Annuity Fax

There are 7 deadly sins to avoid when you are looking to buy an annuity contract. An annuity contract can help you build a stronger, more stable retirement. The problem lies with people making mistakes when they shop for or buy an annuity.

1. Know what you are buying – This is the biggest and most common mistake made, not knowing the product you are thinking of buying or that you have already bought. There are several different kinds of annuities in the market place. Each type of annuity is different and works differently, even the same basic annuity contract will vary from company to company. Know what you own, preferably before you invest.
2. Make sure you define your needs – Defining your needs is critical and will have a direct impact on the type of annuity you are looking for. If you do not want any market exposure, then look for a fixed or guaranteed annuity, not a variable. If you want market exposure, then look at a variable annuity not an equity index or fixed annuity.
3. Perception versus reality, make sure you know the reality – Just because you think a product does something, it does not mean it actually does. When you are meeting with a broker/agent/wholesaler, you will discuss several things and ideas are exchanged and sometimes the facts get misinterpreted or forgotten. It is your responsibility to understand the product you are thinking of buying or selling.
4. Know who you are working with – This is important no matter what side of the table you are on (consumer or broker). Some people will say anything to make a sale (brokers and wholesalers), and you could get hurt if the information you receive is not 100% accurate. Always verify the information you receive with a third party (like annuityiq.com) or the insurance company directly.
5. Two tiered annuities stink – There are usually very, very few reasons to buy a two tiered annuity. A two tiered annuity means you are required to annuitize the contract to receive the gains in the annuity. This type of contract is usually associated with equity index annuities. GMIB’s on variable annuities are not two tiered annuities. This is true because you only need to annuitize if the investment does not work out.
6. Be leery of equity index annuities – Not all of these products are bad, but many are confusing have hidden dangers. These “wonder” products are full of caveats and confusing information. They are not always the wonder investments they are sold as. Any annuity that pays a bonus is a product you should be extremely careful of. Think of it this way, how can an insurance company afford to pay you a 10% bonus and the broker a 7 or 10% commission and still make money? Who will pay for that bonus and commission? You will.
7. Invest your money as if there is no guarantee at all – Just because you buy a variable annuity with a living benefit that guarantees you will get your money back somehow, you should invest in a prudent manner. This means do not invest in all high risk investments. If you are a moderate investor, then you should invest moderately. Risk is still risk even with guarantees, so avoid the heart burn and invest to your needs.

A FREE TIP:To avoid making several of these mistakes, AnnuityIQ.com can help you. To better understand variable annuities and how they work, you need expert, unbiased and independent reviews. This is what we provide. If you are serious about finding the best variable annuity for your needs or you want to provide your clients with the best variable annuity product, then AnnuityIQ.com is right for you. If you are a consumer, this is your financial future we are talking about. If you are a broker/agent, this is your reputation as a broker we are talking about. Make an informed, educated and intelligent variable annuity decision, use our services at www.annuityiq.com.