Who Should Invest in Annuities - Investor Profile:
Annuities should be
purchased mainly by investors who plan to invest
for the long haul (7+ years). Because of loads
and fees associated with this product, investing
for a shorter period usually does not make
sense. Another important consideration is an
annuitant's age. Because annuities receive
preferential tax treatment, distributions before
age 59 1/2 will be subject to a 10% IRS penalty,
and potentially to any surrender charges imposed
by the insurance carrier. Annuities can make
sense for younger investors, but they should be
prepared to keep the investment until age 59
1/2. Most annuities are relatively conservative
investments. Knowing this, you can see that you
aren't going to get rich quick by investing in
an annuity. However, the slow and steady
performance, combined with a tax deferred
interest, make annuities a competitive risk
adjusted investment vehicle. In this time of
falling interest rates, it is worth pointing out
that most insurance companies do have a
contractual minimum level of interest that they
will credit, regardless of current rates. These
rates generally fall between 3.5% to 4.5% and
should be considered before you buy.Additional Information on
Annuities:
Deferred Annuities
Immediate Annuities
 Who Should Invest in an
Annuity? -Investor Profile
Tax Deferred Accumulation
Tax Preferred Payouts
Guaranteed vs. Promises
Fees
Carrier's Financial
Strength
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