Indexed Based Structured Settlement Options
Indexed based annuities are an awesome deal for the insurance guy who sells them but in the end they won’t work out as well for the consumer. He wouldn’t be a good sales person if the annuity didn’t sound totally awesome as he explains it. Most of the time the annuity sounds as though the ROI is almost a guarantee or at least, that is what they want you to think. In the end most people have little to no idea what the returns are actually based on.
It may be useful to consider a few basic facts about these types of insurance investments. They are held without calculating the gains made by the dividends. Over the last half century the dividends have made up almost half the total gains from most common stock. The contract will actually limit the amount you can receive back in gains from the common stock.
Equity based annuities are by far and away the most heavily penalized when it comes to taking your money out before the predetermined maturity date. Money is therefore taken out of your pocket and withheld by the insurance company so they can meet their own margins.
Any time you are making a purchase based on commission sales it is important to know if there are different commission percentages for different products as this will often times affect what you are being sold, this is the case for equity indexed annuities.
While four or five percent are normal commissions these annuities offer the salesmen in excess of ten percent. When you know the normal commission rate is five percent and you are being charged ten, you know something is up. The sales guys are so adamant about selling these because they are what is in their best interest not yours. You bottom line could really see some improvement in these investment types if so much of it weren’t going to the salesmen.
There are no small numbers of people out there who also feel these annuities are less than attractive to the common consumer. All it takes is a search engine research for ‘equity-indexed annuities’ and ‘ class-action law suits,’ and you will find everything you need to know about how they work. If I were you I would steer as far clear as you can and spend your money on other, more ‘you’ beneficial investments.
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