026: What To Look Out For With Over-hyped Annuity Sales Pitches

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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 and

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welcome to fun

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with annuities i am america's annuity

0:43
agent i'm licensed

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in all 50 states and founder of the

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annuityman.com and annuities.direct

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which are both of my platforms the

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annuityman.com is a

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one-on-one professional focus on you

0:57
service

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that you can only get with us i mean

1:00
it's it's either with me or hand-picked

1:03
people that work for me just our company

1:06
they're not independent they work for

1:07
the annuityman.com and it's like having

1:11
an annuity advisor one-on-one the best

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or you can go to annuities.direct and

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run the quotes yourself and then

1:17
at the finish line connect with us and

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we'll talk then so

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i give you two choices either we can

1:23
one-on-one from the start or you can

1:25
shop around yourself and then we can

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connect later so that's what i do

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and i represent all carriers and again

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licensed in all 50 states

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today's topic is what to look out for

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with hyped annuity sales pitches

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unfortunately i have to do this podcast

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because i get calls all the time and my

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team gets calls all the time

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where people think that they bought

1:49
something that they really didn't buy

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it was sold to them as as pie in the sky

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it wasn't fully explained or

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giving the agents of benefit of the

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doubt the people just wanted to hear

1:59
what they wanted to hear

2:01
so you know that's good and bad right

2:06
i think it's bad it's good for the agent

2:09
that doesn't care

2:10
that their people don't understand what

2:12
they're doing but it's bad

2:14
for the consumer it's bad for the

2:16
industry it's bad for the annuity world

2:17
because

2:18
the annuity industry has earned its bad

2:20
reputation in my opinion

2:23
annuities are the only product on the

2:25
planet

2:27
that provide a lifetime income stream

2:28
guarantee that you can never outlive

2:30
it's a monopoly we

2:32
are the only industry that can offer

2:34
that

2:35
period now the fact that

2:39
annuities are hated is unbelievable

2:41
because

2:42
every single person in this country

2:44
that's a citizen

2:45
owns an annuity it's called social

2:47
security

2:48
that's an annuity it's a lifetime income

2:51
stream

2:53
it's an annuity it is what it is so when

2:56
people say i hate all annuities you mean

2:57
you hate all

2:57
you hate your social security you hate

2:59
cds because there's

3:00
there's annuities multi-year guarantee

3:03
annuities that are just like cds

3:05
so with the over-hyped sales pitches

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what kills me is

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annuity agents are not talking about the

3:10
contractual guarantees and the monopoly

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of lifetime income

3:14
they're talking about pie in the sky

3:15
market type returns and things like that

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my mom who is 80 years old my dad passed

3:22
a couple years ago and she's 80 years

3:25
old and lives in florida

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and she gets invitations all the time to

3:29
go to these bad chicken dinner and now

3:31
they're expensive steak dinner seminars

3:33
and she goes i bet you she has eaten two

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to 300

3:38
bad chicken dinner annuities

3:40
presentation seminars because

3:42
because florida is like i live in both

3:44
nevada and florida but florida is like a

3:45
feeding frenzy

3:47
for annuity agents because you know

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there's a bunch of retirees here and

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most of the retirees have money

3:52
that's where all the assets are and so

3:54
they're targeting them and annuities do

3:57
fit

3:58
for some senior citizens that want to

3:59
transfer risk for income and things like

4:01
that

4:02
but she goes all the time i mean she'll

4:05
literally call the office of that

4:06
annuity agent and ask

4:08
for what's on the menu and what's for

4:10
dessert as a true southerner should

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right ask her once for dessert of course

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she doesn't buy anything and she has no

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clue what they're talking about but

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every single time

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without fail she keeps everything so she

4:21
wants to show it to me

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when i go over there and i uh checking

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on her she'll be like damn look at look

4:26
at this

4:27
look at this uh look at these brochures

4:29
it sounded really good

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and it every time it's an indexed

4:32
annuity every single time

4:34
which is sad because indexed annuities

4:37
are not a bad product they were designed

4:38
in 1995 to compete with cd returns

4:40
that's exactly what they do and i use

4:42
them for

4:43
an efficient delivery system for income

4:45
rider guarantees if your goal is income

4:47
at a future date

4:48
and we shot both income riders and

4:50
deferred income annuities for the best

4:51
contractual guarantee

4:54
but that's not how they're sold they're

4:56
sold

4:57
as market upside with no downside which

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is a problem because

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the word market should never be used

