I hear this one all the time: "I've heard bad things about annuities." You know what I usually say? "Good. They're probably right about the bad ones." There are over 4,000 annuity products on the market right now. Some are excellent. A lot are mediocre. And a handful are genuinely terrible. So if you've heard bad things, it means you've been paying attention.
So what do the bad ones actually look like?
Three things show up again and again: surrender periods that run 12 to 15 years, variable products with layered fees that quietly eat 3% or more every year, and contracts sold to people who needed every dollar liquid. None of that is a secret. It is just rarely explained before someone signs.
And the good ones?
A good annuity is boring in the best way. The surrender period is reasonable (often 5 to 10 years), the fees are either zero or clearly tied to a benefit you actually want, the carrier is financially strong, and — most important — it only covers the portion of your money that needs to be predictable. Not all of it. A portion.
The product was never the problem. The fit was. The same contract can be exactly right for one family and completely wrong for the next.
So here's my suggestion: keep the skepticism. Bring it to the conversation. If you've been shown an annuity — by me or anyone else — and something felt off, send it to me and I'll tell you honestly what I see, good or bad.
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Author of Indexed Annuity Secrets and founder of Pacific Ridgeway Insurance Solutions in San Diego. Navy veteran. Licensed financial professional, CA #4132743.
Fixed indexed annuities are insurance products, not investments. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. This article is for educational purposes only and is not financial, investment, tax, or insurance advice.