Annuities
An Annuity You Really Should Avoid
Big promises but skimpy returns plague equity-indexed annuities.
By Kimberly Lankford, Contributing Editor
From Kiplinger's Personal Finance magazine, September 2010
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The pitch is compelling: Participate in the stock market's upside and avoid the downside. That's how sales agents who collect lucrative commissions peddle equity-indexed annuities. Their targets are baby-boomers who are trying to rebuild their nest eggs and are now fearful of the stock market and frustrated with bonds' low interest rates.
Most equity-indexed annuity contracts promise that you will never lose money, even if the market index declines. But these costly products give you only a portion of the market's gains, and their protection against loss is minimal. If you're looking for principal protection, consider buying a deferred variable annuity with guaranteed benefits (see Lock In Your Retirement Income).
Fuzzy math. Despite the title, equity-indexed annuities don't actually invest in the stock market. Your returns may be loosely based on a market index, but you get a lot less than investors in the actual index would receive because of caps on returns and other limitations.
For example, if Standard & Poor's 500-stock index returns 26% this year, as it did in 2009, investors in some of the Phoenix Companies' equity-indexed annuities would receive just 6.5% or less -- fairly typical for these products. Some equity-indexed annuities offer higher caps but reduce your returns by other means, such as restricting your participation rate to 80% of an index's increase or subtracting a fixed percentage (a spread rate) from the index's return. Worst of all, these limitations can change even after you've purchased the annuity. Plus, you may be locked in to the investment for seven to ten years and pay a penalty if you cash out early.
Indexed annuities are regulated as insurance products, not securities, so they offer few of the usual required disclosures to help you decipher their fees, calculate performance or even figure out how the money is invested. And the new financial-reform bill would keep it that way; it bars the Securities and Exchange Commission from implementing a rule to oversee them. For more details, see the Financial Industry Regulatory Authority's investor alert on equity-indexed annuities at www.finra.org.
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Reader Comments (26)
Posted by: James Nelson at 08/12/2010 02:41:33 AM
I can't believe the author used one Index annuity from a B+ rated company no one has ever heard of to make her INSANE point that somehow variable annuities (which keep your money at risk) are safer than Index annuities (which protect principal)! Oh Kimberly......If you had done your research, you would have found that fixed and index annuities also have income riders, some that grow the pension income account by 8% per year. Far greater than the 5%-6% return on the variables...
Posted by: Kim Lankford at 08/13/2010 08:45:39 AM
Hi James, this is Kim Lankford, author of the article. Thanks for your comment. I actually referred to variable annuities with guaranteed benefits -- not just standard variable annuities -- specifically because they offer strong principal protection. With these types of variable annuities, you choose from several mutual fund-like accounts and can actually receive the return on those investments -- unlike equity-indexed annuities, which may only credit a piece of the inde'xs return to your account. If your investments do well in a variable annuity with guarantees, then you can cash out after the surrender period and take the money however you like. But if the investments lose money, you're still guaranteed a lifetime income based on either a promised annual return -- 7% per year for 10 years, for example -- or can withdraw a fixed percentage of your investment's highest value every year, with a guarantee that you will never run out of money. As you mentioned, some equity-indexed annuities offer guaranteed lifetime income benefits, too, but there's a big difference: Your upside returns are limited by a maximum cap, participation rate or spread rate, so you're never offered the full return of the index. With those types of annuities, you can get some downside protection, but never the full benefit of the market's upside. Another big difference between variable annuities with guaranteed benefits and equity-indexed annuities is transparency: Variable annuities are regulated as securities, so the investments and fees must be spelled out in the prospectus, and the salespeople must hold a securities license. Equity-indexed annuities are not subject to these requirements. You do need to be careful of fees when buying a variable annuity with guaranteed benefits, but you can see exactly what you're paying to get this extra protection. Hope this clarifies things for you and other readers.
Posted by: TopDawg at 08/13/2010 03:51:52 PM
I bought a Midland National annuity that I can cash out in 6 years after the surrender charges disappear. It guarantees no loss of principal. Gains are capped at 2.25% per month based on the S&P 500 index changes, but from those gains are deducted all declines in the market to get a year end net result. If the market went up 2% every month consistenty, then I could make 24%, but never more than 27%. If the market seesaws up and down, it is a crap shoot exactly what return I get depending on the timing and amount of the monthly ups and downs. My financial advisor get 1% per year from the annuity firm for selling this to me. He billed it as a way to participate in market gains without risking principal. I am not especially fond of this investment so I limited how much I put in it. What do you make of it?
