Episode 020: What Do Annuities Contractually Solve For?

The Annuity Man

Annuities are contracts that are issued by life insurance companies, and primarily solve for lifetime income or principal protection.  It's ironic that many people say that they hate annuities, but they love their Social Security payments.  Those Social Security payments are an annuity structure.

Annuities primarily solve for 4 specific goals.  I use an easy to remember acronym called P.I.L.L. to explain those contractual guarantees.  P stands for principal protection.  I stands for income for life.  L stands for legacy.  And the other L stands for long term care or confinement type care.  If you don't need to contractually solve for one or more items in the P.I.L.L., then you do not need an annuity of any type.

Shopping for annuities should be like shopping for a plane ticket.  Annuities are commodities, and quotes change every 7 to 10 days like a gallon of milk.  You can only lock in those quotes as you are proceeding through the application process. 

Most agents unfortunately sell annuities for market type growth.  That is a mistake in my opinion.  You should only own an annuity for what it WILL DO (i.e. contractual guarantees), not what it might do.  Never buy the dream because you are going to own the contractual reality.

In this episode, The Annuity Man discusses:

  • Why the buying decision should be based solely on contractual guarantees
  • Always take the P.I.L.L. to determine if you need an annuity
  • How you only need to answer 2 questions to find the right annuity type
  • What “Will Do. Not might do.” means when considering annuities

Key Takeaways:

  • Annuities are transfer of risk contracts...not investments
  • Annuities should never be purchased for market type growth
  • Annuity quotes are like a gallon of milk because they expire every 7 to 10 days
  • Annuities (regardless of type) are commodity products

Fun with Annuities Podcast is hosted by America’s Annuity Agent, Stan Haithcock, The Annuity Man. Hear brutal annuity facts with no sales pitches from the top independent agent in the country, licensed in all 50 states. Author of 7 books, Stan dives deep on all annuity types and strategies. It’s fun, learning the contractual truths on how annuities actually work and if they’ll fit your personal retirement lifestyle. Listen in on how you can be livin’ the reality, not the dream.

Listen on Stitcher, Apple Podcasts, and Spotify. Get the best and highest confinement care and enhanced benefit quotes using Stan's proprietary annuity calculators. You can also receive all 6 of The Annuity Man Owner's Manuals for free and under no obligation and see a live feed of the best fixed rates for your specific state of residence. 


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