020: What Do Annuities Contractually Solve For?

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welcome to

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fun with annuities with your host me

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stan

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the annuity man america's annuity agent

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can annuities be fun

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can contractual guarantees be fun

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absolutely they can find out the brutal

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facts about annuities

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with no sales pitches or high pressure

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nonsense

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just the brutal and factual annuity

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truth which is all you need to hear

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let's have some fun with annuities and

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let's have that fun start

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right now

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hey this is stan the annuity man

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america's annuity agent licensed in all

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50 states clients in all 50 states and

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hopefully

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you're either one of them listening out

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there in the hinterlands

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or you're thinking about being a client

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of the annuity man we would

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certainly love to speak with you and see

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if an annuity strategy is appropriate it

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might not be

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but we certainly would like to run the

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quotes and have the conversation and at

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least

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dig in to see if that that makes sense

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for you and your specific situation

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so today's topic is what

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do annuities contractually solve for

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how about that i mean everybody's got

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selling it out there has their favorite

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annuity right

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not me i don't i'm trying to figure out

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hey if you need one and b

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if you need one then what type and then

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c

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you know let's go contractually solve

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for that looking for the highest

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contractual guarantees

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it's pretty basic i've kind of stripped

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this whole thing down into

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the simplistic view of annuities and i

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think it's the right way to do it

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i think eventually you're going to be

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able to shop

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and buy them yourselves without an agent

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right now at the time of this

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podcast you've got to use the agent

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sometime in the process

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just by law now what i've done on my

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site the annuityman.com

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is i give you two choices on how to shop

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you can

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choose to shop with the annuity man and

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my annuity experts and there's not a ton

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of them there's a handful

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because they have to go through some

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rigorous filters by me

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because everything that i do my hands

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all over it

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there's nothing i'm farming out i'm

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looking at every single case every

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single thing

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and making sure that we're doing it the

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right way so with the annuityman.com you

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can have a

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in essence an annuity advisor personal

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one-on-one

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you have you can talk to we can put

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together customized plans and

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even if you're not speaking with me most

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of you will but even if you don't

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i'm looking at what you're doing believe

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me i'm signing off on it because i'm

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gonna have to sign the paper at the end

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of the day

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i'm signing the application with you or

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you can go to annuities.direct which i

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also own

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[Music]

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and that's for the people that want to

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do it yourself and and

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get their own quotes on their own terms

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and run the quotes and

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shop around and not talk to anybody

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which is fine and then at the end of the

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day

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they don't want to engage unless they're

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at the finish line and they need to

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engage and make sure that they're doing

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the right thing and make the right

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decision

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so the annuityman.com and then within

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the annuityman.com annuities.direct

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either way you can shop on your terms in

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your time frame

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and that's the way that i think it

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should be done and because of that

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that's the way i designed it

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so you know the question you know what

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do annuities contractually solve for

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the first thing you need to understand

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is annuities are contracts they're not

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investments and i know i get a lot of

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pushback from the industry about that

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and from people that

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sell variable annuities etc and and they

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have their case

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but if you don't believe annuities or

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contracts buy one

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and they call it a policy you can call

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it a policy i'll call a contract you're

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going to get a contract an annuity is a

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contract

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between you and the issuing life

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insurance company

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period it doesn't matter what type you

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get

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fixed indexed annuity multi-year

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guarantee annuity single premium

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immediate annuity

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deferred income annuity qualified

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longevity annuity contract

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variable annuity doesn't matter you're

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going to get a policy in the mail it's a

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contract

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so in my opinion if you're buying a

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contract you should be

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owning the contractual guarantees you

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should be making the decision

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the decision to buy solely on the

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contractual guarantees and i will cover

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how that applies to indexed and variable

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annuities in just a second

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by the way and just for the record i

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don't sell variable annuities i'm not

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giving advice on variable annuities i

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don't give

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that type of market advice i sell

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contractual guarantees i sell fixed

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products that

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you know for what they will do not what

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they might do i'm not down on variables

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they were put on the planet in 1955

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for tax deferred growth and in some

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cases that does work

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i do like some of the no loads out there

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but still

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even the no loads have limited choices

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and i think if you want market growth

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you don't need limited choices so let's

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go through kind of what did they

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contractually solve for

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i used two questions i asked everybody

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what do you want the money to

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contractually do and when do you want

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those contractual guarantees to start

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from those two answers i can then point

