So do the costs of owning a variable annuity confer a significant benefit to investors? The answer is most certainly not! Insurance companies have the numbers all figured out. They employ a slew of experts to compute prices and draft terms and conditions that make it advantageous to them to own the market risk they are purportedly taking away from investors.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Variable annuities do not guarantee principal protection, so investors can lose money if markets deteriorate.
Investors cannot be urged enough to read the fine print when investing in a variable annuity. Even then, the complexity of the product may confuse an investor who is not experienced or financially savvy. This is why investors are often led into believing that variable annuities are safe and suitable and that the research should be left up to their broker. Unfortunately, those brokers oftentimes misrepresent and mislead investors into purchasing unsuitable variable annuities.
Have you suffered a loss of principal in your variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.