Can I Buy an Annuity Direct Without an Agent?

The Annuity Industry Acts Like Direct Sales are Akin to Walking a Slackline. Not So!
The Annuity Industry Acts Like Direct Sales are Akin to Walking a Slackline. Not So!. by: Vernon Wiley/E+/Getty Images

You can buy anything online, yet you can not purchase a fixed annuity directly.

When speaking to investors around the country about investing money I get asked, “If I want to (insert various strategies or products), do I need someone to sell me a specific product?” They know what they want, but aren't sure how to access it. In many cases the answer is “Yes, you need a selling agent”, but when it comes to buying a fixed annuity product the answer is, “Kind of, but not exactly.” While you can buy a house, a car, life insurance, stocks, clothes, or just about anything else online or direct to the consumer, it is astounding that this isn't the case with annuities still today!

You can purchase a complex variable annuity online, but not a fixed annuity!

Why not a fixed annuity?  I go to websites that claim to offer this service only to find out they are agent driven… Why?  The simple reason… the insurance industry does not believe you, the consumer, to be qualified to make a decision on your own. In contrast, you are considered qualified to buy a variable annuity online without an agent or broker. Go figure! A product with many more moving parts, higher risk to your money, and higher fees charged on your money, is available direct to the consumer, yet a fixed annuity which guarantees principle, has lower fees or no fees, and minimal moving parts or riders, is not available direct to the consumer. This is really inexplicable, so we have to play the hand we are dealt until in time the system changes.

You can obtain an initial online quote for various types of fixed annuities.

There are options for getting a quote online for fixed annuities such as Single Premium Immediate Annuities, Deferred Income Annuities (also called longevity annuities), Qualified Longevity Annuities, and Multi-Year Guarantee Annuities.

 A simple approach to learning about what annuities are available for you includes logging onto Annuities.direct. Getting a quote is the most logical place to start once you have decided what annuity works best for your objectives. But, if you are just starting to learn about fixed annuities and want information about the specific types available there are plenty of sources for that as well.

I would recommend the simple book  “The Annuity Stanifesto” available on Amazon.com. It is a straight forward synopsis on the different types of annuities available today.  

What do you need an annuity to do? Do you need income now, lower IRA RMDs, deferred income or principal protection?

As a consumer it is important to do some homework before venturing out into the annuity world. Like with any investment product define first and foremost what you want. There are four “basic” reasons (plenty of other complex reasons) to purchase an annuity contract. First, you may want income now.  You are looking for guaranteed income you and your spouse cannot outlive. Second, you want income later. You are looking for guaranteed income to start in one year, three, five, ten, etc. from now and you don’t want any investment or market risk during the deferral period. Third, you want IRA income later. You don’t want to start your distribution under the required minimum distribution rules, and you want to defer the start date beyond 70 1/2. But, when you do start the income you want it to be guaranteed. Fourth, you don’t want income, but you do want guaranteed interest rates credited to your money for a fixed number of years (generally 1-10 years) guaranteed and not subject to market risks.

Again, these are only four basic reasons, but they are the best reasons to consider an annuity for some of your money.

You can’t purchase a fixed annuity directly from a website, but you can research what's available.

Bottom line is we can’t buy a fixed annuity direct, but with a little effort we can get very very close to doing it all ourselves. For many that is a comforting fact to know, but there will always be those consumers who would rather talk and meet with a person to make the transaction or purchase. Both types of consumers now have options to meet their needs as they deem fit.