Who Assumes The Investment Risk With A Fixed Annuity Contract?

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Who assumes the investment risk with a fixed annuity contract? Hi there,

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I'm Stan the Annuity Man, if you can't tell from the shirt and the hat,

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Stan the Annuity Man, America's annuity agent, licensed in all 50 states and Puerto Rico. Yes,

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we do have a Spanish division. I don't speak Spanish, but I do have people in

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my office in Las Vegas that they do. But this is a good question. What's the risk,

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Stan? What's the risk of annuity you talking about here, Stan? You know, we're going to talk

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about that. And who assumes that investment risk? You're gonna like the answer after this.

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So, who assumes the investment risk? It's not you. That's if you can leave with one

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answer, you can shut the video off and just send me an email at [email protected]. Say, "Hey,

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let's get down to business. Let's start talking about it." Or go to my site and schedule

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a call. But the life insurance company that issues annuities — let me say that again. Life insurance

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companies issue annuities. There's many types: SPIAs, DIAs, QLACs, Income Riders, Index Annuities, MYGAs.

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I don't sell variable annuities. I'm not in the RILA space and will never be. So RILA is

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a registered index-linked annuities. My saying all the time is, if you want to buy growth, then buy

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growth. You know, you don't need an annuity to do that. And if you buy an annuity to do that,

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you're going to find out you should have not bought the annuity. You should have just stayed

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in the markets. But life insurance companies take your money in. They don't do crazy things with it.

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Well, they buying Bitcoin with it, son. What are they doing here? Buying the crypto?

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No. The life insurance business, in addition to being the biggest lobby on the hill in D.C.—

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I always say, you know, they're the NRA without the guns because they don't need the guns because

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they have the money. Okay? They are highly regulated. One of the reasons I really like this

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space and been in it for a long, long time — and actually left the big brokerage firms, the last

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one I was at, I was at Morgan Stanley and I was at UBS — left to do this, to become the annuity man,

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is because this space is very regulated and pro-consumer. Okay? Couple things. The

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National Association of Insurance Commissioners, NAIC — NAIC.com, I think is their site — they oversee

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all the fixed annuities. The registered index-linked annuities and variable annuities,

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those are securities. That's SEC stuff. But for the fixed annuities, it's regulated at the state

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level. And then there's a board over that. They do a fantastic job. You know, they make sure there's

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regulations on what insurance companies can invest in. They can't be crazy. They can't be rolling the

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dice overhand with a running start. Okay? They're not allowed to do that. If they're human beings — if

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they were allowed to do that, they probably would, but they're not. Okay? Now, for lifetime income,

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we're only looking at A+ or better carriers. Let me just tell you right here, if it's A+ or better,

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you don't need a sweater. And what that means in southern speak is it's going to be okay. You don't

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have to worry a second about it. Now, couple things about the life insurance industry that

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issues annuities and the NAIC, National Association of Insurance Commissioners. Each state has a state

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guarantee fund. You can actually buy the annuity and test-drive it and then get your

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money back within a certain time period within each state if you don't want it — for any — you don't

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have to give a reason. It's the only financial product that really you can test-drive. I think

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that is fantastic. But bottom line is you're not assuming any of the risk. In fact, annuities solve

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for four things: principal protection, income for life, legacy, long-term care. They're not

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growth products. They're not market products. They're not Bitcoin. They're not Crypto. They are

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transfer-of-risk. So the question is, who assumes the risk? You're transferring the risk. You're

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transferring all of the risk to the life insurance companies. And that would include the investment

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risk, them taking your money, making sure it's there to pay the claim, the guarantee. And you're

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also — for lifetime income — you're transferring the risk to solve for longevity, or longevity risk,

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which means they're going to pay you as long as you're breathing and on a respirator. Okay? So

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I think that's the best part about annuities, if they are presented properly and purchased properly

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and within proportion. Okay? And you need to go to my site at theannuityman.com. You can run quotes,

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download my owner's manuals, schedule a call with my team, who are licensed in all 50 states but not

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on commission. They're not hammers looking for nails. They're actually listening to you. Their

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bonuses, which is discretion of muah, it's based upon client satisfaction and how the process

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goes. You know, we listen to all calls, so we're making sure that they're saying the

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right thing and doing the right thing. But from a risk standpoint, once you decide on an annuity

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strategy, after answering the two questions we always ask — number one, what do you want the money

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to contractually do? And number two, when do you want those contractual guarantees to start? — after

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you answer those and we determine an annuity strategy could, might fit for your situation,

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once you decide on that, lock that in and we take you through the process. And then the

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money's at the carrier, you've transferred the risk. You've transferred the investment

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risk. You've transferred — if it's for lifetime income — longevity risk. You've transferred — if

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it's for principal protection — principal protection risk. Okay? Just think of it

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like that. These are transfer-of-risk products. When you're in the market, you're shouldering it,

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and you're shouldering that risk, and you're going to get rewarded if it goes

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up — and you should. But these annuities should be purchased and considered as non-correlated assets,

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meaning not attached to the markets in any way. Now, I just blew up most of the annuity agents

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out there trying to sell this stuff because they're trying to sell index annuities and

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RILAs and variables and all that stuff for hopes and dreams and unicorns chasing the butterflies.

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Have at it, man. But that's not why they're here. That's not why they were put on the planet. These

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people trying to put a square peg into a round hole just to create revenue. Okay? Now, as George

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Costanza always says, if you believe it's the truth, it's not a lie. I'm assuming these people

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that are selling these growth — quote-unquote growth potential products — believe it. But the reality and

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the stats show otherwise. Okay? So transferring risk — investment risk — who assumes the risk? Bottom

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line, it's not you. You're transferring the risk to the life insurance company that issues the

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annuity that you choose for whatever you're trying to solve for. Remember: principal protection,

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income for life, legacy, and long-term care. So, if placed properly, annuities are risk-free

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products because you have the company that's backing it up. You've got state guarantee

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funds in place. If you're A+ or better, you don't need a sweater. And the annuity industry itself,

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which I call the annuity mafia, they make sure that some idiot running a company is not going

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to do something stupid and ruin the golden goose. And the golden goose in the annuity industry is

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the word confidence. When you're transferring the risk, you have confidence that they're going to

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back that up, that they're going to assume that risk. And I'm going to tell you, they are. I've

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been doing this for a long, long time. Top agent in the country. I've seen a lot. I've seen a lot.

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But what I've seen is that the consumer is at the forefront of the annuity industry. Maybe not a

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lot of agents — some agents. Every industry has bad apples, right? But the annuity industry puts that

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client at the forefront from the standpoint of protecting you. And you need to know that.

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From a risk standpoint, you need to know that, especially in these chaotic times that we're

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living in. Check the date. Do me a favor before I leave. Above my head, you're going to see a

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box with a counting tick-down clock. And I did a video on why we focus on contractual guarantees.

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I'm the pioneer of contractual guarantees only. I started it a long time ago. It didn't make any

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sense to me why people weren't just focusing on that. So that's what we're focused on. People,

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why the hell y'all get so big? That's all we did. Okay? We just sell contractual guarantees.

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We represent all carriers. We're licensed in all 50 states and Puerto Rico. And we just tell

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the truth. My grandfather said, "If you tell the truth, you don't have to remember anything." So,

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watch that video, hit the subscribe button, you can shoot me an email. I'll actually answer it.

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[email protected]. [email protected]. And I hope to speak with you soon. See you next time.