Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Video Transcript: Hello, everyone. I'm Steve Savant, Syndicated Financial Columnist and host of the weekly online talk show, Steve Savant's Money: The Name of the Game.
I'm answering questions from insurancelibrary.com, and today's question is: is an annuity a good investment? Well, remember there are several types of annuities. And depending upon which annuity we're talking about, they're all deferred annuities that we're talking about; and it could be fixed, it could be indexed, it could be variable.
Fixed rates would be generally interest rates that are depended on the Treasuries. Most carriers buy Government debentures, and indexing is based on indices both foreign and domestic. And the good thing about that is, is that you have upside potential without any downside risk. Just keep in mind that you do have policy expenses to pay for.
Variable annuities are more market-driven and they have exposure to risk, and you could lose your principle. You need to take a risk tolerance test before you get into it. But all three have their place. You have to find out, is this an investment for you?
Well, that's our consumer question for today. If you have any questions, just submit them to www.insurancelibrary.com.
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Video Transcript: Hello, everyone. I'm Steve Savant, Syndicated Financial Columnist and host of the weekly online talk show, Steve Savant's Money: The Name of the Game.
I'm answering questions from insurancelibrary.com, and today's question is: is an annuity a good investment? Well, remember there are several types of annuities. And depending upon which annuity we're talking about, they're all deferred annuities that we're talking about; and it could be fixed, it could be indexed, it could be variable.
Fixed rates would be generally interest rates that are depended on the Treasuries. Most carriers buy Government debentures, and indexing is based on indices both foreign and domestic. And the good thing about that is, is that you have upside potential without any downside risk. Just keep in mind that you do have policy expenses to pay for.
Variable annuities are more market-driven and they have exposure to risk, and you could lose your principle. You need to take a risk tolerance test before you get into it. But all three have their place. You have to find out, is this an investment for you?
Well, that's our consumer question for today. If you have any questions, just submit them to www.insurancelibrary.com.