I was listening to a competitors’ radio show over the weekend and was not very happy with what I was hearing. They kept talking about a “new asset class” of investment that is, in my opinion, anything but that. The hook is you can have all of the upside of investing but no risk to your principal + lifetime income. Another point they made was the investor did not have to pay any fees or commissions. What were they talking about? Fixed index annuities.
I have been in business for 32yrs and annuities have been around longer than that. Index annuities of any type need to be reviewed with a fine tooth comb. There are many different features and rules written into all of them. As far as paying an agent goes, true, you may not directly pay a fee or commission, but believe me, they are well compensated. Many annuities have 10yrs. or more of large surrender charges – I am not a fan of this at all. The formulas used to calculate how you are credited gains often times are very confusing.
If you are considering investing in an index annuity, read everything and ask a lot of questions. This, like any investment you choose, should be easy for you to explain to a 5yr old. Be an informed investor.

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