It goes beyond that. Some people just want a guaranteed income stream and annuities are one way to generate that. Diversification can be achieved through multiple annuities. I doubt those who have annuities have all of their money tied up in them so there will automatically be some diversification. They are not a vehicle that I would use but I can see how they might be attractive to some.
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Originally Posted by l2ridehd
They are annuity salesmen selling high commission products. The only person an annuity makes sense for is a compulsive gambler who will go through all their money unless it is tied up where they can get at it. Or someone who knows for a fact that they will far outlive the actuarial tables for their current age. And the biggest downside is your investment money is now tied to a single insurance company. Zero diversification.
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