Variable Annuities: What to Ask Before Investing

by Wall Street Fraud on January 12, 2012

annuity fraud attorneysAs we have discussed on this blog, variable annuities present numerous risks for investors. Therefore, we have cautioned our readers to be wary of sales pitches involving these products.

Of course, investing in a variable annuity is not always a bad idea. Investors just need to carefully understand and consider the risks and advantages before turning over their hard earned money. CNN recently ran a great article that suggested that investors considering a variable annuity ask their salesperson three key questions before investing. We thought they were worth sharing.

Question 1: Why, exactly, do I need a variable annuity?

Your salesperson/advisor should be able to articulate why he or she is recommending the annuity. In addition to touting the advantages, the adviser should also not gloss over the downsides. While variable annuities offer tax advantages and guaranteed income, these rewards are often overshadowed by the risks.

Question 2: What will the annuity cost me?

Variable annuities also come with a number of fees. These include insurance charges, investment management fees, and fees for various riders and extra features, which can often total upwards of 3% a year. As we have mentioned before, you will also have to pay surrender fees if you pull out your money within a certain period of time (typically six to eight years) after buying.

Question 3: Can I achieve my goal without a variable annuity?

Although salespeople may make it seem like a variable annuity is the ideal solution for your needs, there are always other options. In fact, many of these options may be more suitable.

If you have been sold an unsuitable annuity, we may be able to help you recover your losses. Contact us today at 215-839-3953 for a free consultation.

At Wall Street Fraud, we are dedicated to offering assistance to those who have been hurt by improper corporate or investment practices.

If you have been the victim of stock brokerage fraud, securities fraud, mutual fund fraud, stockbroker fraud, annuities fraud, or any other type of investment fraud, please contact us today for a free case evaluation. Our talented and aggressive legal and professional staff is eager to help you recover your losses.


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