That is literally EVERY single annuity ever developed! I’m not kidding.
December 6, 2022 by Sheryl J. Moore
Oh, Brett Arends, you had me at “higher-fee annuity products.” I expect more from MarketWatch in the article, While stocks and bonds plunge, sales of these ‘safe’ investments are booming. Annuities are not a “kind of hybrid of insurance and investment.” They are insurance. Period.
“The cost [of annuities] comes in the form of lower returns.” Of course! They aren’t intended to perform similarly to investments. Annuities provide a guaranteed paycheck for the rest of one’s life! The cost of this insurance will have the effect of drag on the purchaser’s earnings; that’s a given.
And while you feel that consumers are “going to be better off investing their money directly in stocks or corporate bonds, either individually or through low-cost funds,” what will you have them do for a guaranteed paycheck for life? Your stocks and bonds cannot provide that benefit; nothing but an annuity can!
As an aside, we quit using the terminology “equity indexed annuities” eons ago; it gives purchasers the mistaken impression that indexed annuities provide equity-like returns. It would be great if you didn’t refer to these annuities in this manner, in the future.
And as for “Arguably the most useful annuities are those that let you convert a lump sum into a guaranteed income for life,” that is literally EVERY single annuity ever developed! I’m not kidding.
I don’t endorse any company or product. I just educate people about the good, bad, and indifferent about annuities and life insurance. So next time you need to do some fact-checking, feel free to reach out. -sjm
Click HERE to join in on the conversation over on LinkedIn