Posted by: Russ at 08/16/2010 12:12:19 PM
A VA is a MF with an annuity wrapper that charges high fees and can be a lifetime product for those that have lost significant amounts of principal which they needed for income. Why didn't you compare the GMWB with the fees of a more competitive FIA? Also, the difference in risk between a VA carrier and FIA carrier is significant. Since the underlying equity can lose value the VA carrier has significantly more risk associated with the GMWB rider. The FIA cannot lose principal and thus has a steady baseline to run on. The VA could lose, 20%, 30%, or more. The future income benefit is now coming out of the carriers pocket sooner with less time to make up any lost principal. This is a significant risk and has lead to many VA companies changing their fee structure or completely pulling that benefit. I felt this article was unjustly biased and not well researched.
Posted by: Alice Ericson at 08/16/2010 04:43:46 PM
This article misses two important points about equity indexed annuities and implies that owners give up too much market upside for only minimal downside protection. First, principal is protected against market losses from day one versus a typical 10-year waiting period for principal protection on variable annuities. Second, there are fees associated with variable annuities and principal protection guarantees, and these fees reduce the account value. Not every retirement planning tool is right for every individual, but indexed annuities are a smart solution for those who want to capture potential market upside while truly protecting against downside risk.
Posted by: John Buckingham at 08/17/2010 12:22:39 PM
Kimberly...First, you state that an index annuity's protection against loss is minimal. That is 100% incorrect. With an index annuity your principal is invested in Treasury bonds and it is insured 100%. You cannot lose a dime of principal in an index annuity. Second, you state that if someone wants principal protection they should consider buying a variable annuity with guaranteed benefits. This is misleading at best. A variable annuity offers NO principal protection. NONE. The guaranteed benefits have nothing to do with principal protection, they are income benefits and can be found on index annuity products as well. Third, you mention cost of annuities. An index annuity is less expensive than a variable. The reason is that it does not have M&E expenses and it does not have the underlying costs of the separate accounts like a variable annuity does. Fourth, you don't seem to understand that indexed annuities are not designed to replace equity investing. They are designed to give you SOME of the upside with NONE of the downside. In your example you mention that an index annuity got 'just' 6.5% while the market was up 26%. What did that same contract return when the S&P was DOWN 40%??? Add in the fact that index annuities provide options for how the clients participate. Some of the contracts we used were up over 30% last year. So cherry picking one is misleading. I use both variable and index annuities in my practice as both are appropriate in certain circumstances. Journalists who dismiss an investment vehicle in the manner that you did in your article are doing a great disservice to your readers.
Posted by: Jason McBride at 08/18/2010 10:41:23 PM
Same rhetoric, same errors...I can't help but chuckle that every article in all of the financial magazines dealing with an indexed annuity starts off by painting any advisor who utilizes this product as a shyster. Lucrative commissions? Not any higher than the "lucrative" commissions that a variable annuity pays, so why do you not also refer to those as lucrative? Make sure you always use words like "peddle", too. I would like you to specifically point out what you mean by "minimal" protection against loss. How can a contractually guaranteed worst possible annual result of NO loss be "minimal"?...You then go right to the next paragraph and suggest buying a Variable Annuity to protect against principal loss, which is absurd. There may be a few that have a rider you can pay extra for that will return any lost principal after a certain number of years, but they don't guarantee against principal loss on a year by year basis like an indexed annuity does. Please name even ONE specific variable annuity that will guarantee a return of your principal, at any time you want it, while you are alive. And don't try and back-pedal like you did in your response to James by saying you mean there is a guarantee for the INCOME value. You clearly stated to buy a Variable Annuity for PRINCIPAL protection. Now back up your words or at least admit you made an error...Why don't you also compare apples to apples the income rider provisions on most variable annuities against the Income rider provisions on the Indexed ones assuming the market doesn't perform so well? Head to head, the variable will almost always come out behind because not only is the guaranteed compounding rate lower on a variable, but the percentage of the income "pot" that can be withdrawn is lower, too. That means LESS income available to the