The Other Problem with the Equity Indexed Annuity



Posted: Friday, September 09, 2005

by
http://www.annuitymd.com



Okay, so here is the other problem with the index annuity. Many agents try to sell it as the 'answer to all problems.' The fact of the matter is, it is not that at all. An indexed annuity is designed to have the potential to capture a little more upside than a traditional fixed annuity can.

Again, many agents claim it is a way to beat the markets...they will severely underperform in a good bull market. Furthermore, they are not designed to capture all the upside. They are designed to give a lower floor and a higher ceiling than traditional fixed annuities. They are by no means a stock market alternative.

So the bottom line is that the equity indexed annuity can be something desinged particularly to fit in someone's portfolio. It has advantages that other annuities cannot offer. It gives the protection of a fixed annuity. And it gives a little more upside than traditional safety vehicles.

All in all, it can be a good thing but it depends on an investor's situation. For someone looking for all the upside and who doesn't care about taking risk and losing money, the index annuity is far from the right choice. For someone who has a small risk tolerance but cares to have a little more upside potential, it can be a good choice.

The most important thing is to understand, any investment is part of a bigger equation. That is the bottom line. And furthermore, research is key. It is important to know what you are getting into. The further side of the spectrum is agents saying that EIA's are a scam. Those guys just don't understand how the EIA works.

Ignorance is Not Bliss.

About the author:

Tony is the CEO of www.AnnuityMD.com. He is most noted for being the Author of Annuities: The Shocking Truths Revealed and The Equity Index Annuity Exposed.



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Top-level comments on this article: (1 total)
» left by Kirk Mickelson
from Minneapolis, MN 3 years 96 days ago.
Tony, I agree with you on your comment. On the other hand you are making a living out of scaring the hell out of people when it comes to EIA's, and this is the best you can come up with. I would like to e-mail this to everyone who has paid for your advise and see who feels ripped off.
 
Kirk Mickelson
 
 
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