Why All Annuities Are Commodities

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Hi there, Stan The Annuity Man, America's annuity agent, licensed in all 50 states and Puerto Rico,

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top agent in the country, and the founder of Contractual Guarantees

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Only, which means we only look at the contractual guarantees of the policy.

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Today's video is a very good one because most in the industry disagree with me,

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which means I'm completely right. The topic is: all annuities are commodities. So,

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all annuity types and products are actually commodities. And what is a

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commodity? Commodities, when you think of commodities, you think of wheat and corn

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and oil. Isn't that interesting? Oil is two syllables in the South: "oy-yul."

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It's the same. In the annuity world, it's the same.

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Insurance companies issue annuity policies, okay? Insurance companies. Those are

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contracts. My opinion, which is correct and has been for decades, and the reason

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we're the gorilla in the annuity room, is you own an annuity for what it will do,

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not what it might do. And the "might do" is the hypotheticals, the theoreticals,

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the back-tested numbers you see at the steak dinner seminars.

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"Hey, if you'd have owned it 10 years ago, it would have done this." The market growth story,

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which is a false and empty story. And for the people out there that have purchased that

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dream and now own the contractual realities, you understand what I'm talking about. You understand

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that Johnny Appleseed agent, man, he made it sound great. Upfront bonus and market upside with no

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downside and free long-term care and all the stuff that's so great. Martha, why wouldn't we buy that?

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It's because if it sounds too good to be true, it is.

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All annuity types are commodity products. Let's go through them, okay?

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Now, for the record, I do not sell variable annuities, and those are kind of dying. That's

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kind of the dinosaur. There's not many variable annuities out there. Variable annuities are,

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in essence, mutual funds wrapped with an insurance wrapper that typically comes with a 3% annual fee.

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Shove that to the side. Dinosaur. If you want to buy mutual funds, buy mutual funds.

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I also do not sell RILAs, Registered Index-Linked Annuities, the brokerage firm's,

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the securities industry's version of an indexed annuity. Again, it's the market growth story. It's

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market upside with no downside, or in RILAs case, market upside and you can share in the

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downside. You can have it like a co-pay annuity. Remember co-pay? Who would do that?

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So, we're going to shove that aside because that's the dream.

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If you want market returns, go get market returns. Don't buy an annuity.

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MYGAs. Let's talk about MYGAs. The annuity industry version of a CD. CDs are commodity

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products. MYGAs are commodity products. You lock in a specific rate guarantee

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for a specific period of time: one-year, two-year, three-year, four-year, five-year,

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six-year, seven-year, eight-year, nine-year, and ten-year durations.

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You can go to my site and see those interest rate guarantees that you can

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either let grow and compound tax-deferred, or you can take

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out interest with some of them that allow you to do that. Commodity products, okay?

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Let's go to the lifetime income products: single premium immediate annuities,

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deferred income annuities, qualified longevity annuity contracts, income riders attached to,

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in this case, indexed annuities because income riders attached to

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indexed annuities typically provide the highest contractual guarantees.

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So, when you're looking for lifetime income,

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it's a commodity product because we're going to shop all carriers for the highest contractual

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lifetime income payout for your specific situation on how you want that structured.

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The companies that are out there that still have captive agents that only sell one carrier, the

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one-carrier model, that's dead as a doornail, okay? Just dead. And I represent the majority of those

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carriers, actually all but one, but that one isn't competitive anyway, so it doesn't matter.

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So, we're quoting all carriers. That's the reason that I say with lifetime income:

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A+ or better and the highest number. A+ or better and the highest number. A+ or better

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and the highest number. I don't care about the product name. I don't care about the

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company name. I don't care. And you shouldn't either. Why? Because it's a commodity product.

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You're buying the highest contractual guarantee for your specific situation.

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And we can design it so that 100% of any unused money goes to your family. Goes

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to your family. Goes to your family instead of the evil annuity company.

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"Well, I'm never going to buy an annuity, Stan, for lifetime income because when I die, the

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annuity company keeps the money." Stop talking. I'm losing IQ points listening to you, okay?

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Lifetime income is also a commodity product, regardless of how you structure it.

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We shop all carriers for the highest contractual guarantee, A+ or better, for lifetime income.

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So, you're like, "Wait a minute. Wait a minute, Stan. What if I want a specific carrier?"

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Well, you're not listening. They're commodity products, okay?

