Purchasing a plane ticket has become as easy as doing an internet search. Finding the best annuity for your specific financial needs should be just as easy.
Websites like Orbitz, Priceline, Expedia, Kayak, HotWire and Travelocity have made buying a plane ticket fast and easy. Plane tickets are commodities. So are annuities.
Less than 5% of all annuities are purchased through direct portals. That percentage should grow, however, as people discover that annuities can be purchased online without the need to meet with a sales agent. I'm proud to say that I co-founded the first direct-to-consumer annuity website to provide that nonagent option to the consumer. I'm sure that many others will follow my lead, and that is nothing but good news to the annuity consumer.
Plan Your Contractual Trip
When shopping for a plane ticket, you know exactly where you want the flight to go. The same destination detail should apply when buying an annuity. I always tell my clients that there are only two questions they need to answer when buying an annuity:
- What do you want your money to contractually do?
- When do you want those contractual guarantees to happen?
Do you want guaranteed income right now, or do you want it to start at a later date? Is principal protection or legacy the goal? Remember that annuities are not investments. They are contracts between you and the issuing carrier, so base your decision on the contractual guarantees spelled out within the policy.
Shop for the Best Price
There's no frequent flier or frequent buyer programs when it comes to annuities. Most people don't care about the airline when buying a plane ticket, because the goal is to find the best price. The same strategy should apply to buying annuities. As I always say, "Fall in love with the contractual number, not the company name." In other words, shop for the best contractually guaranteed number and then look at the ratings and COMDEX score of the carrier to make your final decision.