annuity buyer. The fact that you veil in your article is this-both Variable and Indexed Annuities have Income riders. But the Indexed Annuity protects both the CASH Value and the Income value, while the Variable only protects the Income Value. And the annual fees for the riders? For a variable-Far Higher! By the time you load up a variable annuity with riders and figure in the cost of M&E Expenses and subaccount fees, you're looking at 3-4% per year, every year, even in the years when the market drops! The market has to go up 10% or more just for the investor to net out 6.5%, and in the down years, he can tack on another 3-4% loss on top of what the market took away from him! If the market tanks in the first couple years after a person buys a Variable Annuity, they can likely kiss any benefit of the step-ups, or "highest value every year" as you describe it-goodbye forever. But they'll still enjoy paying every year for the benefit that might have been but will now never be. You then, predictably move on to assault the fact that the upside return on an indexed annuity may be limited while conveniently leaving out the fact that the DOWNSIDE is also limited to ZERO, and you also forget to mention that any gains made in an Indexed Annuity can NOT be given back! At least once that investor made the "measly" 6.5% on the annuity, he need not fear giving it all back PLUS some of his principal if the market falls the following year. You also never seem to take into consideration that the market does not always go UP 20% or 26% in the up years. What about a year when the market goes up 6%? If the Indexed annuity Investor is capped at 6.5% he gets the whole 6%. He was not left out of any of the market gains. And as far as these limitations being able to change AFTER you've purchased the annuity, they can also change for the BETTER of the annuity investor as well. Caps and participation rates can, and do-move UP as well as down depending on interest rates and market volatility. And as far as the spread goes, if there is a spread, it can also change to the advantage of the annuity investor. But-unlike the variable product which charges the 3-4% fee every year-up or down--the spread "fee" on an Indexed annuity is NOT charged in a year when the market drops. You make it sound as if the company issuing the Indexed annuity will always change things to the detriment of the client. Nothing could be further from the truth. You then transition into saying you could be locked in for 7 to 10 years and pay a penalty if you cash out early. That is also the case on a Variable annuity! Are you really trying to portray that Variable annuities don't have surrender charges but Indexed annuities do? The surrender periods and charges are very similar on both products, and both offer a wide variety of surrender period durations. BUT-Now watch this-Investor A puts $100,000 into a Variable Annuity. Investor B puts $100,000 into an Indexed Annuity. The Stock Market Drops 40%, and they NEED their money. Investor A lost $40,000, coughed up another $3,000 in fees and rider charges, and then pays lets say an 8% Surrender charge-he gets a check for $52,440. Investor B Lost nothing, his $100,000 is still intact, he coughed up $750 in rider fees, pays the same 8% surrender charge and gets a check for $91,310. You, like most all other journalists, fail and fail miserably to either grasp or to simply help your readers understand, the devastating effects of LOSSES. As far as regulation, you can beat that dead horse all you want, but the fact is that Indexed Annuities are also highly regulated. They are simply regulated by the States instead of a federal body. I feel pretty comfortable knowing that most issuers of Indexed annuities are examined once every two years by all 50 states in most cases. That equals 25 different sets of eyes examining their products and practices every year....you can rest assured that for many advisors like myself that utilize Indexed annuities in their practices, but who also utilize mutual funds and other Federally regulated investments to create a good balance in a portfolio-the Federal Governing bodies do indeed examine and audit the sales of these products. And contrary to what you intimate-there is plenty of disclosure required and available so the purchaser can understand how the annuity works before buying. Just for once, it would be refreshing if you or any of your colleagues at similar publications would do a non-biased piece that actually does a side-by side comparison showing the strengths and weaknesses of both types of annuities. Neither is perfect, and neither is the end-all panacea for every investor. Both categories have many products that are truly a horrible proposition for the investor, and both categories contain many products that are a wonderful proposition. But the constant beleaguering by journalists...of the Indexed Annuity as a whole is tiresome, and I find it highly insulting... I challenge you to do an honestly unslanted, unbiased, well-researched article that fairly describes and highlights not only the limitations, but also the "good stuff" about Indexed Annuities....
