Common Annuity Concerns

Some disadvantages on life annuities

concerns about annuities
Figure 1. Concerns about annuities

4 Common Concerns About Annuities

Below are some most common disadvantages when purchasing a life annuity.

  1. You lose control of your assets
  2. You exchange control of your assets for a predictable and sustainable retirement income for your liftime.

    An annuity should be part of a balanced financial plan, not the entire plan.

  3. Your locked-in for life
  4. You can ladder their annuity purchases as they age and need to guarantee more of their income.

  5. When you die, your beneficiaries receive nothing
  6. This is true for a no gurantee period option whewre beneficiaies receive nothing. However an annuity can be set up so if the annuitant dies before a pre-set date the beneficiary can receive income payments until that date.

    Refund options allow a beneficiary to receive the difference between the original premium and the payments already received either as a lump sum or as a continuation of the annuity payments.

  7. Low interest rates won’t generate a lot of income
  8. An annuity can generate an attractive return the older you are when you purchase an annuity, the more attractive the income becomes.


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