Understanding Annuity Marketing: Avoiding Misleading Techniques

In the area of annuity marketing, insurance companies use a variety of techniques that could potentially be misleading. Here are some of the most common annuity marketing techniques that could potentially mislead you.

1. Unrealistic Projections

One of the most common tools that insurance companies use to sell annuities is investment projections. These companies try to convey what could potentially happen if an individual investors a certain amount of money into an annuity over an extended period of time. They say that if the investments in the annuity perform at a certain rate, you could potentially have a huge nest egg whenever you are ready to retire. Many of these tables and projections that they use do not utilize realistic investment projections.

2. Bonus Credits

Many annuity sellers offer bonus credits to individuals when they make a purchase. They make it seem as if you are getting free money for your investments. In reality, most of the time they make up for this through other types of fees.

3. Superior to Other Securities

Many times, annuity sellers are going to tell you that annuities are safer and more superior than other types of investments. In reality, since you are working with an insurance company, there is a chance that the insurance company could go out of business and you would lose your investment.