Deferred Income Annuities (aka: Longevity Annuities or the acronym DIAs) are the product type that should dominate annuity sales in a perfect world. If all commissions for all annuity types were the same, this would actually be the case.
DIAs are actually a SPIA (Single Premium Immediate Annuity) structure. The difference comes down to when you turn on the income stream. SPIA income starts as soon as 30 days from the contract issue date and as far out as 1 year. DIA income starts as soon as 13 months from the contract issue date, and income can be deferred as far out as 45 years (with some carriers).
A Deferred Income Annuity (DIA) is a future pension-like plan that you can customize to meet your specific future income goals. The structure has no moving parts, no market attachments, and is an easily understood and fully transparent. DIAs are a transfer of risk strategy that solves for what I call “Income Later."
DIAs are the future of the annuity industry (in Stan The Annuity Man's opinion) because they are simple, efficient, and easy to understand transfer of risk strategies that solve for future income needs. In combination with Qualified Longevity Annuity Contracts (QLACs), which is another form of a DIA, the Deferred Income Annuity product will eventually be the top-selling product type in the annuity industry.
Regardless of what the agent wants to sell or the carrier wants them to push, the annuity consumer will demand DIAs over more complex offerings.
In this episode, The Annuity Man discusses:
- What is a DIA and how does it work
- The benefits and limitations of a DIA
- How a DIA fits into your Income Floor
- How DIAs are part of Income Later planning
- Life expectancy is the primary pricing mechanism of DIAs
- The secondary pricing role of interest rates
- DIAs can combat inflation by having income start at future dates
- DIA quotes are customizable for your specific situation
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.
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