I’m not sure what you know about annuities, but I will tell you that a lot of insurance agents and registered representatives don’t know as much about the products they sell as they should.
You might wonder how that can be, but if you truly knew the number of annuity products currently being offered by hundreds of companies it wouldn’t be hard to fathom.
The other thing that makes annuities rather intimidating is that since each company’s products have different features and crediting methods they can rarely be compared side by side with much consistency.
The popularity of one over another can actually be the strength of the company offering it and how effectively they market it. Some companies set themselves apart by being truly innovative and others simply get a product out there to have something to offer along with other products.
Some agents are very knowledgeable and know their products inside out. They keep up on changes and take advantage of training seminars and company experts.
Others learn just enough to be dangerous and tell clients what they want to hear and leave out the potential downside.
This has lead to improper products being sold to unknowing prospects, especially in the senior marketplace.
Typically, the main issue has been tying up the funds of the elderly for excessive periods of time when they may need to access this money for issues such as health care or long term care in the short run.
Since bad news gets a lot more press than the products purchased by clients for the right reasons, annuities in general have taken a bad rap and that is a real shame.
There are a lot of good products out there that offer low fees, principle protection, tax deferred growth, good long term interest growth, guaranteed payouts and death benefits.
They make good vehicles for trust investments and for installment sale payments, as they are backed by strong insurance companies who must keep enough cash reserves to guarantee required payouts.
Any trustee or charity that is obligated to make payments to a contracted party needs to invest this money prudently as opposed to trying to hit a home run with an unrealistic return expectation and shouldn’t be subjecting the funds to risky or illiquid assets.
Bottom Line: Annuities for the right purpose are very appropriate and effective. Always make sure you understand what you are investing in and don’t be swayed by headlines- whether positive or negative.
Paula Straub
http://www.savegainstax.com/
savegainstax@gmail.com
760-917-0858
Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
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