Posted by: Jason Williams at 08/19/2010 01:48:59 PM
The author did a mediocre job of pointing out how insurance agents are not held to the same standards as other financial professionals. Agents who are only insurance licensed can get away with a lot more in misleading presentations, marketing, advertising and selling of products. Bad actors on both sides of the fence, securities and insurance, but let's be fair to the consumer. The legislation should have made the standards the same for ALL who sell financial products, from stocks and bonds, FDIC insured CD's, to insurance products such as annuities. And for the posters claiming VA's are more expensive than Fixed, shame on you. Just because a 'fee' is not stated in Fixed contracts, the cost is still there. And again saying that 100% of the principal is protected from day one also disregards surrender charges present on nearly all annuities. If a consumer wants 100% principal protection, that is backed by insurance that can back the promise, FDIC insured CD's are the best choice. State Guarantee funds exist for insurance, but those limits in most states are below FDIC now. I know, some will want to immediately blast and give me the 'but no insurance company has every failed' story....if you are going to be truly complete and honest with the client, a fixed annuity from any carrier is risker than an FDIC insured CD. If the legislation had done anything worthwhile, it should have required all 'fiancial advisors' to disclose if they are NOT presenting solutions because they can't sell them. The insurance agent that is not authorized to sell FDIC insured CD's, or Variable Annuities, should have to refer the client to a duly authorized fiduciary that is able to sell ALL of those products. I would never deal with an agent who could only sell insurance, just as I would not deal with a real estate agent that could only sell me houses that are on the wrong side of the street. And the other post that mentioned commissions being the same on Fixed and VA's. Yes, that is true with reputable higher rated companies. But there are some Equity Fixed Annuities out there paying bonus commissions well in excess of 12% of invested assets, and luring agents with trips to Hawaii. The insurance industry should not be allowed to get away with this abuse of consumers any longer.
Posted by: Darrell at 08/19/2010 03:46:47 PM
Thank you to all of the above comments...
Posted by: Kim O'Brien at 08/20/2010 10:53:07 AM
NAFA Response to Kimberly Lankford...Your readers are woefully misinformed by this articles misrepresentation of fixed indexed annuities. It is incorrect to state that the fixed indexed annuities protection against loss is minimal. All fixed indexed annuities have a state-approved contractual guarantee that you will never lose a single penny of what you paid into the annuity (your premium) or any interest credited when the stock market goes down. This guarantee is most definitely not minimal, as the millions of owners of fixed indexed annuities who survived 2008 and 2009 with their entire annuity value intact will tell you. The guarantee is that when the market is down you will earn zero additional interest (for) that period but all prior interest and premium paid remains untouched. And, yes the tradeoff for that protection is you promise to keep the annuity through the surrender period. This protection from negative markets and the benefits of additional interest during positive markets is why people buy a fixed indexed annuity. You also state that if you're looking for principal protection, consider buying a deferred variable annuity with guaranteed benefits... The very fact that the principal in a variable annuity is not protected by market declines is what makes it a security regulated by the SEC. In your response to a readers comment you informed him that if your investments do well in a variable annuity with guarantees, then you can cash out after the surrender period and take the money however you like. But if the investments lose money, you're still guaranteed a lifetime income. This... may cause your readers to buy a product with expectations the product cannot deliver. A $100,000 lump sum invested for 7 years in a variable annuity with a GLWB guaranteed benefit will guarantee that you receive a 5% income--$7,000 annually for the rest of your life. That is a good benefit and may be a reason for people to buy it. However, they must be informed that if they take a lump sum because they feel they can do better in another financial product, their only choice is to surrender the annuity for its actual surrender value which may be higher or lower than the $100,000 depending on the underlying performance of the variable annuity. Your principal lump sum is never protected or guaranteed; only some amount of lifetime income payments. Fixed income annuities today will pay a 65 year old female the same 7,000 and a 70 year old male will receive $8,600 for life. My existing deferred fixed indexed annuity contract will pay me a minimum guaranteed lifetime income of $6,500 if I (a female) chose to take income at 65 and like most fixed indexed annuities I dont have to wait for the full term to elect income payments lasting five years or more. It is incorrect to state that some [fixed] indexed annuities offer lifetime income benefits. In fact, state insurance law requires that ALL fixed annuities offer minimum guaranteed lifetime income benefits. That is the very heart of any fixed annuity whether the interest is calculated based on an index performance or a declared rate....Finally you warn your readers that you may be locked in to the [annuity] for seven to ten years and pay a penalty if you cash out early but you do not tell your readers (until much later in response to a readers challenge) that the same is true for the variable annuity you recommend. NAFA believes that individuals should select the product that best suits their financial goals and tolerance and variable annuities have features and benefits that are desirable to many Americans facing retirement....
