Understanding the Different Types of Annuity Clients | 7 Figure Annuity Sales Podcast | Ep. 235

Today we're going to talk about the four types of safe money clients.

Hello, everyone. I'm Chad Owen, the annuity sales coach. Here's my sidekick, Boy Wonder. We're back to Boy Wonder.

I kind of like that one, actually. Like. Yeah, it's fine.

Wonder Boy is actually kind of funny, too.

Yeah. But Wonder Boy, I think that's what. If you ever watch the animated Hercules. That's what Meg calls Hercules. My name is Hercules.

I think I prefer Wonder Boy. Oh, Wonder Boy, I don't need you.

As much as you look like Meg.

You know, corporate needs you to find the differences between this picture and. And this picture. They're the same picture, and you don't look like Hercules. Although the curly little hair, which we don't know, is currently veiled under a hat.

Yeah.

Second week in a row, he can't get his hair right. I'm telling you, wearing the same shirt.

Yeah.

Way to go. Yeah, I'm wearing the same shirt, too, though.

You always wear this?

I always wear. It's.

What's funny is if somebody were to see you out, they'd think, oh, man, Chad has a polo. No, he's got like three. Three dozen polos.

I do.

They do. I. It's. Well, because I like having a nice, crisp, clean shirt. Yeah. And so, yes, I am definitely one that will wear my polos quite often. Unless it's not a polo day. Like, if I don't have podcasts or I don't have webinars or I'm not running appointments, what do I wear then?

Oh, it's a T shirt.

My graphic tees. Yes. My heavens.

Armory tees.

Absolutely. So there. If you. If you want to. Some of those, you'll see every once in a while. My failure is not an option. It's on heavensarmory.com and yes, that's a shameless plug because I love those shirts, man.

I love cross pollination at its finest.

It is. Exactly. Exactly. If you want to buy an annuity, go to Eagle Shadow Life Annuity. Oh, wait, we're talking to annuity people. Okay.

We have. That is a funny concept, though. Didn't you. You had a client that ended up becoming a client because they found.

They found the podcast. Yes, yes. It's not fully a client yet, but it's someone that I've been talking with.

Yeah.

So I have. I actually have another call with them coming up, so. Okay.

All right. Well, the four different types of. And we use the term safe money clients here, but really, it's because we're Referring to a few different annuity products that they're. They're in the fixed category, meaning they don't go backward due to market volatility and losses.

So I'm really curious about this. I have no idea where you're going with it.

Yeah, so the four basic clients, I'll just list them all out. And you gotta bear in mind every client's needs are different. But these are the four basic categories that anybody that's looking for a fixed indexed, a regular fix like a myga, a spia, they're gonna fall into these types of categories. Number one, you've got the people that are looking for income now.

Y.

Okay, You've got income later, you've got personal accumulation.

Okay.

And you've got legacy planning. Those are the main four. Now your.

What about legacy accumulation with income for life?

See, and that's a. That's a combo of the two. And that's where. Like that, that's. To me, that's two separate.

So you're saying you get. You have four majors, but then you can cross pollinate.

Oh, they'll. You'll have. Right. And in fact, it's. I see it all the time when I'm working with agents where it's like, yeah, man, they'd like to get an ext. $2,000 a month if they can. You know, which is actually pretty significant. And they'd also like, well, 2,024 a year.

Yeah, you don't have to put in that much money to get 24 a year.

You're looking, what, quarter million? At least 250 to 300ish. Yeah, well, some of these payout factors now are north of 7%, which is.

Yeah, that's the thing. It just depends. So if you talk 500,000 at 7%, that'd be 35,000. So let's see, 5% of 3. 300,000. No. What did you say? 7%. Sorry. So 7% of 300,000 would be 21,000. So. Yeah.

Not a ton. No, you don't have to use a ton.

Well, and that's. And those are generally. You're talking about the immediate annuities, right?

