their whole business model around that? And then, create logos with Stan The Annuity Man, even though it's a financial curse word. Well, I'm actually smarter than I look; I promise you that. I didn't plan to become Stan The Annuity Man. I was named after Stan Musial, the baseball player. If you're older, you know that.

‌About Stan

‌Of course, I didn't play baseball. I'm a contrarian; I played college basketball a long time ago. But here's how Stan The Annuity Man came about, and it all came about this hybrid crap, this Indexed Annuity crap. I'm driving down the road. I had left the securities business. I was a stockbroker long ago and did many things for major firms. I'd had my fill of that, and I was just hanging out, trying to figure out what the next step was. Somebody was on a local radio show in the early morning or Saturday morning, and they were talking about Indexed Annuities, hybrids, and all this stuff. And I listened to it, and I went, "What? None of that's true." I mean, they literally were selling the sizzle, not the steak, and they were using the word hybrid, etc.

‌So honestly, I guess I have the word hybrid to thank for Stan The Annuity Man coming out into the hinterlands of the annuity world and becoming America's annuity agent. It all started because people were over-hyping this product. I wanted to address that, and that's the reason I'm doing this blog: hybrid's a plant, hybrid's a mattress, hybrid's a car. Don't believe the hype, as the rapper said, but that's how Stan The Annuity Man started. What I did was I called that radio station, and I completely filleted those people like flounders. I drilled them factually and they didn't know what to say. People heard that, and some people knew who had called in. And so, they called me and said, "Hey Stan, can you look at my annuities?" That was a long time ago, and now, here we are, licensed in all 50 states, but it all started over this nonsense hybrid stuff, and that's a true story.

‌Now, with that, you can get quotes at The Annuity Man anytime you want. Also, if you can, do me a favor and subscribe to Stan The Annuity Man's YouTube Channel to grow the juggernaut of fun and education. If you want to download all 6 of my annuity books, you can easily click on this link to download them for free. Thanks for joining me today, and I will see you on the next blog.

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.

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