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because indexed annuities fixed indexed

5:06
annuities are life insurance products

5:09
they're regulated at the state level

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they're not securities and you need a

5:12
life insurance license to sell it

5:14
i always joke that if you want to get in

5:16
the index annuity business

5:18
you can take a crash course take the

5:20
course on a monday pass the test on a

5:22
friday give your bad chicken dinner

5:25
seminar on a saturday and sell something

5:26
on a monday

5:28
that's crazy but it's true i mean i i'm

5:31
pushing them a little bit but

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let's just say in a from start to finish

5:34
in a month you can start selling index

5:36
annuities and start placing people's

5:37
retirement in there

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that's a pretty low bar but you know

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there's a lot of honorable people in the

5:43
business there's there's bad people in

5:44
the business just like every sales

5:46
industry

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so this isn't unique it's just that

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we're dealing with people's retirement

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money

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so you know the the over hyped annuity

5:53
sales pitches that surround

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indexed annuities are let's go over some

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of the things you're going to hear

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a free up front bonus sounds great right

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just trust me there's no philanthropist

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and annuity companies that are waking up

6:05
every morning going you know what i want

6:07
to give money away to everybody

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i want to give free money away upfront

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bonuses

6:12
are nothing more than part of the

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overall contractual guarantee of the

6:16
policy

6:16
there's a hundred pennies in the dollar

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i mean they're not

6:20
they're not coming out of pocket to give

6:22
you the bonus

6:24
trust me it's part of the overall

6:26
contractual guarantee and when we do

6:28
income later type quotes for for income

6:30
riders attached to indexed annuities

6:33
we're including products with bonuses

6:36
products without bonuses we don't care

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and

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ironically a lot of the times most of

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the time actually

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the products that don't have an upfront

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bonus finished first

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or finished higher than the ones with a

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bonus

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bonuses to me you take this the right

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way hopefully you didn't buy it for a

6:54
bonus

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but i call it candy for the stupid if

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you believe

6:59
that that's free money and you sign the

7:00
paperwork because you thought that was

7:02
free money then you get what you deserve

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in my opinion

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which leads me to the second thing

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that's over hyped

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which is the income rider i got a call

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today

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before i got in the studio to do this

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and the guy

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said my father just was pitched a 9

7:18
annuity should we buy it now at the time

7:22
of this taping the current 10-year

7:23
treasury note is less than 2 percent

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so i said to him do you think there's a

7:29
genius at an annuity come this figured

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out how to take a 10-year treasury note

7:33
that's less than two percent

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and turn it into nine percent yield

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they wanted to believe it was nine

7:39
percent that agent wanted them to

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believe it was nine percent

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what they what they were being pitched

7:46
was called an income rider an income

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rider is an attached benefit to a policy

7:51
typically of indexed annuity or variable

7:53
annuity but in this case it was an

7:55
indexed annuity

7:56
it's attached benefit to a policy that

7:58
that high percentage grows

8:01
but can only be used to calculate your

8:04
first

8:04
income payment you can't peel off the

8:06
interest you can't

8:08
cash it in you can't transfer that money

8:12
it's monopoly money it's a phantom

8:13
account

8:15
and as i told this gentleman today if it

8:17
sounds too good to be true it is

8:19
every single time with annuities so

8:22
the upfront bonus no big deal it's part

8:25
of contractual guarantee

8:26
a high percentage income rider is not

8:28
yield jimmy carter's not in office

8:31
we're not getting those yields again

8:32
okay probably not in our lifetime

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the other thing i hear too is fire sale

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well you got to sign it now because

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if you don't do it the bonus is going to

