Misunderstanding #5 - "I've Never Heard Of Annuities!"

Annuity Truth - One comment I hear fairly often is:  "I've never heard of annuities." 

So, here's a little background on annuities:

• Annuities have been around since Roman times - here's a link to check out:   https://en.wikipedia.org/wiki/Annuity_(American)#History 
• One of the early recorded uses of annuities in the United States was by the Presbyterian Church in 1720. The purpose was to provide a secure retirement to aging ministers and their families, and was later expanded to assist widows and orphans.
• Some prominent figures who are noted for their use of annuities include: Benjamin Franklin assisting the cities of Boston and Philadelphia; Babe Ruth avoiding losses during the great depression, O. J. Simpson protecting his income from lawsuits and creditors. Ben Bernanke in 2006 disclosed that his major financial assets are two annuities.
• Annuities are the only financial products that will pay a guaranteed income for as long as a person/couple lives - this is something that no other financial product can match! 
• Nobody knows how long he/she will live, so annuity payouts are based on actuarial, or longevity, tables and are only issued by life insurance companies.
• So, life insurance companies issue life insurance contracts that pay a death benefit when the owner dies, and they also issue annuity contracts that pay an income as long as the owner(s) is/are alive.
• Social Security payments and pension payments are two examples of annuities - Social Security and pensions are both "lifetime income annuities."
• The Baby Boomer generation is living longer than any previous generation, and one of the biggest fears of the Baby Boomer generation is the fear of outliving their money.  Boomers are learning that they can permanently solve this problem, and create additional guaranteed monthly income, in addition to their Social Security & pensions, by using a small, calculated portion of their Retirement Savings to create their own "private pension." 
• Here's a link that provides more information:                  

           https://www.safemoneyhouston.com/withdrawal-guarantee.html

• Fixed annuities can also earn interest that's tax-deferred, and when the owners of the annuity have died, the account balance will pass to their heirs outside of probate.
• Fixed annuities are "insurance" products - they're "risk transfer" products and are not "investments" - they literally provide "insurance and guarantees" for your retirement savings. 
• These "risk transfer" products literally allow the owner to transfer the risks of              a) running out of money, and b) losing money if the stock market crashes "onto the backs" of insurance companies. 
• We use other insurance companies (health, auto, homeowner, long term care) to "manage and underwrite" the risks and expenses we don't want to deal with, e.g. hospital expenses, auto accidents, our homes burning down, having to move into an assisted living facility.
• Because their money is literally "insured" against loss, owners of Fixed Annuities receive contractual, legally binding guarantees that their contracts will never lose money if the stock market declines or crashes.

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