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Fraudulent Practices in the Sale of Indexed Annuities
Headline News |
2010/09/22 10:12
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pIf approached by your broker (or financial advisor or insurance agent) to purchase an indexed annuity there are some things an investor should consider.nbsp; First, an indexed annuity (also known as, equity-indexed annuity or fixed indexed annuity) is a fixed annuity, either immediate or deferred, that earns interest or provides benefits that are often linked to an equity or stock market index.nbsp; In 2008, the National Association of Insurance Commissioners (NAIC), an association of state insurance regulatory officials, issued a a href=http://www.insurance.illinois.gov/Life_Annuities/equityindex.asp target=_blankfont style=background-color: #fefceb color=#6a4b39buyers guide to indexed annuities/font/a, which provides educational information on indexed annuties.nbsp; Did your broker provide you with one?nbsp; The Financial Industry Regulatory Authority (FINRA) also published an a href=http://www.finra.org/investors/protectyourself/investoralerts/annuitiesandinsurance/p010614 target=_blankfont style=background-color: #fefceb color=#6a4b39investor alert/font/a on indexed annuities./ppUnscrupulous brokers take advantage of naïve, unsuspecting investors, especially seniors, and heavily pitch purchases into indexed annuities.nbsp; Often they will tout indexed annuities as being better than bank CDs and will convince investors to liquidate their CDs to buy an indexed annuity.nbsp; Investors with variable annuities are often approached by a broker to buy indexed annuities, touting them as being safer than then variable annuity, which has investment choices whose principal can be subject to market volatility.nbsp; Did the broker recommend you to consider moving money into the fixed account of the variable annuity?nbsp; If not, the broker is probably only motivated to earn a commission which can be as high as 5%.nbsp; Another fraudulent tactic is to entice an investor with an “upfront bonus” to buy an indexed annuity but what a devious broker may not tell you is that often you would have to annuitize the annuity in order to take advantage of the bonus benefit – it’s not free money, there’s a cost to every benefit in an annuity.nbsp; Other brokers may convince you that the annuity they sold you earlier is now out-of-date and try to sell you another annuity claiming to have “better and more features.”
a href=http://suemyadvisor.com/blog/investor-alerts/fraudulent-practices-indexed-annuities-61http://suemyadvisor.com/blog/investor-alerts/fraudulent-practices-indexed-annuities-61/a/p |
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