Informed Annuity Buyers Act on Emotional Convictions of Safety — Uninformed Buyers Choose Based on Rates of Return

Truly. What I have been calling here as The SNAP Principle. It is the opposite of outright concerns on rate of return and all the emotional turmoil that comes with that choice.

Annuities: One of the Safest Financial Instruments Around

If you were to make a list of all the asset classes in the inventory of financial products available in the U.S. marketplace, it is safe to say (no intended pun here), that annuities rank right at the foundation of the traditional pyramid of safety. 

Annuties are Legally Binding Contracts

Annuities are legal contracts, and that is a good thing. It is much better than a handshake. Handshakes can fade, but the letter of the law sits potent in your safety deposit box where you may review your policy from time to time.

Smart People Own Annuities

It's fun to watch popular press disparage an annuity like a playground bully. Eventually, redemption always comes when there's a market correction, bank failure or some other systemic malfunction of the economy — and the naysayers hum a different tune.

Annuities Pay a Commission to the Selling Agent

The many sided argument for and against commission-based sales has gone on for decades. As a consumer, you can often sense "commission breath" from salespeople, whether that be a shoe salesman, a banker offering free checking, or a waiter offering dessert.

Annuities: Good as the Company Behind Them

Think of your annuity as the warranty on your vehicle. Imagine after nine years of ownership an issue arises requiring attention from the vehicle manufacturer. You have a written warranty in your hand that says the warranty will cover anything from bumper to bumper for ten years, period.

Annuity Contracts: Companies in the Business of "Managing Risk"

Although you can purchase an annuity from some bankers, your policy is underwritten (signed for and liability accepted) by an insurance company whose job it is to manage the financial risk — the bank where you may have purchased the annuity does not accept this risk.

Trending Tidal Waves Driving Record Breaking Annuity Sales

There are 3 trending demographic tidal waves in this country that drive yearly record breaking annuity sales. Factor #1: The Aging Trend — The U.S. Department of Health & Human Services reports, 39.6 million Americans were over age 65 in 2009.

Annuity Contracts Guarantee Lifetime Income With or Without an Income Rider

The current boom in equity indexed annuities being sold on street corners like koolaid on August afternoons has a lot to do with the invention of the lifetime income rider on annuity contracts which came out in late 2008.

Indexed Annuities Were Designed to Rob the Banker, not Raid Your Broker

The equity indexed annuity is so commonly pitched and portrayed by insurance agents as an equally matched option to your stock portfolio that it is no wonder we have the social phenomenon of the Ambiguous Annuity.

Annuities Come in 4 Different Flavors (Types)

Deciding what type of annuity the purchase is often a decision based on 2 things:

1. Your risk capacity (comfort level with financial risk).
2. When you plan to start taking a lifetime income.

Annuities: Complex Due to the Low Interest Rate Environment

Do you have any food allergies? You know, those strange physical reactions you have to certain food-stuffs that other people don't think twice about consuming? It is something you cannot overcome.