Erich Maria Remarque’s epic novel, All Quiet on the Western Front, a story of young German soldiers caught in the horror of WWI, is considered one of the greatest books ever written. It tells the tale from the German infantry side of fighting a meaningless war and dealing with constant death and destruction.
The epicenter of the story is a short truce that caused the front line to fall silent, if only for a couple of days. The quiet allowed the soldiers to collect their thoughts, share experiences, and wonder about their future.
In many ways, the annuity industry has been caught just like these six young infantrymen, not quite knowing what is to come.
For many years the annuity industry was branded as a poor stepchild by many in financial planning and those on Wall Street. Our product was described as confusing, complicated, and beneficial only to the agent selling the annuity and the company issuing the annuity.
Many “urban” legends were born during this time period, such as if you die, the insurance company will keep your money, or the insurance company will pay lower than market interest rates to take advantage of the unaware consumer. Over time, the industry has been able to pull back the curtain and show an annuity for what it is, a safe and secure product that provides specific benefits to the annuity owner. The trade-off is simple; the annuity company provides benefits that help the annuity owner obtain their desired retirement goals. The annuity company gets to hold the annuity owner’s money — quid pro quo.