Index annuities are poison for your pocketbook


For years, Clark has warned people about something known as index annuities. They’re one of the hottest products in the investment and insurance landscape, but they’re poison for your pocketbook.

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Why index annuities stink

Index annuities really took off after the stock market got decimated a few years ago and marketers saw the opportunity to take advantage of people who were worried about outliving their money.

Of all the things you could for your wallet, buying an index annuity at any age is just about the worst thought possible.

Index annuities are sold with the promise that you can earn a return based on the stock market in good years, along with the guarantee that you’ll lose no money in bad years. That’s very attractive to someone who is 65 and worried about having enough money for the rest of their life. It’s a lure that makes people think, ‘Hey, I can play the market with no risk on the downside? What could be wrong with that?!’

Actually, so much is wrong here

  • These plans come with massive fees. There’s what’s called a ‘surrender charge’ that can hang with you for 15 years. If you buy in and then need to get out before 15 years, that surrender charge can be tens of thousands of dollars or more.
  • In most of the convoluted contracts for index annuities, the insurance company can decide to change how much these policies earn each year. So they can offer you upfront a great deal and pull a sucker move on you by changing the payout. Then you’re stuck unless you want to pay that huge surrender charge.

The number of complaints filed with state insurance regulators about people who sell index annuities around the country is huge. But state regulators often cannot or will not do anything to help those who were sold on false promises.

Here’s a final word of warning: The pitch for index annuities often starts with an invite to a free lunch or dinner seminar to learn more. Don’t take the bait.

‘That is the most expensive meal you will ever eat,’ Clark says.

If you are past 60, index annuities are a danger to your financial health, your financial security and your long term ability to live independently. Kick that insurance person who tries to sell you that junk straight to the curb!  


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Is your insurance company holding back a stash of your money?

Source: Is your insurance company holding back a stash of your money? by Clark on Rumble

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