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Just because a company runs ads on the nightly news or on cable television,

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A+ or better, doesn't mean they're better than the A+ or better company that doesn't run the ads.

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Okay? Here's how lifetime income companies, carriers that offer lifetime income products,

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they're bidding on your business. Think of a football stadium with everyone your age and

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gender in that football stadium. If it's full for that specific carrier, they're not going

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to have an attractive quote because they already have a full stadium of you sharing in the risk.

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That's a very simplistic way to explain mortality credits, okay? Longevity risk.

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Transferring risk to the annuity company to pay for as long as you're breathing, okay?

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Remember, there's no ROI on lifetime income. I don't know that until you die.

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But there are carriers that don't have that upper bowl of that football stadium

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filled with your age range and your gender, and they're going to aggressively quote to get your

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business. And that guaranteed aggressive quote, they're hoping to attract you.

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So, don't go into a quote, either you run it at my site at theannuityman.com or you schedule a

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call with me and we go through the details and then I have my team send you that quote

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personally. Don't get caught up in names. It's the number, A+ or better. The number, A+ or better.

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So, MYGAs, remember, CD-type annuities: commodity product,

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okay? You can choose the rating with MYGAs. We're dating that company and

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not marrying them like lifetime income. So, they could be a little bit lesser rating.

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But it's my call on what we recommend. It's your call on what you accept. Everything listed on our

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MYGA feed doesn't mean that we recommend it or I recommend it. I'm looking under the hood

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financially to see if they can back up that claim for that specific term that you're looking for.

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"Stan, I want a three-year and a five-year." I'm going to say, "Okay, do you want interest? Do you

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want the ability to take interest out, or do you just want to lock and load?"

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And by the way, MYGAs: Roth IRA, Traditional IRA, Non-IRA,

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you can use it for any account. Commodity product. Lifetime income: commodity product.

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So, we talked about MYGAs, QLACs, DIAs, deferred income annuities,

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and single premium immediate annuities. By the way, QLACs, Qualified Longevity Annuity Contracts.

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Let's talk about the goober in the room, which is fixed indexed annuities. Is that a commodity

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product? For us, it is because we only use indexed annuities, at the time of this taping,

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to deliver the income rider. Income riders have to ride on top of a policy.

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We choose the indexed annuity because it's the most cost-efficient and provides the highest

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contractual guaranteed income rider. We don't look at the indexed annuity. Indexed annuities,

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they're just CD products. I was getting ready to say bad CD products,

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but I don't want to get, you know? We sell more indexed annuities than

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anybody, but we don't look at the growth story that all agents are going to say,

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"Well, look at the cap and the spread, the participation rate,

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and you could get market..." Shut up. Just shut the heck up. I'm going to squash that

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until the industry brings me a product that I could recommend as a standalone.

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But for now, we're just going to use it to deliver income riders. So, if you say,

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"Are indexed annuities a commodity product?" Kind of. And I'm going to tell you two reasons why.

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Number one, I just explained the first reason, which is it's a delivery system for the income rider.

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So who cares? Second is, since 1995 when they were first introduced:

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CD-type returns. CD-type returns. CD-type returns, not market returns. So, they all are commodity products.

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So, what I want you to do is I need you to ask yourself and answer two questions:

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What do you want the money to contractually do?

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When do you need those contractual guarantees to start?

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From those two answers, okay, we can determine if: A) You need an annuity, and

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B) Which annuity would provide the highest contractual guarantee for your specific

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situation because they're all commodities and because we're going to shop all carriers.

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It's that simple. And I'm confused why people haven't followed me in the industry. Why?

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Because they're commission whores. Excuse my horseless French for being naughty,

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okay? And they're just going for the highest commission.

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In a perfect world, all annuity types would have the same commission.

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I'm getting off on another subject.

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So, when you shop for annuities, you're shopping commodity products. When you're

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shopping for annuities, you're shopping for the highest contractual guarantee,

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not the highest potential. Got to be very clear on that.

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Go to my site, theannuityman.com. Please do that. You can shop at your leisure, 24/7/365.

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Above me is a spinning clock. I would encourage you to watch this video. It's become

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controversial, as they say. It's about lifetime income, okay? And it's about life expectancy

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tables driving lifetime income and artificial intelligence getting ready to change that.

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That dovetails nicely, as they say in the South, with what I just talked

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about with annuities being commodities. All annuities being commodity products.

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My name is Stan The Annuity Man.

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See you next time.