Sometimes, yeah. Now the SPIAs, this is interesting because you've got. You've got your traditional spia. The problem that I have with SPIAS is that it's annuitization and annuities.

What do I say? You might as well write a check to the insurance company. The money's gone. You can't go ever get any back that principal. You're not Going to get an increase in pay. Now I know there's ones out there with inflation protection, but you always have to take a lot less in the beginning.

Yeah, it's I and I. I've written, golly, a couple of different articles. None are published, but I enjoy writing. It's like literally. Chad, sometimes you don't know this. You're learning something about me today. There are, there are weekends where like after church I'll go to a coffee shop with my laptop for, for two or three hours and just write about this stuff.

Then why aren't we publishing these things? What the heck? Why are they just sitting there doing nothing?

I have probably 25 to 30 pages of information.

Is this for client based or agent based?

It's designed to be education period. So just purely educational.

Why are these not deep thoughts from Caleb on our website? Why is that not.

We can add them. We can add them.

Okay, we are going to add those. What the hell.

But I talk in.

How long have you been doing this?

A month and a half, two months.

Oh, okay, so it's not like something a long time. Okay, I want those on our website.

Okay. Maybe one of the things I talk.

About, I'm going to charge you rent space now just because you were stupid and not letting me know.

One of the things I talk about in there after I was pretty much at the end of one of these articles. But I talk about how I love annuities, but I actually really don't like annuitization and it's that concept specifically. And the main reason for me personally that I don't love annuitization is because of the invention of the income rider. If the income rider had never been invented, I would see the necessity for annuitization. But now that you have income riders and even income riders that will allow you to start income after 30 days, which is basically immediate income. I, I don't see the need for annuitization in as many situations. Obviously in case design there are certain things, certain situations, certain SPIAs are the only way. But fixed indexed annuities with income riders are gonna cover most of your income needs for now and.

Agreed.

So those two. Now you, you tend to emphasize the deferred guaranteed lifetime income. That's the majority of your clientele.

That is the majority. But that's because the majority of my clientele income is an issue.

Right?

I mean if you do full fact finders on everybody, I assure you most of the people you deal with and probably primary concern should be income for life. Yeah, I just had a person tell me today that that wasn't a concern for them. And I said, really? I said, so how long are you going to live for? And they go, well, I don't know, but I make enough now. I said, okay, are things going to be more expensive 10 or 20 years from now or less? Well, definitely more. Okay. You're barely making it right now. You don't think income's an issue? You know what? Maybe it is. Yep.

And that's. So I would add, that's a key distinction there. Right, Right. So you talk about if you were to go do a full fact finder. I would add, if you go do a full fact finder and you look at worst case scenario on the fact finder. Right. So, like, you can. And I guess that's in. That's implied.

That is always implied. Because I'm always using worst case scenario.

Right.

Because we. I mean, here's the thing. If I haven't had any complaints against me in the insurance commissioner, and I've had one with a Better Business Bureau, and I've said this before, it's simply because I. I wouldn't use a guy's emergency fund for annuity. And they thought I was discriminating.

He wanted to use his emergency funds in an annuity.

You said. I said, I can't do that. And they said, well, he wouldn't do it because I only had 54,000. I'm like, no, I wouldn't do it because you only had 54,000. But it's not because I didn't want to help you. It's because you had emergency funds, not annuity funds. And they just couldn't get that concept. Could I technically written a $25,000 annuity. Yes. Based off of how much they needed per month and how much he had. No, it wouldn't have helped.

Yeah. So it would just tied it up.

Yeah, exactly. And I mean, if he's making a complaint because I didn't help him with that of money, what kind of a complaint would he had if I would have put him into the annuity and now I tied up his emergency fund?

Right. Yeah. Something drastic happens and now it's locked in there.

Yeah, yeah.

