It is inevitable that everyday I get the question—Is the equity index annuity a scam? Here is my response. First of all, anything that is misunderstood is always criticized. It is inevitable that people will take shots at things they don’t know anything about. It has always happened and it always will.

Let me give you a small clue of the index annuity. It is a fixed annuity. You can’t lose money in it due to MARKET fluctuation. YOu can lose money in it if you try to get out early due to penalties. Yes, you can make more money that a pure fixed annuity but yes you can make less. Yes, it has a minimum guarantee. No, it could probably never outperform a strong bull market.

The reason it is thought of as a scam is not because of what it is. It’s because of what people THINK it is. It is sold as a stock market alternative…well IT’S NOT. It is not a stock market alternative but when someone buys it because they think it is and it underperforms, it is thought of as a scam. Furthermore, many times, the annuity agents themselves (no disrespect) have no clue how what they are selling works. Therefore, they give false expectations to the clients and then the client ends up on the bad end of the deal. Sometimes, it’s all about expectations.

Equity index annuities, like any other vehicle can be good and can be bad. It all depends on what a person is looking for. They are fixed annuities designed to provide the POTENTIAL to give a little bit better performance than traditional fixed instruments at the time. They are not designed to be stock market alternatives.

Unfortunately most people just don’t understand how they work. The bottom line is, they are not a scam. However, if you purchase one thinking it’s going to do something it’s not, you are going to believe it’s a scam. For more education read about click on Annuity Help. You will discover more than you ever needed to know about annuities. Furthermore, the Gold Package contains an entire documentary on Equity Index Annuities.

Remember, Ignorance is NOT Bliss.