Chapter 6. Variable annuities
“The pure and simple truth is rarely pure and never simple.” | ||
| --Oscar Wilde | ||
The deferred variable annuity is the redheaded stepchild of annuities. Many people, including myself, believe that they are not a suitable investment for most people. They are a perfectly legal product that, when sold to people for whom they are not suited, give annuities and annuity salespeople a bad name. However, for some people, they can be a good investment.
Let’s start with the basics. Variable annuities have been described as being mutual funds wrapped in life insurance. To this definition, I would add “and covered with fees,” which is one of the major problems with variable annuities. They are just too damn expensive.
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