Can I Buy an Annuity Direct?
CO-AUTHORED by Jim Farrish
I search the words on Google, and I get plenty of companies, advisors, insurance agents and annuity agents offering to sell me an annuity, but there is not one single site that allows me to go through the process without having to talk with someone. Don’t get me wrong, we all need help, and we all need to learn more about annuities, but what if I just want to sit and research products, benefits, and even run my quotes to see exactly how they work? In this day and age of “Do It Yourself” where is the ability to research, learn, run a quote, and purchase this product directly?
The Annuity Industry Is Resistant to the Disruption to Their Distribution System
Put this in perspective; you can buy a car, lease a car, buy term life insurance, auto insurance, mutual funds, stocks, bonds, and just about anything you can think of online. Why not an annuity? My answer is that the companies don’t want to disrupt their distribution source agents. Just like when I was a kid our milk was delivered to our front door - not anymore. Disruption found a different delivery source for consumers. Change is often good, and the process for buying annuities is changing too.
Not All Annuities Are Too Complex to Understand. Some 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 touch screen to make is easy to use. Look 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, most 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 is Steve Jobs friendly. Single premium deposited into an annuity that starts monthly income to you immediately, and guaranteed for life. Or, as I like to say it is simply an INCOME NOW annuity contract. If you need guaranteed INCOME NOW research at SPIA.direct. What is Single Premium Defered Annuity?
Deferred Income Annuity (DIA)
Again, name says it all… Deferred, until a time you specify the monthly income to start, and guaranteed for life. Or, as I like to say, it is simply 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 were named Qualified Deferred Income Contract. Works the same as a DIA with the simple benefit of using IRA money and deferring it between the ages of 70 ½ and 85 without requiring the minimum distribution. Again, this is guaranteed INCOME LATER, at a specified date, and a no RMD required deferred annuity. Learn more about QLACs at QLAC.direct.
Multiple-Year Guaranteed Annuity (MYGA)
Simply put, guaranteed Interest for a guaranteed period. It works if you want a guaranteed principle with 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.
The Thing Is, Now You Can Research Annuities Directly!
There is a site called Annuities.direct where anybody can learn more about these annuities and how they work, and even run their quotes. Is it possible to purchase an annuity contract direct? The answer is almost yes. Why almost? 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 to sign yes or no. Not perfect (which would be simply a direct purchase), but 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.