What Does Life Annuity With Period Certain Mean? - YouTube

Hey, Stan The Annuity Man. America's Annuity Agent. People say, "Is it Stan

the man or Stan The Annuity Man?" Well, my dad named me after Stan Musial which is

a baseball player. For all you old-timers out there, you know who Stan Musial is. Of

course I'm a contrarian. I didn't play baseball. I played basketball.

So, I digress. What are we here for? We're here to talk about immediate annuities

life with a period certain. What is life with a period certain mean? Sounds kind

of crazy. Sounds kind of complicated. It's really not. And I'm going to explain it and

even walk to the whiteboard and write it out so you fully understand it. So, with

that, let's go to the musical interlude at the sound of my clap.

So, life annuities with periods certain. Let's break that down into kind of 2

parts. Life annuity. Life annuity means it's going to pay you for the rest of your

life regardless of how long you live. It's a transfer of risk. That's the value

proposition that the only the annuity category can provide, is a lifetime

income stream. So, life only but with the period certain. So, why would you add that

period certain? I kind of call that a backstop. Meaning that there's a

guaranteed attached so that if you die early in the contract, then there's going

to be some form of payments going to somebody in your family, the list of

beneficiaries of the policy. But let's kind of go a little deeper that. I'm

going to go to the white board and we're going to draw on the whiteboard to make it

even more simple for you when we're talking about life with periods certain.

How quick was that? Didn't even see it did you? Stan The Annuity Man.

America's Annuity Agent. Fastest writer on the planet as you can just see. So,

let's talk about life with periods certain. What does that mean? I've written

down some examples for us to go through. And let's go through right now. So, let's

break down the first one. Life with 5-year certain. That means it's going to pay

you for the rest of your life regardless of how long you live. But let's just say

you died in year 3. There's going to be 2 more years of payments. 5 minus

3 equals 2, right? But what happens if you live past 5 years? You live 6

years and you die. Then there's no money left for the beneficiaries. That makes

sense? Let's do it again. Life with 10-year certain. What does

that mean? It means they're going to pay you for the rest of your life regardless of

how long you live, correct? Let's just say you die year 7. How many more years

of payments? Did I hear 3? What? Yeah, 3. Correct. There are 3 more

years of payments. If you've die in your 2, there's 8 more years of payments,

right? If you die in you're 11, there's no payments. Let's do it again.

Life with 20. Life of 20-year certain. Life means life. Life means

regardless of how long you live, they're on the hook to pay. "They", meaning the

annuity company. You die in your 11, how many more years of payments?

Do you say 9? Yeah. Okay, 9. 9 more years of payments. Do you get it? Do you get

how it works? Okay, good. Live 21 years and no more

money is left. So, what people are doing with these types of structures is

they're saying, "I want to back stuff. I want some type of a guarantee in

addition to the lifetime income transfer of risk that I'm buying with the annuity

company." And I think that's just a reflection of people worked hard. You've

worked hard. I'm assuming, right? Right? Most people work really hard. And they

don't want all of the money to go poof when they die. I did a recent YouTube

video. You need to watch about life only structures. And life only is when you're

Learjet hits the mountain, the money goes poof. It's the highest payment.

So, let's talk about the last one. Life with installment refund. They said,

"Stan, installment refund doesn't mean period certain." It actually does.

What installment refund means is this is a period certain but based on your life

expectancy to the day. So, if you said, "Stan, I want a lifetime income payment

but I want to make sure that 100% of the money that I don't use goes to the list

of beneficiaries." But I want the highest contractual guarantee. That's life with

installment refund. That's as close to having your cake and eating it

too in the annuity industry. Life with 5, life with 10, life with 20, life

with installment refund. These can also be set up joint life with 5-year. Joint

life with 10-year. Joint life with 20- year. Joint life with installment refund.

And of course, the joint life covers both lifetime income streams. Now, let's look

at it from a standpoint of where can you use this. Can you put it these structures

inside of an IRA? The answer is yes. Can you put these structures inside of a

Roth IRA? Yeah. Can you use it outside of an IRA structure, a non-qualified account?

Absolutely. The difference is how the income stream is taxed. But an immediate

annuity can't... Or a deferred income annuity can be used in all different

types of account structures. IRA, non-IRA, Roth IRA. Now, let's also take a look at

which pays the highest. Now, think logically for a second.

The less guarantee, the higher the payment, right? Because you're shouldering

more the risk. So, under the life with 5, life with 10, life and 20; the life

with five-year is going to be the highest contractual payout. Because it

has the least amount of what I call backstop in there, okay? Now, life with

installment refund. You know, people say, "What's that mean again, Stan?" And let's just

say your life expectancy is 14 years, 8 months and 3 days. So, you

got 14 years, 8 months, 3 days.

That's the installment refund. Instead of it being a 20-year period certain, it's

life with a 14 year, 8 month and 3 day period certain. That's what

life with installment refund means. That makes sense? So, I hope this is cleared up

kind of the life with a period certain. I got a couple stories I got to tell you

but I got to clean the board first. Okay, we're talking about life with period

certain income annuities. The call I got recently is the call I get every week.

It's a person that calls up. They're thinking about an immediate annuity.

They've talked to their friends that know nothing about immediate annuity.

They talk to their financial buzzers that probably don't know a darn thing

about annuities except for they hate them all for whatever reason. Which is

crazy because if you hate all annuities, you hate all restaurants. But this person

was under the assumption like too many people are. And blame the annuity

industry that life only is the only choice you have with immediate annuities

and deferred income annuities and QLACs. It's not true. The vast majority of

people that buy lifetime income annuities do not buy life only. Because

they want to make sure that there's some guarantee for their beneficiaries if

they die early in the policy. A lot of other questions I get is, "Can I do a life

with 7 year old? Life with 6-year old or a life with 11-year?" Or some weird

funky number that's not an even number like 5 to 20 or 15. Absolutely. Annuity

quotes are customized and we will quote all carriers if you said, "I want a life

with 11-year period certain." We can do that. Whatever that means to you. If

that's how you want to structure it. And again, ask yourself the 2 questions.

What I want the money to contractually do and when do I want those contractual

guarantees to start? And remember, it doesn't have to be life

only. It can be life with a period certain. Okay. So, we've covered the life

period certain. I've done another video on "What Is A Single Premium Immediate

Annuity?" which is probably a good thing to go watch because that's what are you

buy the life with the period certain. Now, with that being said, I'd love to send

you this book. Single Premium Immediate Annuity owner's manual. I actually send

you all 6 of my owner's manual. But this is the one that you need to

probably take a look at. And on the back, it shows my picture of "I ♥ Lifetime

Income." That is a t-shirt that I wear. And I do like annuities for

lifetime income. There are the only products on the planet that guaranteed

income for life regardless of how long you live. I would encourage you to go to

theannuityman.com to get a free quote. No obligation, no cost. Nobody bugging you

and call you and showing up at your doorstep. You just get the quote and

we'll send you the books and there's podcast. And again, I would encourage you

to subscribe to this channel because I release a new video every single day,

Monday through Friday. But visit us at theannuityman.com. I will see you next

time.