So you've got those four basic categories now. You've got your income now, Generally income. Now we're talking about fias and spias. Okay. You're talking about people taking fias with income. Yes, with income riders. Talking about people taking income within the first contract year. I think by definition that's. That's generally the threshold for Being considered immediate. Most people, they think of immediate, they're thinking next week. Realistically, like it's really anything within that first year you've got income later. Typically dealing with fixed indexed annuities. I've even seen people use MyGas to try and structure this, although it's not guaranteed.

Yeah, that's the problem I have with that. You know, myga rates are really good right now, but what are they going to be in five years?

We don't know.

Well then I'll do a 10 year migrate. Okay, you do that, then you only get like 2/10 of a percent higher to tie up the money for another five years. That doesn't make sense.

And that's the challenge. I've had agents come to me before and say, you know, I want to buy a Myga and it's a 65 year old client.

I know why that happens. So this is just speculation, this is not saying everybody does this, but I think two things. People believe it's easier to sell a five year annuity than it is a ten year annuity. That is not true. If you do a full fact finder and you find out what the problem is. Number two, I think agents often go, and this is why a lot of them won't do income riders, is because I know in five or 10 years I'll have another sale. And where I'm doing an income rider, that client, once I've done that annuity with an income rider, I will never get that sale again. And you go, yeah, but that's no future business. No, it isn't a guarantee of future business. But what it is is a protection of my client's situation to where they never have to worry about income again.

Yeah.

So what's more important, their guaranteed income for the rest of their life with a safety and security peace of mind are my future sale. There's of course. Right. So yeah, that's just my two cents.

I agree. And I've had that come up before where you've got a 60, 65 year old client that's looking for a five year Myga and you're just darn near certain they're not going to die within that time period. So here in five years it's going to be out of surrender, it's not going to have the same guaranteed rate anymore. It's going to have to go somewhere, they're have to do something with it and maybe rates happen to be good again and they do another five year myga and now they've only been in Surrender for a ten year total. But more realistically, they get to the end of that five years, rates are back to normal and now indexed annuities start looking real good and you're thinking, oh, let's go get into a 10 year fixed indexed annuity. Now you're talking 15 total years tied up in surrender when you could have.

Just started there and gotten them better income.

Yeah, it's true. The third personal accumulation you're talking here, again, fixed indexed annuities, MyGas SPIA is.

Not an option and I'm actually fine with those. I mean I've helped 20% of my written volume last year was straight FIAs or MyGas and I have no problem with that. But you better make sure they have enough income coming in no matter what happens. Yep. So yeah, yeah, that's true.

And then the last one, legacy planning. In this one you could make an argument for multi year guaranteed annuities. Amigas, I really like fixed indexed annuities. When they use an enhanced death benefit feature, it's real similar in operation to the way a writer works because you get some guaranteed roll up, you get a guaranteed return. And oftentimes the guaranteed return for the death benefit is actually more than what you should reasonably expect index strategies to perform at over the long term. So when you get that really nice rollup rate guaranteed on the death benefit, if that's the purpose of the money, those, those look really, really nice.

You know, I've had a few people recently talk about legacy planning and I coined a term and I'm sure it's not the first time anybody's ever said that, but I said, what about living legacy planning? And they said, well, what do you mean by that? Say, well, you own a home is 500,000, you owe nothing on it. So you know right away when you die, they're going to have the house that they could sell. You have all your valuables here, so let's just say another 100,000. Rough estimate obviously depends on what kind of home it is and what they have inside. But let's just say you have the 500,000. Wouldn't be great to take that money now and start to put towards grandkids college funds or taking the grandkids on a Disney trip or whatever, you know, someplace, trip to a Mediterranean cruise or whatever, where you can create a living legacy of memories and you get to enjoy it now, which obviously is going to make you healthier and you better because you're actually living and moving and going and experience in life and memories with Your kids while they're alive, I assure you. Now, this obviously has to be a healthy family, because there's certain families you don't want to get on a cruise ship because half of them is going to end up missing anyway, being thrown overboard. But the reality, when it comes down to if you have a healthy, happy relationship and you're out there having a blast, the kids are going to remember that way more than they are the dollars you got left behind. I'll take a memory with my grandfather down in his basement working on one of those little push cars. I can't remember what they call them, but where they go down.

