God Doesn’t Sell Annuities
The guy who made the appointment that I’m talking about today started with one question, he asked: “Bryan, are you a Christian man?” I’ll give you guys the same answer I gave him. Yes, but it doesn’t have any relevance to the advice I give and should have no bearing on the financial decisions you make. Saying I’m a Christian does not make me a Christian and I’m pretty sure God doesn’t care about maximum profitability of your retirement assets. If anyone uses religion for credibility in this business you can almost guarantee you’re about to get screwed.
Last year I ran an episode about a fraud case in Arizona involving annuities. I met a couple who had been abused by greedy agents and it had cost them more than $100,000 in retirement savings. Fortunately they had a full paper trail of all financial transactions going back to the beginning of their annuity journey. It was easy to prove that fraud existed but difficult to get regulators to notice and even harder when the agents involved pushed back with their own defense. The process had a happy ending for the consumers because the case was settled and they were made whole and refunded the premiums for their last annuity purchase without paying surrender charges.
It was difficult to say the least. I was even threatened with a lawsuit which didn’t bother me but it shook the resolve of the people I was trying to help. Thankfully they were very tough and held it together for the six months or so it took to finalize things. It wouldn’t have happened if they had shown the slightest hint of weakness. I ran into another one a couple weeks ago and it won’t have the same happy ending. It’s happening right now and these new consumers don’t know they are being scammed. I’m going to explain this story and let you guys know that this still happens all the time. The annuity business is getting better but there are still bad actors doing a lot of business.
The new couple is in Texas and the wife received a sizable inheritance from her parents a little over two years ago. The couple was split about what to do because one wanted maximum growth and the other wanted safety. They compromised and bought two fixed indexed annuities for a total of $1.5M. Two years have gone by and the contracts are doing well with one of them up a total of 9% and the other has yielded close to 19%. Nothing to complain about, right? It’s a good blended yield and the couple should be happy with the results and only eight years to the end of the surrender schedule.
The agent who sold it claims that he has a better product and that they should surrender the initial contracts. He said that there’s a new product that will provide much more benefit than what they currently have and it’s worthwhile to take a bonus on a new contract that will cover the surrender charges. The agent steered them right the first time so they were inclined to trust him, but the husband was at least skeptical enough to call me. There are certain reasons and scenarios where it makes sense to surrender an annuity but this transaction does not meet the criteria. There’s no chance the agent is doing anything more than abusing trust and looking to make money all over again. But he prayed before meetings and told these guys he’s a God-fearing man.
Most people surrender an annuity because of poor performance, undisclosed product features, more growth potential, or changes in financial goals. It’s only appropriate to go into another annuity if the new contract fixes the problem. Otherwise you get out of annuities altogether. If one of these issues arises in the first two years of owning a contract that is usually a death sentence for the agent and the annuity. But this example shows us a contract that is suitable and performing well. There’s no reason to replace it.
Do you know that an agent retroactively loses his commission if a contract is canceled in the first year? He also has to pay back a portion of it if canceled in the second year with many companies. That’s why I consider this fraud. He waited for just the right time to churn the contract and get a fresh commission. For less than reputable agents the two year mark is a big opportunity.
Between the contract that was already owned and the new contract that was proposed, we can use common sense to determine if swapping is a good deal. The current contract issued in 2023 has good rates, as proven by solid performance in the early years. The new contract has a bonus, which inherently comes with lower rates. All gains would be wiped out and replaced with a bonus and lower rates, while the contract owners start the surrender schedule all over again. Even if the insurance company cut rates on the current contract there is no reason to switch because no one would have confidence that the new company won’t do the same thing. Replacing a good contract is nothing but agent greed and that clearly hits one of the seven deadly sins!
Next week I’m going to run some stories from a client who wants to tell his story. I’m going to show you what happens when things are done the right way. I talked with this client yesterday to go over notes for our attempt at a joint podcast. When he was researching annuities he talked to several people and large companies. He feels like the annuity industry has gained a lot of credibility and converted several antagonists. While I agree in several areas there are still plenty of crooks out there so you can’t relax and take just anyone’s word for it. You have to verify what you’ve been told.
That’s why I’m here… to call it out and set the record straight. If you’re getting the run around with advice that doesn’t make sense then take your time going through the information on this site. I’ll fix it for you and get you going in the right direction.
Have a great weekend!
Bryan
Watch Episode 214: God Doesn’t Sell Annuities
Last Updated on February 11, 2026 by Bryan Anderson