Posted by: Joe Anzalone at 08/20/2010 12:16:28 PM
...Indexed annuities are not investments. They are savings products, and should be compared to other savings vehicles- CDs, fixed annuities, and the like. Moreover, their returns have not been as paltry as you have suggested; see the study "Real World Index Annuity Returns," from the Wharton School of Business, recently updated in March of this year, for a more well-rounded view of their returns. -FINRA's alert on indexed annuities was written several years ago and contains gross inaccuracies of its own. Compared to many investments and their arcane prospectuses, the products are not "complicated," but rather quite straightforward. Indexed annuities are simply fixed annuities with a different way of crediting interest. They do not contain the fees wrapped into VAs; indeed, since there is no active "management" of risk, those fees are not necessary. -Finally...would you sacrifice a portion of total market return if you were insured against losses? Would such a vehicle be appropriate for a portion of your portfolio, utilized for savings purposes and deferred for an understood period of time? As many a fund manager has written during the carnage we've seen in the market in recent years, including Jon Lovelace of American Funds, it does no good to be "spectacular in bull markets...only to crash in bear markets." Limiting the downside is crucial. That is something that VAs do NOT provide. The income benefits on indexed annuities come with the added, crucial feature of principal protection in the event of a lump sum payout. Why all the love for VAs? Could it be because the securities industry reaps the benefits of their sales, whereas they make nothing on the sale of insurance products?...
Posted by: Kim Lankford at 08/20/2010 02:40:52 PM
Hi everyone, and thanks again for your comments. Please be assured that I know annuities -- I've been writing about annuities for more than 15 years and regulators have used my annuity articles to help strengthen consumer-protection laws. I invite everybody to re-read my column and my comments, and read these long comments from people in the annuity sales industry, and make their own judgment. I stand by the advice and recommendations in this column. And if you'd like some more reading on the topic, take a look at http://www.kiplinger.com/magazine/archives/2007/01/annuities.html Great Annuity Rip-Off and my http://www.kiplinger.com/magazine/archives/lock-in-your-retirement-income.html Lock in Your Retirement Income articles, which include more detail about how annuities work and how certain annuities can fit within your retirement portfolio. I hope this information helps. Kim
Posted by: Keith Young at 08/20/2010 03:07:27 PM
The author should speak with Dr. David Babbel of Wharton Business School and Jack Marrion, an expert on indexed annuities. Jack Marrion will tell the author that indexed annuities with the guarantee lifetime income rider is one of the best solutions for income solutions, not variable annuities with GMIB. Jack also will share the real returns of indexed annuities...
Posted by: Lynn B. Thurgood, CLU at 08/20/2010 03:53:56 PM
...Kim Lankford owes the fixed annuity industry an apology...It's interesting to read the comments posted thus far...
Posted by: Dennis R. Streich at 08/20/2010 06:08:00 PM
Lets see, I purchased a variable annuity approximately 10 years ago and to date is $500 shorter than what I originally put in it. It just hasen't performed very well. All of my Indexed annuities have done nothing but grow. True, the VA has a guaranteed side of 6% but then I have no choice and am stuck with regard to the amount of income it will provide with no opportunity to shop around for a good Single Premium Immediate Annuity (SPIA). I'll stick with my Indexed Annuities thank you...
Posted by: Rick L. at 08/24/2010 02:09:27 AM
...Kimberly, pick your favorite VA, tell everyone here what it is and we will *gladly* tear it apart...
Posted by: Lynn B. Thurgood, CLU at 08/24/2010 09:21:47 PM
How can Kim Lankford, author of the article, say "I know about annuities"...I guess I could say I know about quantum physics or mutual funds or about the tax code, etc... but I don't go about publishing articles about things for which I don't have complete understanding or expertise in fairness to anyone that would read my print. Or if I were to print such information that I "know about" I would certainly include a disclaimer that I am not an expert but simply rendering my personal opinion or understanding in good faith....
