The Hidden Dangers of Annuities

Many insurance companies are promoting their annuities, indexed annuities and hybrid annuities with a 7% annuity guaranteed income riders due to low interest rates and volatile stock markets. Investors, especially retired investors who may be handling their own investments management, are encouraged to make sure they understand exactly what “guaranteed income” means.

The popular 'Income Guarantee Annuity' may provide a false sense of security. Retirees need to be warned about the hidden dangers of variable annuities, index annuities and hybrid annuities. There is a huge knowledge gap between how retirees think such annuities work and how they actually do work.

Some financial planners are often no more than glorified salespeople who are not qualified to sell these investments, and know that this knowledge gap exists. There is often the purchaser’s confusion over how the “guaranteed” 7% rider works. They typically believe it guarantees a 7% annual rate of return on their investment.

When retirees learn how their annuity’s “guarantees” truly operate, their interest in these products quickly drops. For that reason, anyone considering the purchase of an annuity with an income guarantee must do their due diligence before getting locked into a long-term contract that could cost them thousands of dollars to back out of should they change their mind.

If you or a loved one have experienced investment losses due to your stock broker/financial advisor’s recommendations of annuities, call Soreide Law Group for a free consultation with an attorney on how to potentially recover your losses: 888-760-6552.