Switching From a VA to an EIA - Who Profits?

Q. I am primarily interested in whether I should consider moving out of a variable annuity with #### and into an equity indexed annuity with ****. I have had two discussions with an insurance agent who would have me believe that EIA's are the greatest thing since sliced bread. I'm not so sure. I would be interested in having your opinion. Thanks

A. There are several issues here.

First, your 'advisor' has a huge conflict of interest. He/she probably doesn't make anything off of the #### Variable Annuity, yet if you switch he/she can make 10%.

Second, if your #### annuity doesn't have any surrender charges then you lose a lot by moving to a product with 7-10 years worth of them.

Third, in an EIA your return is based on the return of the market. You can get that in the VA and still have access to your money whenever you want.

Fourth, the **** product is terrible. Read my article titled 'Putting Lipstick On A Pig'. It is an **** EIA.

The agent probably didn't mention that in order for you to get the index return in the **** that you will have to annuitize the contract for a minimum of 5 years. If you lump sum your money instead of annuitizing you only receive the guaranteed surrender value, not the index value and not the 'bonus' if there is one on the product.

Run like the wind from that advisor.

If you want some honest help with whether your portfolio needs adjustments just let me know...

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