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Annuity FYI’s Variable Annuity Cautions — Read Before You Invest!

Annuity Caution #7: Variable Annuity Rider Buy Backs

Recently, annuity-owners of variable annuities with riders from insurance companies, such as Axa Equitable and The Hartford, have been contacted by their insurance company issuer. The offer is in writing, and sometimes followed up with a phone call, with offers to pay the annuity-owner a one-time lump sum to relinquish (void) some of the initial riders with guarantees, benefits that rely on the insurance company to pay them. Is the lump sum better or the long-term guarantee? Read this before you invest!

Annuity Caution #6: L-Share / Short Surrender Annuities

Be cautious about purchasing a variable annuity with a shortened (3-4 year) surrender period. They could cost you more. Read this before you invest!

Annuity Caution #3: Variable Annuity Transfers

Are you considering a replacement of your current variable annuity with another? Read this before you transfer!

Annuity Caution #2: FINRA Broker Lookup

Prior to purchasing an annuity, look up your financial advisor on FINRA’s website to see if he or she has any complaints on file or a criminal background. Read this before you invest!

Annuity Caution #1: Pre-Purchase Annuity Checklist

Prior to purchasing a variable you should consider the information below. Read this before you invest!

Articles & Guides

Annuity Warning #5: Fixed-Indexed Annuities

Question #1: What is the participation rate? Most fixed-indexed annuities limit interest crediting with the participation rate. For instance, the insurance company may declare a participation rate of 90% which means the annuity would be credited with only 90% of the interest experienced by the index for that year. In other words, if the index …

Annuity FYI Warning #8: Immediate Annuity Payout Rates Aren’t What They Seem!

A lot of companies and websites advertise immediate annuities and post enticingly high “payout rates.” For example, as of this writing I am seeing advertised on the Internet immediate annuity payout rates as high as 20%. Who wouldn’t be attracted to this when 1-year certificates of deposit (CDs) are paying currently 1% or less? Well, you shouldn’t …

Annuity Caution #7: Variable Annuity Rider Buy Backs

IS YOUR INSURANCE COMPANY ASKING TO BUY BACK YOUR VARIABLE ANNUITY RIDER? Recently, annuity-owners of variable annuities with riders from insurance companies, such as AXA Equitable and The Hartford, have been contacted by their insurance company issuer. The offer is in writing, and sometimes followed up with a phone call, with offers to pay the …

Annuity Warning #4: Fixed Annuity Rates

1. Is your fixed annuity interest rate really fixed, or can it decrease over time? Typically, an annuity company will give you a particular rate up front on a fixed annuity, and then decrease that rate over time (typically after one year). This is what is commonly referred to as a banded rate annuity. The …

Annuity Warning #3: Variable Annuity Transfers

What You May Not Know About Transfers Are you unhappy with your current variable annuity performance and thinking of transferring it to one you hope will perform better? If so, be aware that even if you execute a 1035 Tax-Free Exchange (or qualified transfer in the case of IRAs)you may still have a large surrender …

Annuity Warning #2: FINRA Broker Lookup

Before putting your trust and financial future in the hands of a financial advisor, do a quick, free background check with the FINRA. Here’s how. The FINRA provides a free online background check where you can look up a broker’s employment history and professional qualifications, including exams that they have passed. But perhaps most importantly, …

Annuity Warning #6: L-Share / Short Surrender Annuities

Beware if your financial advisor is trying to sell you an annuity with a shortened (3-4 year) surrender period. They cost you more and pay your advisor a higher commission. Read this before investing Quick Overview First, let’s review annuity surrender charges. Most annuities have a surrender charge — a penalty for making an early …

Annuity Caution #1: Pre-Purchase Annuity Checklist

You want to be well-informed to purchase the best annuity benefits and interest for your situation. AnnuityFYI suggests that prior to purchasing a variable annuity you should consider the answers to thequestions below about the annuity, the insurance company issuing the annuity, and the broker selling it. Considerations About the Annuity Do your variable annuity …

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Annuity Caution #1: Pre-Purchase Annuity Checklist

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