Be Careful of Annuity Termination Costs

Despite sales pitches that may overlook them, costs to amortize start ups of annuity contracts can run up to seven years.

Salesmen commissions and administrative expenses must be met. Early termination requires their faster amortization. Also management fees are imposed each year on annuities that involve variable investment.

Furthermore, the annuity may have life insurance provisions that you may not need. You will pay for that feature.

So annuities involve costs and you simply cannot drop contracts willy-nilly. There will be penalties for early termination. ( See the Earl J Weinreb NewsHole® for further comments.)