Annuity: MYTH #2

 

 

 

 

 

 

 

 

 

 

Misconception #2 – Annuities are expensive.

                       Fact:   MANY ANNUITIES ARE LOW COST.

While there will be some cost involved, as with most investment products, annuities offer more options and flexibility than some past annuity products with expenses and higher annual fees.  Fees are based on features and benefits chosen and explained.

Variable Annuity Fees – These fees generally cover administrative costs and risks involved with the annuity product offered; expense risk and mortality risk.

Fixed Annuity Fees – Fixed annuity fees are usually less complicated than variable annuity fees so they cost less.  For an extra charge they can be customized by adding long-term care insurance or death benefits.  There may be surrender fees associated with contract cancellation or early withdrawal.

Index-Linked Annuity Fees – Indexed annuities are a bit more complicated than fixed annuities, usually there is no annual fee.   But you will want to understand any early surrender charges, possible tax penalties and any early withdrawal adjustments.

Under some circumstances surrender fees relating to withdrawals on an annuity may be waived; such as hospital care, nursing home stays or terminal illness.

In some cases, the chosen guaranteed benefit rider may outweigh the cost factor the annuities may have over other types of investments and lower the possibility of running out of money as you get older.

Like any investment, you need to do your homework, get heads up comparisons, ask questions and work with a trusted advisor.

#annuitymyths #annuity #investments #index  #finance #money

 

Next week:  MISCONCEPTION #3 THE INSURANCE COMPANIES BENEFIT, NOT YOU.

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