Eric Greenhow

Annuities: Two Most Frequently Asked Questions

I’ve noticed over the years – with many clients throughout my career – that there are many concerns among investors specific to annuities.
While it’s true that annuities are not an appropriate investment for everyone, there are many concerns and misconceptions that deserve to have a little light shed on them! A good place to start are the two most commonly asked questions I’ve received.
Question 1: “I’ll get income for the rest of my life, but when I die, there’s nothing left for my beneficiaries?”
This is not always true. There are types of annuities that pay guaranteed income for the rest of a person’s life, no matter what happens to the stock market or how long the person lives – and in addition provide a guaranteed sum of money that is available to beneficiaries.
Question 2: “Aren’t fees for annuities really high/too high?”
Remember, “too high” is very relative! For example, a luxury automobile could be said to have “higher fees” (in the sense that it’s more expensive to purchase and maintain) versus a cheap, worn out used car.
Yet, many choose to spend the extra money to drive luxurious cars – they see the value, especially in the long term.
This can also be the case with annuities, depending on the individual’s needs. There are types of annuities that may offer both guaranteed death benefits as well as guaranteed income – which many other investments simply do not offer. Some individuals may need (or want) these benefits. In turn, it is true annuities often come with higher associated costs, which is worthwhile to some and not to others.
All told, there’s no sense in overlooking potential benefits of any investment vehicle! Annuities are not right for everyone – but a deeper understanding of how they work, and their pros and cons, can help anyone make empowered decisions for their financial plans.
Disclosure: Annuities are considered long-term investments, withdrawal will impact the value of your annuity and may be subject to fees and penalties. Annuity guarantees are dependent on the claim paying ability of the issuing insurance company.
This column is sponsored by Allen & Company, and the opinions expressed herein may not reflect those of CFAN or of its advertisers.
BIO: Born and raised in the Central Florida area, Eric Greenhow strives for excellence — embodying the spirit and core values of Allen & Company. He is nationally recognized for his industry leadership and community service and is a Chartered Financial Analyst® and CFP®. For more information about Eric and the Allen Investments Team, call 863.294.7411 or visit

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