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to what annuity type works

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and then i use an acronym called pill p

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stands for principal protection i stands

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for income for life

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l stands for legacy the other l stands

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for long-term care so i'll do it again

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[Music]

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p is principal protection i income for

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life l

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legacy you know leaving money to heirs

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and the other l long-term care

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notice there's no g there's no growth in

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there there's no it's not pill g it's

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not g

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pill and the reason is like i just

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previously said

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market growth should have no limitations

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and

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any type of annuity that's promising

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market growth has limitations

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especially the indexed annuity side that

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is a product that was developed in 1995

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to compete with cd returns it's in

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essence a

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an enhanced cd product and there's

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nothing wrong with it i

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like that product if people understand

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that

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you know it's not too good to be true so

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the question is stan

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the annuity man is if i buy

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an index of variable annuity how do i

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buy it under

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the guise of contractual guarantees well

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you buy it for the contractual again

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what's the contractual guarantee

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of those policies in other words what's

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the worst case scenario

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of those policies whether they're

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stand-alone policies with no writers

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attached

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or if you attach writers which are

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writers in the annuity industry english

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please stand writers means

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attached benefits at the time

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of application most writers to

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policies like indexed and variable

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annuities

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are what's called income riders which

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are lifetime income guarantees that you

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can

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start at a future date in essence that's

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what they are

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so in my opinion that's what you should

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base your

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decision on so for the indexed annuities

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that i

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sell and recommend i'm recommending them

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solely on

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the contractual guarantees of that

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income rider period

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we're not looking at the accumulation

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value at all in fact you want a visual

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here's the visual

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draw a line down the blank sheet of

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paper visually or do it just

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grab a piece of paper left-hand side is

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the accumulation value side that's the

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walk-away amount that's the investment

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side

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and then right-hand side is the income

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rider side which is the guaranteed

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income at a future date you know to the

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penny at a future date what your

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guaranteed income will be

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here's what i do with people all right

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you have the two columns

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draw a huge x on the left hand side

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which is the accumulation value

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just draw an x through it what that

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means is we're not going to talk about

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that

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it doesn't matter what happens over

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there could care less we'll throw a dart

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at it

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what i care about are the contractual

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guarantees of the policy and that's the

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right hand side of that ledger

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and by the way when annuity companies

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design these products

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and you attach an income rider to them

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or death benefit writer which is

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could be a combination income right or

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death benefit writer

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that rider side when you draw that line

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down the middle of a page that right

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hand side of the ledger

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typically is not typically but pretty

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much always

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is higher than the accumulation value

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side

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i know there's somebody going to hit me

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with some exception but i'm saying

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most of the time and annuity companies

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design it that way so that

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right-hand side of the ledger is higher

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than the left-hand side meaning that if

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you wanted to cash in that annuity

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the income writer is not fungible it's

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not it's not cash you can't cash it in

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you're going to get the accumulation

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side the side you just axed out

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the side that i don't care about the

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side that i'm not making my decision on

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so annuity companies do that for a

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reason that the right-hand side of the

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ledgers are going to be higher why

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because if you want to

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access that benefit you have to stay in

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the policy it's smart it's good business

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it's not

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nothing to blame the annuity industry if

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i was a carrier i'd do the same thing

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i'd make sure that that right-hand side

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of the ledger

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that monopoly money phantom account

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income rider side

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is higher than the accumulation

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walk-away amount

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just makes sense so that's the way that

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i would go about it in my opinion a

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perfect world

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qualified longevity annuity contracts

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should be the number one selling

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product on the planet what do they solve

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for they saw for future income using

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traditional ira

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assets or 401ks if you're 401k or 43b or

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whatever

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is participating and offering those

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there's so much money in traditional

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iras that

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everybody that has one should at least

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quote a cue lag now

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you know great story i had a gentleman

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called the other day and say hey i don't

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want to cue lack i could

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i could care less about future income

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and i said you know you're right

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but how about setting it up so that you

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can add your spouse with the qlac

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even though it's your personal ira you

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can add a spouse

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for joint lifetime income why wouldn't

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you just add your spouse and that be

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somewhat somewhat

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of a legacy for you even though you

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don't need income but when

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you die when your legit hits the

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mountain then your spouse gets that

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lifetime income stream and they did that

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and a lot of times i'm seeing a lot of

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qlac sales based on

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that type of emotion which is taking

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care of your spouse or partner

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so what i would warn you out there

