‘Too Good to Be True’ Annuity Illustrations Spur Criticisms
March 2, 2021 by Warren S. Hersch
“There are more than 120 different indices available on indexed annuities today,” says Wink CEO Sheryl Moore. Fewer than a third of the indexes “have been in existence for at least a decade,” she adds, citing Wink’s Index Intelligence Report.
Wink’s Note: Misinformed, yet respected colleague Ethan Schwartz says:
“One can usually design a mutual fund investment that is arguably just as safe, if not safer, than the annuity — & that historically would beat the returns on the annuity 90% of the time.”
Annuities are about RISK TRANSFER, not the ability to outpace the performance of securities instruments. HOW MANY TIMES DO I HAVE TO SAY THIS?!?
The advisor who sold those mutual funds is going to make [1.00%] annually for ETERNITY, costing WAY more than the annuity in the long run!
Mr. Schwartz also takes issue with illustrations because they “don’t show policyholders what they could have earned instead with an equally safe alternative investment.”
When the last time was that you went to the dealership to purchase a BMW, & were provided with a statement about what you were missing out on, by not purchasing a Mercedes-Benz? -sjm