Has anyone ever invseted in these looking for some feed back thanks
I have a Masters of Science Degree in Personal Financial Planning and I also own an annuity, I may be of some help. You may be able to solve your problems with several different types of investments. What are your questions?
There are several annuities in the market. Some of the most common are fixed, variable and indexed annuities. A fixed annuity is guaranteed by the backing of the insurance company and will usually provide a fixed amount of interest. You should look for companies with High Stability Ratings (Standard and Poor’s). A variable annuity will invest the money in separate accounts similar but not the same as mutual funds. A indexed annuity is much more complicated and is linked to an index like the S & P 500. It is actually sold as a fixed annuity but has participation rates and interest rate caps.
One of the biggest pros of an annuity if you annuitize (similar to making periodic distributions from traditional pension) it for life, is that you can not out live your money. You are basically betting that you will out live normal life expectancies. However, if you die early and have annuitized the annuity for your life only then the life insurance company wins the bet and the payments will discontinue. However, you do not have to annuitize an annuity you can also take random or periodic distributions. Remember though an annuity is primarily used for retirement and has early withdrawal penalties from the IRS and may have backend penalties from the insurance company. An annuity and especially a variable annuity should be used for long-term needs.
One of the biggest complaints in the financial community is that variable annuities may be expensive, so do your home work. The additional fees are charged because variable annuities usually have an insurance component call a death benefit. There are also other bells and whistles that can be added on like living benefits but I won’t get into that unless you ask.
If the annuity is a variable annuity ask the financial advisor what the separate account fees and the M&E fees are? Though annuities have been beaten up for being expensive there are companies that have fees comparable to B share mutual funds. But traditionally mutual funds will have lower fees. Remember that there are other products that may or may not fit your specific needs. A great financial advisor will try to solve your problem with a solution not just sell you a product.