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in the annuity bad chicken dinner

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seminar hinterlands

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is to be careful when people start

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throwing phrases around like hybrid

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i have a hybrid annuity i have annuity

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that does it all

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i have an annuity that gives a bonus and

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it has market participation and it has

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confinement carry it has long-term care

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and it has it has everything

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it's got every little whistling bill on

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it in my opinion

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when you solve for a specific goal

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whether it's income or

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legacy or long-term remember the pill

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principal protection income

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legacy and long-term care remember

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when you solve for that you solve for

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one at a time

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there's not one product that does it all

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even though everyone's trying to either

11:03
design it or sell it

11:05
you're better off and you're going to

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get a higher contractual guarantee by

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going at

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each part of that pill individually so

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if you said okay

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i want the best legacy income writer

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death benefit writer then let's go shop

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for that or

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i want the best confinement care writer

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attached to an index

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okay great let's go shop for that or hey

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i want the best

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income writer for future income okay

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great let's go shop for that

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individually now that's not some

11:35
employer for you to buy four different

11:37
annuities

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the point i'm trying to drive home is if

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you're going to buy an annuity for a

11:41
specific solution

11:43
principal protection income for life

11:44
legacy or long-term care

11:47
confinement care then go shop for that

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specific

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goal and go find the highest contractual

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guarantee for that specific goal

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now at the bad chicken dinner seminar

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they're going to say well this one does

11:59
it all it's a hybrid

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listen hybrid's a car hybrid's a plant

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and i even saw the other day on us on an

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ad hybrid can be a mattress of all

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things

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hybrid's not an annuity people call me

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all day what's the best hybrid you have

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and i say currently i think it's toyota

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but i think honda's real close

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joke but i'm serious

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when people throw the word hybrid around

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they're trying to play word games and

12:25
semantics i really think

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the industry should shut that down and

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they have a lot there's recently a tv ad

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i saw

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and some agent threw the word hybrid out

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it was a national ad

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and the next time i saw it he wasn't

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using it i'm assuming

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somebody at the carrier smacked him down

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and said would you please stop

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or the person that runs the ad that

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never mentions the word annuity

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and just mentions all the benefits you

12:51
know it'll do this and do this and do

12:53
this and never mentions the word annuity

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i mean one of the reasons i call myself

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stan the annuity man and the

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site is the annuityman.com is

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we're not hiding from this annuities

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have benefit propositions that no

13:06
other products have the one monopoly

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that annuities have that no other

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product has

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is it guarantees a lifetime income

13:13
stream for as long as you live

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period there's no roi until you die

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it's the only one that does that the

13:19
other thing that annuities have that no

13:21
other product has

13:22
is you can test drive it and get your

13:24
money back after the policy has been

13:26
issued within a free look time period

13:28
that's phenomenal come on now

13:31
so you know when you're looking at

13:33
annuities annuities are contracts

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so you have to say okay what do they

13:38
solve for primarily

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and if you don't need to contractually

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solve

13:43
for principal protection income for life

13:45
legacy and long-term care

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then guess what you do not need

13:50
an annuity of any type period

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end of story end of sentence which is

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what drives me crazy about the bad

13:58
chicken dinner seminar circuit

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if you're a living breathing human being

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that has a bank account you're getting

14:03
these things in the middle that

14:04
come to this steakhouse or whatever you

14:07
know

14:08
restaurant and hear the presentation of

14:10
how markets are going to crash and how

14:11
we can protect you from it etc

14:13
and 100 people show up and they're

14:15
talking about one product

14:16
that's like a doctor holding a seminar

14:20
and talking about one medicine it

14:22
doesn't work like that from a fiduciary

14:24
standpoint which i think all

14:26
people that in the financial business

14:28
just by reflex should be fiduciaries

14:30
meaning you're putting

14:31
the client's needs ahead of yours

14:33
there's no way

14:35
if you're presenting i don't care if

14:36
it's an immediate annuity you can't

14:38
present an immediate annuity

14:39
to 100 people and all of them need an

14:41
immediate annuity you can't present an

14:43
indexed annuity to 100 people and all of

14:45
them need an indexed annuity

14:46
but for some reason that's how it goes

14:48
and so your question is

14:50
well stan the annuity member then why

14:51
don't you do a bad chicken dinner or

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preferably a expensive steak dinner

14:56
seminar

14:57
and talk about all types of annuities

15:00
number one

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i get paid to speak i don't buy people

