Annuity Myths and Realities Myth: Annuities are complicated. Reality: Although indexed annuities have different crediting methods, with the correct anniversary dates and math formula they can be solved. Variable annuities typically use mutual fund subaccounts that can be tracked. Fixed annuities–particularly MYGAs–are the easiest to decipher since it’s an interest rate for a set period
Mistakes to Avoid with Annuities Mistake: Assuming all annuities are the same. Annuities issued by different insurance companies and all operate differently. Always read the contract or prospectus, and if you don’t understand how the contract works, don’t buy it. Mistake: No beneficiary or naming the estate as beneficiary. When no individual is named as beneficiary or the
Reasons to Purchase an Annuity You can’t lose the money you used to purchase the annuity. Besides surrender charges, principal protection means you will always walk away with your contract value no matter what. While this is true with immediate, fixed, indexed, and long-term care annuities, variable annuities don’t offer this guarantee. This is the reason
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