Did you know that when you buy an equity indexed annuity, which the industry calls fixed indexed annuity, you are not covered by the many federal and state investor protection laws?
That’s something that people selling those annuities generally don’t tell you. It’s buried in the fine print. But the regulations, the laws that cover those annuities, are insurance laws. Those insurance laws do not fit and are not protections that are going to help somebody who buys a product for investment purposes.
What to Keep in Mind When Considering Indexed Annuities
Please be aware that when your financial advisor recommends an indexed annuity, that person is not subject to the same laws as when he or she sells you a variable annuity, or a mutual fund, or any other securities product. It’s very important to keep this in mind as more and more financial advisors are recommending indexed annuities to their clients as investment products.