8:40
go down or this is going to go away or

8:42
this

8:42
there's no urgency to buy an annuity the

8:46
only urgency with annuities

8:47
is to fully understand the limitations

8:49
and the benefits of that specific

8:50
annuity

8:51
strategy you're looking at so someone

8:53
says you got to sign it it's got to be

8:55
signed it says

8:56
we got two weeks you gotta that's crap

8:58
that's

8:59
absolute crap that means they need to

9:01
make a car payment or something

9:03
they're in trouble financially if

9:05
they're pushing you to sign

9:07
never sign anything that you don't fully

9:09
understand the product if you can't

9:10
explain it to a nine-year-old don't buy

9:12
the product

9:12
i mean warren buffett has said this so

9:14
many times if you don't understand it

9:17
don't buy it

9:19
and and with indexed annuity options i

9:21
always joke there's five people

9:23
on the planet that understand truly

9:26
understand

9:26
indexed annuity options and i think i

9:29
know the other four

9:31
meaning i'm one of them they're complex

9:35
the other thing i hear about is high

9:37
pressure one call close type things

9:40
where you go in their office

9:41
you meet with them one time and they

9:42
want to close the deal right then

9:45
there's never a time in your life or my

9:47
life

9:48
that you need to buy an annuity that

9:49
quickly

9:51
you need to think about it you need to

9:52
understand it you need to quote all

9:54
carriers you need to

9:56
understand the good and the bad of it if

9:57
you want to read the specimen policy

9:59
read the application

10:01
take your time there is no such thing as

10:04
a high-pressure one-call meeting

10:05
i i hear horror stories of people going

10:08
in and

10:09
being i guess convinced is a very nice

10:13
way to say

10:14
convinced to sign paperwork well just

10:16
sign the paperwork and but you know

10:17
we'll and then go think

10:18
never sign anything ever

10:22
that you don't fully understand the

10:24
product

10:26
period at the end of the day the other

10:28
thing that kills me and you have to be

10:30
this is where you have to be careful

10:33
do not make a decision on non-guaranteed

10:36
returns

10:37
so when they're showing hypotheticals

10:39
and theoreticals and back-tested numbers

10:41
and

10:41
and if this happens then if the index

10:43
does this then the annuity does this

10:45
and if this anything that's not

10:47
guaranteed

10:48
just throw it away don't even look at it

10:51
because

10:52
you should be buying the annuity for the

10:53
contractual guarantee worst case

10:54
scenario

10:55
even if it's an indexed annuity that

10:58
that has an index

10:59
call option on the s p you should be

11:01
buying it for worst case scenario you

11:02
should be buying it for the principal

11:04
protection

11:06
not some pie in the sky number that you

11:07
think you're going to get that the agent

11:09
told you if you owned it 10 years ago

11:10
you'd have gotten

11:12
that's garbage in fact in the industry

11:15
there's a couple of states right now

11:16
that are trying to ban back testing

11:18
meaning showing you numbers if you owned

11:20
it 10 years ago this is what you would

11:21
have gotten

11:22
that's garbage that's hindsight's 2020.