The Pinewood Derby.

Yeah, Pinewood Derby type. No, it's. It's actually like a matchbox. No. Yeah, they're.

I feel like I can envision it.

But yeah, the little car that you put on this track and you let it go and then it races and. And building stuff like that with my grandfather or just any sort of.

What do you call a bird? What? A bird box. What a bird lives in when you build a box.

A birdhouse.

A birdhouse. Thank you.

That was way too much effort and work. Yeah, a bird. You know, we used to build those. And that's, you know, that's obviously something that doesn't cost a lot of money, but, man, the memories were great. But even going up fishing with my grandfather in Wyoming, where they bought my fishing license, and to me, I remember that being. Oh, my gosh, such a big deal.

Right.

That they bought me fishing license, which probably in those days was five bucks. No, seven bucks. It was seven bucks at that time, but that was a big deal to me.

Thousand percent increase.

Yeah. No kidding, right? But, you know, living leg sees really resonate with people nowadays because most people right now believe that if they pass a lump sum of money onto their kids, it's going to be blown. That's just a general consensus. So create living legacies. Now, how do you do that? You create annuity that has an income rider on it to where you can budget how much you're going to give or spend on trips every single year. And you will never need to not do that. Unless, of course, your expenses go up, but then you have it covered there, too.

Right.

So I would recommend using the term living legacy at times.

Yeah, that's really good. My grandmother's doing it for my family this year, going on a. We're going on a cruise. She's literally paying for my immediate family of six and then my mother's two sisters and their immediate families to all go on. There's literally going to be over 12.

We're going on a cruise with grandma. Yes, we are.

Oh, gosh, no, you're not. You're going on a cruise.

Grandma loves me.

She does.

She's awesome.

But the point is she's able to do that. And it's funny enough because my grandfather, he passed away in May, but before, he was actually in insurance back in the day, and he set up their retirement really, really well. A lot of annuities. Heavy on annuities, heavy on guaranteed lifetime income. And he had a really nice life insurance policy that paid her very well. So now her income, I think her monthly income is five or six times what what she needs.

It isn't that great, though, that you never have to worry about your grandmother's financial situation.

She can do whatever she wants, whenever she wants, however she wants to do.

I mean, the kids, the grandkids. Because I know my grandmother, she was not in good financial situation. And so I couldn't help her at the time because we had no money. But I remember my uncles always putting money over to grandma, you know, and my mom couldn't do it either. She had no money. But the uncles would leave 100 here at 100 there, everywhere around the house. And so she had enough. But, man, your grandma doesn't have to worry about that.

Right? So great. Just, I, the, the more I see the guaranteed lifetime income, Chad, and the more I think about it and the more I, I talk about it, the more excited about it I get. Because even if somebody doesn't need it.

Yeah.

So they what, put it in the bank.

Agreed.

Okay. What's the problem with that? That's going to get passed on, too. Or they do the living legacy like you're talking about. They enjoy what they.

They go buy a brand new Corvette that they can barely get in and out of.

Okay, that's good.

So is that it? We got that.

Well, those are the four big categories. And I would encourage you to be very privy to top competitive products in all four of those areas. I would encourage you to be pretty well versed. You should be an expert in three or four of those top competitive products in all four of those areas. And if you're curious on kind of what I've been recommending lately and what I've been talking with agents about, feel free to reach out to me. We can have a conversation about carriers and products.

And how do they reach out to you, Kayla?

Well, you can shoot me an email, Caleb. Northtirementrealize.com. or you can give me a call at 512-798-3500. Extension number five.

I'm sorry, what was that number again?

512-798-3500, extension five. I am a product nerd. I agree so big over this stuff.

Product and excel.

You make my day.

And apparently some sort of writer that you've been holding out us. Okay. I hope this helps you helps everyone. You have a great day. And of course, happy selling.