Variable and equity indexed annuities are another form alternative investments involving mutual fund type and/or insurance products which occupy a large portion of the attorneys at The Law Offices of Robert Wayne Pearce, P.A. caseload. Variable annuities are mutual funds with insurance contracts with a variety of features that have hidden costs. They are not wise investments for many investors. According to Attorney Pearce the suitability of variable annuities for elderly investors and those on the verge of retirement or those seeking to make investments in 401(k) Plans, IRAs or pension plans is highly suspect. Sales of equity-indexed annuities (EIAs) have grown considerably in recent years with the promise of expensive guarantees. EIAs are anything but easy to understand; one of the most confusing features of an EIA is the method used to calculate the gain in the index to which the annuity is linked and there is not one, but several different indexing methods. Because of the variety and complexity of these annuity products, many investors are duped into buying something they don’t need, cannot afford and do not understand.
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Variable annuity investments are becoming popular among senior investors who are close to retirement. While a variable annuity can be an appropriate investment under the right circumstances, investors should be aware of their restrictive features and tax consequences. Investors should also be concerned with sales pitches. Before purchasing a variable annuity, investors should carefully investigate the product they are considering as well as the salesman. Investors should start out by reading the prospectus, which contains important information about the annuity contract terms, fees and charges, investment options, and death benefits. In addition, investors should compare the benefit and costs of the annuity to other variable annuities as well as other types of investments such as mutual funds.
EIAs are far more complex financial instruments than variable annuities. They have characteristics of both fixed and variable annuities. Their return varies more than a fixed annuity, but not as much as a variable annuity. So EIAs give you more risk (but more potential return) than a fixed annuity but less risk (and less potential return) than a variable annuity. EIAs offer a minimum guaranteed interest rate combined with an interest rate linked to a market index. One of the most confusing features of an EIA is the method used to calculate the gain in the index to which the annuity is linked. To make matters worse, there is not one, but several different indexing methods.
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The Law Offices of Robert Wayne Pearce, P.A. understands what is at stake in securities, commodities and investment law matters and constantly strives to secure the most favorable possible result. Attorney Pearce provides a complete review of your case and fully explains your legal options. The firm works to ensure that you have all of the information necessary to make a sound decision before any action is taken in your case.
For dedicated representation by a law firm with substantial experience in all kinds of Variable Annuity and Equity Indexed Annuity investment law disputes, contact the firm by telephone at 561-338-0037 or toll free at 800-732-2889 or via e-mail.
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