11:24
that's that should not be allowed and

11:26
i'm one of the people that say that you

11:27
should never look at that

11:29
because things were different back then

11:31
rates were different back then

11:32
products were different back then you

11:34
can't look at that

11:36
and one of the things that's happening

11:37
right now in the index annuity world is

11:39
you have companies that are creating

11:42
indices index

11:43
names out of thin air based upon

11:45
back-tested algorithmic numbers in other

11:47
words they're going out into the market

11:49
and creating a basket that creates a

11:51
specific return scenario over a specific

11:54
period of time

11:55
then attaching a name to it made out of

11:57
mid-air and then putting it inside

11:59
of an indexed annuity and selling it and

12:01
then saying if you'd owned it 10 years

12:03
ago you'd have made this

12:04
and the indicy hasn't been in place for

12:06
a year

12:08
or in some cases a week

12:11
i mean there's laws that are trying to

12:13
be passed that some of the

12:15
in the industry are fighting that

12:18
indexes that have not been in place in

12:21
the marketplace for over 10 years cannot

12:23
be used in an index annuity

12:25
totally agree with that i really wish

12:27
that would go through

12:28
period one of the great

12:32
tragic agent stories i've heard and when

12:34
i say this i'm not perfect

12:36
trust me standing nudity man i just you

12:39
know i always tell people

12:40
you know when you tell the truth you're

12:42
not to remember anything i'm just going

12:43
to tell you the truth

12:45
it's going to be brutal you might not

12:46
like the way i do it you don't you might

12:48
not like the

12:49
my cadence you might not like my

12:50
attitude but you're going to get the

12:52
truth it's going to be factually in your

12:54
face in fact i call myself the walking

12:56
middle finger

12:56
of annuity truth i am

13:00
you know a lot of people like that my

13:02
clients like that because they know i'm

13:04
not going to

13:04
bs them period but this guy called the

13:07
other day he goes

13:08
i told this guy you know i'm not sure

13:10
i'm not sure i want to buy this it was a

13:11
local guy i think i was from michigan or

13:13
somewhere

13:14
and he said the agent showed up his

13:16
house with a bottle of whiskey wanting

13:18
to drink

13:20
that's crud that's crap that agent

13:24
should should lose his license for that

13:27
move right there i called the agent

13:29
whiskey jack

13:30
i told the guy and the guy's not even a

13:31
client i said listen tell whiskey jack

13:34
to never talk to you again because

13:36
anyone who does that is

13:37
desperate period so when you're talking

13:41
about what to look out for

13:42
with overhyped annuity sales pitches you

13:45
know it's tough because most people in

13:46
this country that you want to trust

13:48
people you want to believe what they're

13:49
saying is true

13:50
and in most cases with annuity most

13:52
annuity agents are on the up and up

13:54
we're just talking about a handful of

13:55
people

13:55
unfortunately a lot of them run tv ads

13:58
or radio ads

13:59
and they're pushing the limit but i tell

14:02
people this all the time

14:03
your only protection from an over hyped

14:05
annuity sales ad

14:07
is to create your own statement of

14:09
understanding and what i mean by that

14:11
is when you're being pitched and you're

14:14
being high pressured in

14:15
in this person you just can't get out of

14:16
the way

14:18
then write down every single thing that

14:21
agent says

14:22
the way that you understand it and

14:24
interpret it

14:25
based upon their sales pitch write it

14:27
down annuity's going to do this annuity

14:30
returns are going to be this

14:31
this is the this and then and write it

14:33
down in detail

14:35
in your words and when you're done

14:38
explaining the annuity the way that you

14:39
and maybe you and your spouse or wife or

14:41
partner

14:42
if that's the case have understood it

14:45
write it down and then sign and date it

14:47
at the bottom and then ask that agent

14:49
who presented it to you

14:50
to read what you wrote and if it's all

14:53
true

14:53
sign and date at the bottom right beside

14:55
you

14:57
create your own statement of

14:58
understanding two things are gonna

14:59
happen number one

15:01
that pen might weigh a thousand pounds

15:04
and he will not sign it he or she will

15:06
not sign it well then you've got your

15:08
answer or

15:10
they might read it and say well no let

15:12
me clarify that that's not true it works

15:14
like this

15:15
well then you flushed out the truth then

15:17
you have to make a decision

15:19
you know whether you know you trust that

15:21
person for not being

15:22
totally transparent right or number

15:25
three

15:26
they sign it and they're a sociopath and

15:27
they just need the sale

15:29
and if that's the case you got them

15:30
because you go back to the annuity

15:32
company say hey

15:33
this person signed off on that and

15:35
that's that's what he said it was going

15:37
to do and they

15:37
the annuity company's going to say

15:38
that's not what it's gonna do now the

15:40
good news about

15:41
overhyped annuity sales pitches you

15:43
still have one out

15:44
if you don't even do the statement of

15:46
understanding you still have one out

15:48
it's called the free look time period

15:50
annuities have two benefit propositions

15:52
as a as an industry that no one else has

15:55
in the financial industry the first is

15:56
we've talked about it lifetime income

15:58
stream an income stream you can never

15:59
outlive

16:00
annuities are the only product that that

16:02
does that contractually

16:04
the other thing that separates annuities

16:07
from all

16:08
other financial products is you get to

16:10
free look at you get to test drive it

16:12
you get to own it

