Stinky Annuity Sales

Annuities are investments. Like any investment, it’s important to “investigate before you invest.” It’s very important to examine not only the features of the proposed investment, but also the financial, health and personal situation and goals of the investor – to determine whether the proposed investment is suitable for the investor. 

To help you investigate the purchase of deferred annuities, we’ve created the following list of circumstances in which the purchase of a deferred annuity by an older adult is very questionable. Because the sale of a deferred annuity to an older adult in such a circumstance “smells bad” to us, we call each a “stinker.”

	The annuity has surrender charges for longer than six years.
	You are likely to need principal back from the annuity while surrender charges will apply.
	You are being told that it will help you protect assets under the Medi-Cal nursing home rules.
	The salesperson will not tell you how much he or she will earn from selling you the annuity.
	The salesperson will earn a commission greater than four percent.
	The annuity will be purchased and held within an IRA or other tax-deferred account.
	The annuity will be purchased with money that you withdraw from an IRA or other tax-deferred account.
	You don’t need to pay income taxes (with or without the annuity).
	You’re being asked to convert a high percentage of your assets into deferred annuities.
	The annuity is a variable annuity, and you are unable to leave the principal untouched for 15 or more years.

May 2007

Don't forget to Ask First!

Already Purchased an Unsuitable Annuity? Go to our Who Can Help section for information on who to complain to.

This is Part 5 of the Special Report - go to Part 6.