I use the internet every day to gather information and do research. According to the information I have gathered on Annuities you would think that Satan himself has infiltrated the Insurance world and bestowed the wrath of Annuities upon the general public.

Since I have been looking around and gathering information from my cohorts in regards to Annuities, I have noticed a couple of things about what they are saying.

Most of these “investment guru’s” are lumping Variable Annuities with Fixed Annuities (Equity Indexed Annuities are Fixed Annuities, not Variable) together.

I often see these gurus using terms such as “mutual-fund like”, “high commissions” and “pushy salespeople”. We need to look at who is trying to put a bad taste in our mouths when it comes to the benign Fixed Annuity. Because Annuities are offered through Insurance companies, they are in direct (and fierce) competition with the investments these financial websites sell and the advice they offer. If you go to a car dealership to buy a Dodge, chances are they are going to tell you the Chevy dealership down the street is going to fleece you if you buy a car from them.

I am not selling anything from my website, just offering advice and opinions. I will continue to do my best to help you cut through the jargon so you can make informed decisions.
Here is the real deal: All Annuities are either Variable or Fixed. To be brief, Fixed Annuities place most of the risk burden on the Insurance Company. This helps to cover their assets in turn offering a lower rate. Variable Annuities shift more of the risk onto you the consumer, hence, the ability to offer a higher possible return.

Variable Annuities are considered securities because you are assuming most of the risk. Most of the Annuity bashing you’ll read out there refers to Variables and not Fixed Annuities. Many in the media confuse the two when they are as different as night and day.

Fixed Annuities offer guarantees, flexibility and most importantly: safety of principle. There has never been an Equity Indexed Annuity (EIA) that has lost investors money. They cannot lose you money. I wish I could say that was the case in my personal Mutual Funds, (which I have converted into EIAs).

Annuity sales are at a record high, but you won’t hear about that information on the same website that offers Mutual Funds or Stocks. I wonder why? Could it be because if your Broker told you about how good a Fixed Annuity is, chances are you’ll transfer your money from them and buy an Annuity? Shucks for them, now they can no longer charge you those nice fee’s that come off the top of your gains (and losses) every year, depriving your Broker of a new set of golf clubs.
I’m not surprised at my findings. Not shocked that there is a lack of good information on Fixed annuities. These sites and firms that depend on you investing in their offerings won’t tell you the whole story.

Why not paint the Variable Annuity with the same brush as a Fixed Annuity, if they tell the consumers they are the same then what is the difference.

Comparing their Mutual Funds to Insurance companies Equity Indexed Annuities (EIAs) is like comparing bananas and baseballs. They have absolutely nothing to do with each other.

EIAs allow you to participate in the gains of an index, while your principle is protected by a minimum guaranty. Add to that the fact that EIAs don’t charge any maintenance fees and the agents are paid by the Insurance companies one time at the point of sale, you’ll begin to see why EIAs competitors only mention the Variable Annuities in their writings.

Why would you not consider an investment that offers a protection of principle through minimum guarantees, accumulated tax deferral and the ability to convert your Annuity into an income stream that will last you the rest of your life?