Quote:
Originally Posted by billethkid
Are they bad because "...they are NOT an investment..."?
If an annuity is paying the annual earned interest one is expecting, let's say 6.5%....and it preserves their principal....and the client is happy.....why are they labeled bad.....by some folks?
(separate issue  ) |
Because many/most see them as an investment, and, in fact, a variable annuity is sold as an investment.
As for good or bad, that is in the eyes of the client. What they are is a contract with the issuer, usually an insurance company, to but a stream of income for a period, might be a fixed term or might be for life of one or more people, and the better ones may offer a residual value if all the benefits are not paid out.
Point is, NOT an investment, a contract for a defined cash flow stream.
(at least thats my non-legal understanding)