• Addressing Annuity Critics

  • Financial Mistake: Forming unfavorable opinions based upon the claims of critics of fixed annuities without understanding the facts.

    Addressing Annuity Critics

    However, bad information is misleading. There is no shortage of either in the information age in which we live. It is prudent to research and understand the mechanics of any financial instrument you choose to utilize for savings and retirement. This includes understanding the risks, restrictions, features, and benefits and how they align with your personal financial goals. It is always important to recognize the perspective and motivation of the source of information. It is no secret that everyone is competing for your business. When present-ed accurate features and benefits of whatever financial vehicle you are considering, most people can discern what is most appropriate for themselves. However, when competitors or misinformed media make inaccurate or false claims about a particular vehicle, this can create fear based upon opinion not fact. Unfortunately, there are some who use scare tactics to try and gain an unfair advantage. So, who do you believe? Have you ever heard someone say "Get it in writing"? Well, that is precisely what you get from an insurance company who offers fixed annuities. You don't have to wonder about the risks, guarantees, or liquidity provisions of these contracts. Understanding some basic concepts and how they can benefit you is our primary concern in helping you make a decision for securing a predictable financial future.

    Annuities are not for everyone! There, we said it. So, how do you determine whether they may be appropriate for you? Hopefully, some of the information on this website will provide a good starting place, but it is no substitute for discussing your specific situation with a financial professional from Future Benefits. There are several tools that can be used to build a worry free retirement. It's about using the right tool for the right task. Think about it. You wouldn't go to a cardiologist for cataracts. Just like you can't fit a square peg into a round hole. No one financial vehicle is appropriate for every situation or all of your retirement savings. Once you have identified specific goals for your retirement planning strategy, you can then evaluate and in-corporate the most appropriate tools.

    We want to give you some food for thought, along with some statistics to support the popularity of fixed annuities for retirement planning needs. Also, we want to address some of the negative commentary from opponents and competitors of fixed annuities. Do your research, and base your opinion upon the facts not fiction!

    Sales in fixed indexed annuities increased from more than $3 Billion in 1997 to more than $35 Billion in 2012.** It's no wonder why opponents and competitors of these products have tried to portray these decisions in a negative light by indicating these consumers have been "duped" into believing these products were a better alternative to conventional vehicles. However, these claims seem to be unsubstantiated by the small number of complaints reported. In fact, in 2012 the industry reported an average of 1 complaint for every $633,000,000 of annuity premium sold, and reported 1 complaint for every 9,300 annuities purchased. Fixed indexed annuity complaints totaled 54 nationally compared to 15,000 complaints recorded by FINRA and the SEC.*** We'll let you draw your own conclusion.

    Below, we thought we would address some of the more popular claims that try to convince you to forego fixed indexed annuities as a viable alternative to conventional vehicles. Here are some of our favorites!

    Claim: Annuities are inferior investments historically outperformed by other investment vehicles.

    Fact: Although variable annuities can be considered investments as they may have the potential for loss, fixed indexed annuities are fixed products not subject to market risk. Therefore, no comparison can be drawn between the two as they are different vehicles. Critics usually do not make this distinction.

    Claim: All annuity products have fees.

    Fact: There are other annuities that have fees, but there are many fixed indexed annuities available for purchase without fees. So, not all annuities have fees. Like some other financial products, costs are built into fixed annuities, but usually there are not "fees" that could invade your principal. However, there are additional optional riders available to provide some type of enhanced benefit for a fee.

    Claim: Agent commissions are the driving force behind annuity recommendations.

    Fact: Statements designed to create doubt about the motivation of an agent recommendation have often been centered around criticism for being commission based. All financial professionals are compensated for the value they provide to assist you with retirement planning needs. Regardless of whether that financial professional is compensated through a commission or an ongoing fee structure, appropriate solution based recommendations will always come from professionals who put their customer's needs ahead of their own.

    Claim: Insurance agents are not qualified to offer financial advice.

    Fact: Agents are required by the state in which they solicit business to be licensed and complete any required company product specific training prior to offering any products for purchase. This uniquely qualifies them to offer specific financial advice as it pertains to the features and benefits of how these products can meet their goals for retirement planning needs. Agents are not qualified to offer financial advice with respect to securities unless properly licensed.****

    Claim: Insurance companies do not provide safety for your money.

    Fact: It is true that variable products offered through insurance companies may not have any provision for safety of principal, but fixed products are not subject to market loss. We trust insurance companies to protect us from risks to our homes, vehicles, health, and even our lives. This industry is very heavily regulated to protect its consumers from any company insolvencies. See this attached link regarding historical information about this subject and judge for yourself.


    Claim: Annuities are too confusing.

    Fact: Too many choices can cause confusion. Working with a Future Benefits agent who can help you understand some of the basics will reassure that these products are a good fit for you. Once you have determined that safety is paramount, it is a matter of matching the best features with your specific Claim: There are better options for IRA money than annuities

    Claim: There are better options for IRA money than annuities

    Fact: Although annuities do not provide any additional tax benefits for an IRA owner, these products are definitely appropriate for what most people consider as their long term money anyway. These can be a great source for providing an additional lifetime income during retirement or simply keeping a portion of your nest egg safe from market risks.





    Ignore the Critics and Get the Facts.

    Click here for a complementary no obligation financial review with a Future Benefits Agent

    Or call us at 901-754-2040

    *We are not stock brokers or financial advisors and do not give investment advice

    Source: www.indexannuity.org  


    *We are not tax advisors or securities advisors.

    See our Professional Disclaimer