Owner, Best Health And Car Insurance Rates - Instant Online Quotes, US
Annuities have a bad reputation from persons that may not fully comprehend the advantages of owning an annuity. Also, some of these "experts" are compensated indirectly (or directly) by entities that compete against annuities. Hmmm. That's a bit odd!
Regardless...make up your own mind by consulting with an experienced financial planner with no bias.
In addition to Ed Harris comment on this, there has also been a few bad agents who have sold inappropriate annuities to individuals. That is why laws have been set up to make sure that an annuity is suitable for the individual. When you purchase an annuity you must fill out a suitability form. If the company see's that the annuity is not suitable they will not issue the annuity.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Why do annuities have such a bad reputation? Think of it in the same way people view certain breeds of dogs. Is it the dog that is truly bad or the owner who's made it that way? Annuities are a fine product that can work very well for most people with a variety of needs. Where problems occur is when the details inside the annuity aren't explained clearly and the fit isn't really right for the customer.
That is an excellent question! As with most things, you have to look at them carefully, and see how they are best meant to be used. In most cases, the people that will talk the worst about that thing will have either misunderstood it, or not used it correctly. Because it didn't do as they expected, they talk bad about it, and give it a bad reputation. Annuities are a complex investment vehicle, and are not the best investment for everyone. Many people have learned this the wrong way, either because they did not understand what they were purchasing, or because it was not clearly explained to them. Some folks will disparage another form of investment if what they are trying to sell you pays them a salary, or a commission. It's along the lines of the question" Ever wonder why your stock broker/mutual fund manager drives a better car than you do, if he's working with your money"? Annuities can be excellent retirement vehicles if they are the right vehicle for you. They can be very safe, and can provide a secure source of income. So if there is a bad reputation to them, it derives from being misinformed, or misused, and not because of the product itself. I hope that helps, thanks for asking!
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
An annuity provides something that no other financial product offers, a lifetime of income payments. Some planners think that they can do the same thing and will run projections to your age expectancy and predict a percentage of chance that the plan will work. They get a great deal in fees and commissions but criticize annuities because they hope to provide a higher monthly payout, however there aren’t any guarantees and what about living past your life expectance, half of the population does.
.JPG){kind=avatar}
Regardless...make up your own mind by consulting with an experienced financial planner with no bias.