7 Misconceptions About Annuities And The Truth
October 8, 2019 by Tim Short
Over the years, annuities have gotten some bad press. People come into our office regularly, saying annuities are a terrible product, often with some common misconceptions. To help clear up any confusion, here are seven of those misconceptions, and the truth!
There are too many hidden fees.
There are several different types of annuities, which means that they do not all work the same way. The three major ones are variable, fixed, and fixed indexed annuities. Out of these three, the one that typically has the highest fees is the variable annuity. Some fixed and fixed index annuities have fees, but not all.
I don’t have access to my money.
This is one of the biggest objections that we hear when it comes to annuities, but the truth is you do have access to your money.
In each company’s policy, it’s stated what the penalty-free percentage is per policy year. There is what is called a surrender charge schedule, which will show you what a charge would be in a specific year and how long the surrender charges last. You have access to your money, but if you are still in the surrender charge period and go over the penalty-free amount for that policy year, you might have a surrender charge.