15:03
dinner to speak

15:04
but you know if i did if i did if i did

15:07
bad chicken dinner seminars or steak

15:09
dinner seminars

15:10
you know the title of the of the

15:11
presentation would be annuities the

15:13
brutal truth the good

15:14
and the bad and the ugly i mean i would

15:16
tell everything about it and then leave

15:18
it to you

15:19
to make the decision so in conclusion

15:23
what do

15:23
what do annuities contractually solve

15:25
for remember ask the two questions what

15:27
do you want the money to contractually

15:28
do

15:29
and when do you want those contractual

15:31
guarantees to happen never make a

15:33
decision

15:34
on hypothetical theoretical back tested

15:37
projected hopeful agent return scenarios

15:40
or some

15:41
stacked just all the nonsense that's out

15:44
there

15:44
do not buy an annuity with the planets

15:48
hoping to align or the unicorns chasing

15:50
the butterflies

15:51
buy it for the worst case scenario the

15:52
contractual guarantees and you will be a

15:54
happy camper

15:56
you will like the annuity transfer of

15:58
risk solution that you get

15:59
but if you buy it for the back tested

16:01
number the hopeful agent returns

16:03
scenarios if you'd

16:04
owned it this time you'd have made this

16:06
you will not be happy i will guarantee

16:08
that

16:08
because hypotheticals never come true

16:11
annuities are transfer risk

16:13
products they're commodity products

16:14
meaning there's no one size fits all and

16:17
there's no perfect product and no one

16:18
has the best one

16:19
you have to shop for the highest

16:20
contractual guarantees for your

16:22
situation

16:23
and own it for what it will do not what

16:25
it might do and the contractual

16:26
guarantees only

16:28
if you stick to that and understand that

16:30
they're not investments in their

16:31
contracts

16:33
you're going to be fine but once you

16:34
start edging toward the line of

16:37
thinking that policy might do more than

16:41
it should do or it's or it's

16:43
contractually

16:44
geared to do then that's when the

16:47
problems start

16:49
so if someone's pitching you an annuity

16:51
the the what you do is you write down

16:53
exactly what they say to the penny

16:55
i mean to the detail signing data and

16:57
have that person signing data and

16:59
try to flush out the truth of that too

17:01
good to be true sales [ __ ] because

17:03
with annuities every single time without

17:05
exception if it sounds too good to be

17:07
true it is because

17:08
they're contracts and you can't polish

17:10
those things up

17:12
they are what they are so my advice to

17:14
you is read the contract before buying

17:16
we can provide that to you

17:17
at the annuityman.com just a side note i

17:20
did start a youtube channel kind of

17:22
relaunched it

17:23
in september of 2019 and i'm putting out

17:26
a

17:27
daily video monday through friday new

17:29
one

17:30
i know you're saying that's crazy i know

17:32
but

17:33
i want to educate i want people to

17:35
understand obviously

17:36
i want you as a client if you're a

17:38
client thanks for being a client if

17:39
you're not i want you as a client if an

17:41
annuity fits

17:42
but i want to educate you first i want

17:44
you to make your decision an informed

17:45
decision on your terms and on your time

17:47
frame

17:49
with all of the information i have

17:50
whether it be the podcast you're

17:51
listening to

17:52
right now the youtube videos i produce

17:53
every day i'm also writing

17:55
an article every single day right now

17:58
it's for the street.com

18:00
i have a blog on my site that we're

18:01
posting stuff all the time and you can

18:03
do questions and answers to me and you

18:06
can also email me at stan

18:07
at the annuityman.com and i'll answer

18:10
the email i get tons of them i get 400

18:12
every day on average but

18:14
i answer them i sit there and answer

18:16
them

18:17
every single one of them because i want

18:19
you to make a good decision to not buy

18:21
something to get stuck into something

18:23
that you can't explain so

18:26
last thing too never buy anything you

18:28
can explain to a nine-year-old no

18:30
offense to nine-year-olds

18:31
buy simplicity buy the simple products

18:33
and you'll be very

18:34
very happy so with that i hope you go to

18:37
the annuityman.com

18:39
and interact with us there maybe

18:41
schedule call and we can talk one on one

18:44
and my name is stan the annuity man and

18:45
i really appreciate you joining me on

18:48
fun with annuities

18:53
thanks for listening to fun with

18:54
annuities please hit the subscribe

18:56
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you