16:14
and get your money back even though the

16:15
policy is enforced and you don't have to

16:17
give a reason

16:18
each state has has a specific free look

16:20
time period

16:22
that the agent should tell you and even

16:25
if they don't tell you it's in the

16:26
package when you get the policy it'll

16:27
it'll say in there

16:28
here's the free look time period do not

16:31
call the agent

16:32
please to ask the questions call the

16:34
carrier call the 800 number in that

16:36
package

16:37
and ask the questions well he said it

16:40
was going to do

16:40
she said it was going to do this and

16:42
that person at the carry will tell you

16:44
the truth

16:45
they're not on commission they're

16:46
they're just they're there to make sure

16:48
that the customer

16:49
and the clients and the consumers are

16:51
protected trust me that

16:53
the carriers are on your side they're on

16:55
your side of the table

16:56
they're trying to prevent some of this

16:58
nonsense they really are

17:00
so ask them the questions and then if

17:02
the answers don't come back the way

17:04
you want them you don't have to give a

17:05
reason just say send me my money back

17:07
under the free look provision

17:08
and you can get your money back so

17:10
that's the good news so really you have

17:12
two

17:12
really good levels of protection

17:14
statement of understanding that you

17:16
write down and have them sign

17:18
and then the free look time period so

17:20
what i would tell you

17:21
kind of in closing is remember that

17:24
annuities are contracts to transfer risk

17:26
products you own them for what they will

17:27
do not what they might do the

17:28
contractual guarantees

17:30
in order to buy one or even even

17:32
consider

17:33
buying one or to even know that you if

17:36
you need one

17:37
ask two questions what do you want the

17:39
money to contractually do

17:41
and when do you want those contractual

17:42
guarantees to happen from those two

17:43
questions

17:45
you can determine a if you need an

17:46
annuity and if you do what

17:48
type best contractually solves for your

17:51
specific situation

17:52
the other thing is the acronym pill

17:54
principal protection income for life

17:55
legacy and long-term care

17:57
long-term care slash confinement care

18:00
that's what annuity software if you

18:01
don't need to solve for one or more of

18:02
those things you don't need an annuity

18:05
it's that simple and don't let someone

18:07
convince you that one size fits all

18:09
they have a product that does everything

18:11
they don't

18:13
period doesn't exist if you're solving

18:16
for a specific situation

18:17
whether it's income or legacy or

18:20
confinement care

18:21
or principal protection then go solve

18:23
for that don't try to solve for all of

18:25
it

18:26
there's not one product and if someone

18:27
uses the word hybrid to sell something

18:31
then walk away hybrid's a plant hybrid's

18:33
a car hybrid can be even be a mattress

18:35
but hybrid is not an annuity

18:37
hybrid's a word used to polish up

18:40
indexed annuities and for the record i'm

18:43
not against index annuities i think

18:45
i think they fit when properly explained

18:47
for their benefits and limitations and

18:49
what i use them for

18:50
are very very good and efficient and

18:53
low-cost

18:54
delivery systems for income rider

18:56
guarantees for future lifetime income

18:57
benefits

18:58
so i'm not down on index annuities i

19:01
just vomit

19:02
on how a lot of them are sold and

19:04
promoted

19:06
so one thing before we close i do have a

19:09
youtube channel stand the annuity man

19:11
youtube channel so go to youtube

19:12
type in stand the annuity man i put out

19:14
a video every single day i'm also

19:16
writing a lot more

19:18
as you know i've written seven books and

19:19
i will send you those books for free if

19:20
you don't have them go to

19:21
theannuityman.com

19:23
and just give us your shipping address

19:24
i'll ship those out to you they're on

19:26
amazon but i'll ship them to you for

19:27
free i need you to be

19:29
i need you to be educated on what you're

19:31
going to make the decision on okay

19:33
even if it's education gets you to the

19:35
answer i don't need an

19:36
annuity great i've done my job all right

19:39
obviously we want you as a client but we

19:40
want you as a client if the annuity fits

19:42
they don't need square pegs and round

19:44
holes so go to my youtube channel

19:47
i'm writing for a lot of the major

19:48
platforms the street.com is what i'm

19:50
doing right now and hopefully i'm with

19:52
them a long time i really like them a

19:54
lot

19:54
and they're providing me a platform to

19:56
really educate the consumer out there

19:58
so with that i appreciate you joining

20:01
the number one

20:02
annuity podcast on the planet and it's

20:05
called

20:06
fun with annuities thanks for listening

20:09
to fun

20:10
with annuities please hit the subscribe

20:12
button and make sure to go to my site

20:14
at the annuityman.com where you can run

20:17
your own spea dia

20:19
and q lak quotes and see a live feed of

20:21
the best

20:22
mega fix rates in the country and even

20:24
get

20:25
indexed and income writer quotes as well

20:28
you can also sign up for my six

20:30
annuity owners manual books and i'll

20:32
ship them for free and under no

20:34
obligation i also encourage you to

20:36
schedule a one-on-one call with me

20:39
stan the annuity man so we can have a

20:41
full discussion

20:42
of your specific situation it will be

20:44
the best

20:45
brutally factual and truthful advice you

20:48
will ever get and that's one guarantee

20:51
you should definitely take advantage of

20:52
so join me next time for the number one

20:55
annuity podcast

20:56
on the planet fun with annuities

21:02
[Music]

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you