Most folks, particularly seniors, are not getting exactly what they think they are, when they opt for variable annuities. They are buying life insurance as well as investing for return.
But the subject is complex, and the education the client gets comes solely from a sales person who is highly motivated by commissions that may well compensate the sale transaction more than the investor.
The plan is tax deferred and can provide payouts for a fixed period or for life. And provides a payout based on variable interest rates. Returns are also dependent on market performance of an underlying investment portfolio. There may be options for payouts, through withdrawals and a death benefit, because of the insurance inclusion.
But beware of potential slick deals: Many offerings involving variable annuities are made in states where action still has not been taken, to those who are sick and are expected to soon die, where there is no medical exam. The policies are then sold by the holders for cash right after purchase, in violation of insurance contract stipulation.
The lesson to be learned here. Be careful of insurance offers of any kind that you may get. If it sounds like you are getting too much for too little, check and check again.
No comments:
Post a Comment