Can I Buy an Annuity Direct?
CO-AUTHORED by Jim Farrish
I searched "buying an annuity direct" on Google and received plenty of companies, advisors, insurance agents, and annuity agents offering to sell me an annuity; however, there is not one single site that allowed me to go through the process without having to talk with someone. Don’t get me wrong, we all need help and need to learn more about annuities. But what if I just want to research different products and their benefits and run quotes to see exactly how they work? In this day and age of “Do It Yourself", why don't we have the ability to do this and purchase the product directly?
The Annuity Industry Is Resistant to Any Disruption to Their Distribution System
Put this in perspective; you can buy or lease a car and buy term life insurance, auto insurance, mutual funds, stocks, bonds, and just about anything you can think of online. Why not an annuity? Companies don’t want to disrupt their distribution source: agents. When I was a kid, our milk was delivered to our front door. However, those are the days of old. Disruption found a more efficient delivery source for consumers. Change is often good, and the process of buying annuities is changing, too.
Some Annuities Fit the Direct Distribution Model Perfectly
Steve Jobs was known for making things as simple as possible for the consumer. The iPhone has one button and a touch screen for ease of use. Just look at what happened with that idea! My second opinion on why you can’t buy an annuity online is that the products have become too complex to explain. In fact, some agents can’t explain them correctly. But, there is hope. There are four simple and basic annuity contracts that fit the majority of needs for the consumer/investor.
Single Premium Immediate Annuity (SPIA)
The name of this annuity might pass the Steve Jobs test battery of being simple. Just as its name suggests, it involves a single premium deposited into an annuity that generates income immediately. Or, as I like to say, it is simply an INCOME NOW annuity contract. If you need guaranteed INCOME NOW, research SPIA.direct. What is a Single Premium Deferred Annuity?
Deferred Income Annuity (DIA)
Again, the name says it all. Income is deferred until a time when you specify the monthly income to start. I like to call it an INCOME LATER annuity contract. If you want guaranteed INCOME LATER at a specified date, look into DIAs at DIAS.direct.
Qualified Longevity Annuity Contract (QLAC)
I wish this was named the Qualified Deferred Income Contract. It works the same as a DIA with the benefit of using IRA money and deferring it between the ages of 70 ½ and 85 without the IRS required minimum distribution (RMD). Again, this guarantees INCOME LATER at a specified date and requires no RMD. Learn more about QLACs at QLAC.direct.
Multiple-Year Guaranteed Annuity (MYGA)
Simply put, this guarantees interest for a guaranteed period. It works if you want the principle to earn a guaranteed interest rate during a specific period. I like to call this the NO INCOME annuity contract. Review all your options at MYGA.direct.
Now You Can Research Annuities Directly!
There is a site called Annuities.direct where you can learn more about these types of annuities. You can even run quotes. Is it possible to purchase an annuity contract directly? Not exactly. The annuity companies require everyone to confirm an annuity purchase with an agent for suitability. It is painless, simple, hassle-free, and completely the buyer’s choice. It is not perfect (which would be simply a direct purchase), but it is a lot better than being told what to buy. As Steve Jobs said, “A simple approach is the best approach.” It is now possible to independently research and discover the right annuity tailored to your situation.