Annuities are legitimate insurance products that help millions of retirees secure guaranteed income. But they are also sold aggressively by some agents who put commission ahead of suitability. Here is how to tell the difference.
Red flag #1: "This is a guaranteed return of 8%." No legitimate annuity guarantees an 8% return. Some income riders credit 8% or more to an income benefit base, but that is not the same as your account value growing by 8%. If it sounds too good to be true, ask for a written illustration and read the fine print.
Red flag #2: "You do not need to read the contract." You absolutely do. If an agent pressures you to sign without reviewing the surrender schedule, fee disclosure, and contract terms, walk away.
Red flag #3: "This is right for everyone." Annuities are suitable for some people and not others. Any agent who says an annuity is the right choice for everyone is not giving you personalized advice.
Red flag #4: "Do not worry about the surrender period." Surrender periods matter. If you may need access to your money in the next 5 to 10 years, a long surrender period is a real problem.
A good agent asks questions, explains trade-offs, shows you options from multiple carriers, and gives you time to decide. Anything less should make you cautious.
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