Fixed indexed annuity, not for everyone, but...

[Courts]

Since Vanguards name has been mentioned, here is their advice (By Objective) on investing in mutual funds....https://personal.vanguard.com/VGApp/hnw/funds/byobjective


I have invested in a closed fund (not Vanguards) that has consistantly returned an annual return of between 8% and 11%.

Of course only a small portion of my portfolio (about 15%) is invested in that fund because NOTHING is guaranteed. There is risk in EVERYTHING.

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[Icarus]

Depends on the annuity. Fixed annuities only require a life insurance license and therefore are regulated by the Department of Insurance of the individual states.

Good point. For any product regulated by the state Department of Insurance, a good rule of thumb is to check if the investment is approved for sale by the New York State department of insurance. They are perhaps the toughest regulator of any of the states, and frequently products are not licensed for sale in NYS, but are sold in other states. If it's not approved for sale in NYS, that's a good indication that it won't fly there. If it is approved for sale in NYS, you still have to do your homework.

Brokers regulated by the SEC and NASD typically must make sure an investment they sell is suitable to the buyer. The same thing doesn't apply to insurance salesman. That doesn't mean that all insurance salesmen are bad or that they all won't do that, but they aren't required to as much as brokers are. Unfortunately, it also doesn't mean that all brokers will do their job properly either.

-David

 

[Icarus]

An article about the problems in equity annuities in today's Washington Post -

http://www.washingtonpost.com/wp-dyn/content/article/2007/10/06/AR2007100600106.html

Excellent article. Everybody should read it.

Thanks,
-David