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Annuities: Read the Fine Print First

By: TonyBahu

Have you ever signed your name on a dotted line without reading the fine print first? Well, if you are like most people, you've inevitably probably done this at one point or another in your life. Often times, we implicitly trust the person who is selling us something and therefore we sign our names without worrying about the fine print. In a perfect world, this would be absolutely great. Unfortunately, that is not the world we live in today.

Annuities are grossly misrepresented. It is the sad but honest truth. So what makes them this way? Some agents could are less about their clients and more about their commission. Now, this is not the rule but rather the exception. I do believe that most annuity agents are trying their best to do right by the consumer. So in the defense of annuity agents, I don't think this is often the case, although it does happen.

What is more likely is that the agent may not be completely aware of what he is selling you or he has not researched enough about you to know what is important. Let's look at these two issues. First of all, for the agent who is not completely aware, please understand that insurance companies often 'sell' their products to the agents. In doing so, they present these products in the best light. If an agent is not careful and takes the insurance company's words for face value, he may be surprised to find that the annuity isn't always what they make it out to be. I've seen it time and time again.

For the latter issue, it is important that you have your agent do a PROPER assessment of your financial situation and your goals. Only then can he properly recommend an annuity that is suitable for you. In other words, if an agent is trying to sell you something without fully understanding your needs, chances are he is selling you something that may not work for you. He should not only assess your needs but also point out all the drawbacks to the particular annuity he is recommending. This should include the surrender period and charges, the length of term in the annuity, and what happens if you end up needing your money for any reason

And finally, there are two steps you must take before signing the dotted line. The first is to assess whether or not the solution offered fits all of your needs and concerns. It is best to ask the agent how this vehicle properly addresses the concerns you mentioned. Once that is established, guess what? Yes, you need to read the fine print. I can't tell you that it is easy or that you will understand everything. But I can tell you this. It's your money and you have to be vigilant. You better read the fine print because that defines the rules of the game WITH YOUR MONEY! You need to know this and understand this in order to avoid surprises.

A professional in this industry stated that 'over 90% of annuities are sold unsuitably.' I don't know if it's that high but I do know this. That means that exact number of annuities we 'bought' unsuitably. Unfortunately, once you sign the dotted line, the burden is on you. It is best to do your homework and know what you are signing. After all, it's your money and nobody should care about it more than you!

Article Source: http://articles.directorygold.com

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