Sunday, May 29, 2005
The Problem with the Equity Index Annuity
Okay, so here is what I want to cover today...the problem with the equity indexed annuity. What do I mean by problem? Well let me explain.
When we think of the word equity we think of the stock market. And when we think of the stock market, many of us have a bad memory of the severe losses sustained in the recent market decline. Well, the problem is, the equity index annuity is a FIXED annuity. However, the name would have you think otherwise.
Now let me preface this by sating, not all index annuities were created equal. Some of them just flatout suck and end up really nailing the client to the wall. So before you go out and buy one, do your homework. But, here's something you need to know. Although the UPSIDE performance of an indexed annuity is based on some index of the market, it is a FIXED annuity. This means, barring any disasters, IF you hold it the full length of the term, you cannot lose money...in fact, you can only make money. Now, again, don't cofuse this with a variable annuity that invests in an index. I am talking about a fixed equity index annuity.
So to me, one of the biggest problems with the EIA is the name....Who is the idiot that called it that? I get more people asking me about that than any other question. Yes, the name is confusing and somebody should change it.
So you may think this is my personal issue, but I am honest in saying, it is the fact that it is so confusing for clients. The name has one believe that there is stock market risk involved. Now, there is one other huge problem with the index annuity. I am going to share that with you tomorrow. Please stay tune because this is a good one.
By the way, I never tout my product, but I think this time I will. The Shocking Truths Revealed is a book I wrote that really goes into detail about how people get hurt with annuities and how you can avoid these mistakes. IF you haven't seen it, go to http://www.AnnuityMD.com. It is worth checking out. And I wrote a follow up book which can be picked up as an upgrade STRICTLY on the equity index annuity. This is a must if you are thinking about these vehicles. Okay, that plug is over.
Thank you and remember,
Ignorance is NOT Bliss.
P.S. Here are a couple of more resources. I like to share them with you and I hope you don't mind:
Mortgage
Jewelry
Dimaonds
When we think of the word equity we think of the stock market. And when we think of the stock market, many of us have a bad memory of the severe losses sustained in the recent market decline. Well, the problem is, the equity index annuity is a FIXED annuity. However, the name would have you think otherwise.
Now let me preface this by sating, not all index annuities were created equal. Some of them just flatout suck and end up really nailing the client to the wall. So before you go out and buy one, do your homework. But, here's something you need to know. Although the UPSIDE performance of an indexed annuity is based on some index of the market, it is a FIXED annuity. This means, barring any disasters, IF you hold it the full length of the term, you cannot lose money...in fact, you can only make money. Now, again, don't cofuse this with a variable annuity that invests in an index. I am talking about a fixed equity index annuity.
So to me, one of the biggest problems with the EIA is the name....Who is the idiot that called it that? I get more people asking me about that than any other question. Yes, the name is confusing and somebody should change it.
So you may think this is my personal issue, but I am honest in saying, it is the fact that it is so confusing for clients. The name has one believe that there is stock market risk involved. Now, there is one other huge problem with the index annuity. I am going to share that with you tomorrow. Please stay tune because this is a good one.
By the way, I never tout my product, but I think this time I will. The Shocking Truths Revealed is a book I wrote that really goes into detail about how people get hurt with annuities and how you can avoid these mistakes. IF you haven't seen it, go to http://www.AnnuityMD.com. It is worth checking out. And I wrote a follow up book which can be picked up as an upgrade STRICTLY on the equity index annuity. This is a must if you are thinking about these vehicles. Okay, that plug is over.
Thank you and remember,
Ignorance is NOT Bliss.
P.S. Here are a couple of more resources. I like to share them with you and I hope you don't mind:
Mortgage
Jewelry
Dimaonds
