How To Understand An Annuity Contract

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So, how do you understand an annuity contract? Stan The Annuity Man,

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America's annuity agent, licensed in all 50 states.

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Good question. As I told Big C behind the camera, and I just,

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you know, I come up with these sayings and he loves them, I think this applies to how do

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you understand an annuity contract: You can't polish a turd, but you can roll it in glitter.

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Think about that for a second. Seriously.

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And I'm going to explain that and how it correlates to annuity contracts after this.

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So wait a minute, Stan. Did you just say you can't polish a turd,

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but you can roll it in glitter? I did. It's a visual,

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but it also applies to how do I understand my annuity contract,

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Stan The Annuity Man. How do I understand that?

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Well, we could make it very simple for you. We could have you schedule a call with me,

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and then I could explain it, and then you'd get off the phone and go, "I understand that."

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Or you could circumvent that and say, "Stan, send me a specimen policy." That's not a specimen

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urine. That's a specimen policy. They should name it something else, truly.

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But anyway, we'll send that to you, and all it is is the verbiage of the

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policy. It doesn't have your name or the numbers specifically,

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but it has all the verbiage that's been used by the lawyers that wrote it.

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By the way, on a side note, if the annuity industry would allow me to write all contracts

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in Stanglish, it'd be a better world, man. It'd be a much cleaner, understandable world.

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But how do you understand it? Read it. Number one, the specimen policy.

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And the cool part about annuities: it's the only place in the financial business

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you can test drive the product and get your money back if you don't like it.

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In other words, you could have the annuity issued in force,

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but within a certain, each state has a certain day,

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10 to 30 days, you can get your money back. It's in force, but you might say, "You know what?

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I read the specimen policy and then I read this contract. I don't like it. Send my money back."

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We'll facilitate that. We'll help you with that. That's not a problem if you get to that point or

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if something changed in your life between the time you bought it and the time it was issued.

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I mean, you can test drive the car. There's not a financial product on the planet that

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you can test drive and then go, "Yeah, you know what? I want to buy that stock,

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but 15 days later, I want my money back if it doesn't work out." You think not?

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But it happens in the annuity industry because it's contractual. You own an

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annuity for what it will do, not what it might do. Not the hypotheticals,

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theoreticals, back-tested, unicorns chasing the butterfly, bullcrap upfront bonus pitch

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that you're hearing at the bad chicken dinner, expense steak dinner seminar, of which you need

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to order the filet mignon medium rare with the baked potato. Swallow the food, not the pitch.

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How do you understand an annuity contract? If you run the quotes on our site for the

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contractual guarantees, which is the only way you can, you pretty much understand it.

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Had a guy call the other day and he goes, "Wait a minute. This MYGA, this multi-year guarantee

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annuity, it's the annuity industry's version of a CD." The guy's like, "I don't get it.

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So I get this percentage every year for five years."

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"Yes."

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"What happens after five years?"

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"You can get your money back."

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"Can I take interest out during the five years?"

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"Yes."

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"What's the catch?"

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There's no catch. You just explained the product and the contractual guarantee.

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Same thing with immediate annuities. You say, "Wait a minute. Okay, Stan, I'm going to start

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income in six months. This is the number I'm getting from this company contractually?"

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"Yes."

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"For the life of the policy?"

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"Yes."

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"And when I die, whatever's left in the account goes to the beneficiaries, not the annuity company?"

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"Yes."

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Ta-da! Do you really need to read the specimen policy? That's it.

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You know, this is a great question because, in essence, this is my business model. We're only

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looking at the contractual guarantees. We're only quoting for the contractual guarantees.

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We're not quoting for anything but the contractual guarantees.

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So, you're going to understand the contract because that's the contractual guarantee.

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Even with indexed annuities, with income riders,

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with all those moving parts, upfront bonus, cap spreads, participation rates,

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growth on the income rider, I'm like, who cares? Number. Noise shiny things for stupid people. Number.

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"Well, Stan, are we even going to go into the caps and spreads and participation rates?"

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No, because that's hypothetical. Contractual is the income rider,

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the number. That's what we're going to look at.

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So, do I even have to be worried about any of this? In my opinion,

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no. You can read the contract all you want to, but we're buying the number.

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We're quoting all carriers for the highest contractual guaranteed number for lifetime

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income, A+ or better. Don't care about the name. Don't care about the product name.

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People are like, "Well, Johnny Appleseed, he told me about the Whizbang 3

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Income Flippadoodle. What do you think about the Whizbang 3 Income Flippadoodle?"

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I could give a shit about that. I care about the number. I don't care about any of that other

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stuff. They have to meet our financial framework for me to recommend it, but it's the number.

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So, the original question is, how do I understand my annuity contract?

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Well, if you're trying to understand hypotheticals and theoreticals and all

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that stuff, I'd rather you look at your hand and then say, "Okay, there's a line going here,

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and then this is a line, and then there's three lines here." That's more fruitful.

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It's about the number.

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I hate to be repetitive, but my brain explodes when I hear people say, "Well,

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this guy was talking about the spread and then the combination of the cap and the spread."

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I'm like, "Holy crap. What are we talking about? We're talking about hypotheticals and

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theoreticals, back-tested. We're not talking about guarantees."

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If you're not talking about the contractual guarantee number,

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you're never going to understand the policy. Now, fortunately, SPIAs, DIAs, QLACs,

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and MYGAs are so simple that a group of second graders, nine-year-olds, could go,

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"Got it. Totally understand that," and explain it to my father. I mean, they're that simple.

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Once we get into the indexed annuities, RILAs, variables, but the income riders

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attached to it commoditize the product, and it's about the number.

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Don't let anyone make this difficult. Annuities are the most simple products

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on the planet when you just look for the contractual guarantee.

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People get in trouble when they make it more difficult than that.

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And if you look at them like we do, and you should, as commodity products, meaning the quotes

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change every 7 to 10 days like a gallon of milk, we're quoting all carriers for the number.

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Forget the lawyers of "for the people," whoever those cats are. I don't even know

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who those cats are. "We're for the people." I'm for the number.

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That's what I'm going to start saying. Stan The Annuity Man: For the Number.

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Why not? Makes more sense than "for the people." I guess you're only for

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the people if the people are suing and they've hired you to sue, right?

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Don't sue me, whoever you guys are. For what? The fact that I

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can't remember your name and I see your stuff everywhere tells you all

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you need to know. You need to bring that name out a little bit, you know?

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But Stan The Annuity Man: For the Number. Contractual.

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How do you understand your contract? You understand it by looking at the number. The number

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that the life insurance company is guaranteeing. Everything else is fluffy-doodle crappy-doodle.

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And as I said earlier, it's like, what is it like, Big C behind the camera?

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You can't polish a turd, but you can roll it in glitter.

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That should be a T-shirt, but it's not because my name is Stan The Annuity Man: For the Number.

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Oh, one more thing. Up above me, spinning clock. You see that? I got so carried away with "For

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the Number" and that whole advertising campaign that's getting ready to happen.

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Can you see that? You're driving down the road and this big huge billboard of me, and I'm pointing at

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you going, "For the Number." That's so beautiful. You know, it might be on my bucket list.

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This video is good, though. I talk about artificial intelligence and how

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it's going to affect lifetime income. It's very important. It's as important as "For the Number."

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I'm serious about that. Watch that video. Go to my site. See you soon.