Annuity or guaranteed income for life: Which would you rather buy?

[LostDollar]

I know, but when I was selling them,(many years ago) it was almost always with the idea of it would provide a guaranteed income when they retired.

I think that the concept of periodic payments is the traditional meaning of the word annuity.
There may be more sophisticated nuances modern investors will attempt to apply to the word.

annuity | Origin and meaning of annuity by Online Etymology Dictionary

annuity (n.)
early 15c., "a yearly allowance, grant payable in annual installments," from Anglo-French and Old French annuité "annuity" (14c.) or directly from Medieval Latin annuitatem (nominative annuitas), from Latin annus "year" (see annual (adj.)). Meaning "an investment that entitles one to equal annual payments" is from 1690s.

That was a thing that flummoxed me in a discussion with a financial advisor about an annuity when I asked him for investment suggestions for my wife. He talked to me about a 3% return in an initial period and a guaranteed return of 1% for some time period after that. That was his discussion to me about an annuity. I thought an annuity was payments to us. My understanding of where my money was going, what control we might have over after it left my possession and when and how periodic repayments to us would occur was non-existent. (The first issue there was likely that, after 3 visits, I had come to think this person was a slick salesperson but that his interest in his share of my money was going to come well before any interest he had in my share of my money. (Would that be a failure to build trust?))

 

[rousemark]

I think that the concept of periodic payments is the traditional meaning of the word annuity.
There may be more sophisticated nuances modern investors will attempt to apply to the word.

annuity | Origin and meaning of annuity by Online Etymology Dictionary



That was a thing that flummoxed me in a discussion with a financial advisor about an annuity when I asked him for investment suggestions for my wife. He talked to me about a 3% return in an initial period and a guaranteed return of 1% for some time period after that. That was his discussion to me about an annuity. I thought an annuity was payments to us. My understanding of where my money was going, what control we might have over after it left my possession and when and how periodic repayments to us would occur was non-existent. (The first issue there was likely that, after 3 visits, I had come to think this person was a slick salesperson but that his interest in his share of my money was going to come well before any interest he had in my share of my money. (Would that be a failure to build trust?))

It seems the only things annuity agents want to talk about these days is yield, ROI, etc. The idea of providing a guaranteed income that will last as long as you do appears to have been forgotten.

 

[Markthebroker]

The heading was senseless to me.. Back in the dark ages when I sold annuities, we sold them to provide a guaranteed income for life.

Lol, "dark ages", lol. At the bottom right is rousemark writing up an annuity agreement.

 

[Tahoe Ray]

It seems the only things annuity agents want to talk about these days is yield, ROI, etc. The idea of providing a guaranteed income that will last as long as you do appears to have been forgotten.

When Athene (the current #1 seller of FIA in the country) first launched a lifetime rider, 90% of their sales were in that product and they were doing 4-6 weeks worth of sales per day.

Definitely not dead. It's probably the most talked about strategy in the market, still today.

 

[Tahoe Ray]

I think that the concept of periodic payments is the traditional meaning of the word annuity.
There may be more sophisticated nuances modern investors will attempt to apply to the word.

annuity | Origin and meaning of annuity by Online Etymology Dictionary



That was a thing that flummoxed me in a discussion with a financial advisor about an annuity when I asked him for investment suggestions for my wife. He talked to me about a 3% return in an initial period and a guaranteed return of 1% for some time period after that. That was his discussion to me about an annuity. I thought an annuity was payments to us. My understanding of where my money was going, what control we might have over after it left my possession and when and how periodic repayments to us would occur was non-existent. (The first issue there was likely that, after 3 visits, I had come to think this person was a slick salesperson but that his interest in his share of my money was going to come well before any interest he had in my share of my money. (Would that be a failure to build trust?))

You should really stop googling definitions to learn about insurance/annuity planning.

Some insurance examiners don't even understand how some annuity products work.

There are several different types of annuities.

It sounds like you were pitched a deferred fixed annuity which is like a CD.

What you were expecting is a SPIA (based on your comments).

There are lots of options. You need someone who knows your objectives AND annuities to best explain your options.

Both products pay terrible commissions vs. other products so I doubt money was the motivator.

You likely just met with someone who either didn't understand what you're looking for or didn't understand their products.

 

[LostDollar]

Lol, "dark ages", lol. At the bottom right is rousemark writing up an annuity agreement.

Not unless he has already written up the life insurance policy.

 

[rousemark]

Not unless he has already written up the life insurance policy.

Buy term, invest the difference!

 

[LostDollar]

Buy term, invest the difference!

He (Charlemagne) only had 14 more years so I'm not sure if that worked for him.

 

[DHK]

Buy term, invest the difference!

For this thread: "Buy income and invest the difference." - Curtis Cloke

 

[Rearden]

A good reminder that effective communication requires us to speak in such a way our future clients can comprehend.