Posted by: David Treece at 08/25/2010 06:36:06 AM
Kimberly, your general reference to those of us who use annuities as "the annuity sales industry" is insulting. I am also a registered investment advisor, and I work as a fiduciary. I specialize in retirement income planning. That's one of the reasons I work with fixed indexed annuities... Lord knows there are tons of financial articles that are pure crap. They are designed to sell newsletters and magazines, but only serve to confuse the public. I think your article falls into that category, and it has the same kind of generalized, overly dramatic, unfair title.
Posted by: Michael Hallax at 08/26/2010 05:29:51 AM
There are annuities now that will guarantee 8% with no cap. So it depends on the individual client and the product.
Posted by: John Hose at 08/30/2010 10:09:54 AM
Ms. Lankford...You talk about caps in the F.I.A.'s but fail to realize that the average of the S&P over the past 50 years is under 7.5%. A cap of 6% with an annual reset assures the annuitant they will get a high percentage of the average gain and none of the loss. The S&P was up 36 years in the last 50. You infer misrepresentation by agents offering FIA's but you misrepresent your views. A GLIB is not a protection of principle in a VA. The fees in a VA when applied the the average of the S&P kills the growth. It is rare that clients are fully informed the cost of the fees. I have clients that have averaged 6.5% over the last 7 years in a FIA while the gross growth of the marker has been only 10%. I would do you and your mis-informed readers for you to look at the facts and print them!
Posted by: Barry Albert at 08/31/2010 01:44:25 AM
Dear Kim...I believe that you forgot that VA's with riders have very high fees and possible (likely loss of principal). That said, if a person decides to not select the lifetime income option, they face a very serious risk. In addition, if that individual should die during the payout period, little or nothing may be left of the cash values as the payouts on the income side are withdrawals from the policy value. With a fixed index annuity, you are correct that there is no actual investment in the market. However, this investment is designed to protect principal and offer the investor a chance to earn interest that is above prevailing rates. Try comparing the performance of the fixed index annuity with the performance of the S & P over any 10 year period. The annuity retains all gains, where as if the market goes up 10% and then surrenders 15%, you will be a net loser in the market. The return over most time frames would favor the annuity. The fixed index annuity offers protection of principle and income riders. For many people in their 60's and above who have life savings of $1,000,000 or less, the thought of any risk may not sit real well...
Posted by: Dylan at 09/03/2010 08:10:21 PM
Very misleading article. I own three eia's over past 5 years. Haven't lost a dime and am averaging 6-8 %. The ignorance in the article is not explaining that different time horizons, risk tolerance, and age are a big factor in suitability. Not explaining different crediting methods available, and to recommend a variable annuity with benefits without explaining to rider costs m&e expenses, separate account charges and risk is borderline illegal if she is not licensed and noncompliant if she is...FINRA should look into this article.
Posted by: charles at 09/29/2010 11:01:19 PM
Like investments such as mutual funds some index annuities perform better than others. Over the last twelve years, in general they have far outperformed the S&P and the vast majority of mutual funds. There is no comparison. Where is the real danger in investing? Its Wall Street! You seem to easily forget the 40% loss two years ago. To recoup this requires an 80% gain. Go ahead, send your money off to Wall Street. How has that worked out for most americans.
Posted by: robert at 10/01/2010 06:03:31 PM
... Misinformed and only showing a few bad apples. Many Annuities will participate up to 10 or 15% with zero down side. No matter how you run the numbers, loosing less is always better. If you’re looking for an annuity and reading this article, get good advice from a Financial Planner.
Posted by: Anita Mitchell at 10/04/2010 02:01:15 PM
after reading the above comments, as a lay-person, I wouldn't touch any of these products because they are too complex for the average person to understand. insofar as being a "fiduciar"y as one commentator asserted, the big banks had a fiduciary duty to the clients to whom they sold those securitized, AAA-rated "liars loans." Now it's in the courts. Being called a fiduciary does not mean the vendor/sales person/advisor will fulfill that commitment.
Posted by: Bruce Chadwick at 10/05/2010 11:08:26 AM
...the author did not look at any of the products from the top three companies but only a company that is not considered significant. They are not significant for a reason! No studies are quoted just the author's...opinion. There is a study by a Professor Babble of the Wharton school of Finance...that refutes your article big time. You may wish to review his findings...In addition, the worst indexed annuity over the course of the last ten years (or five for that matter) would have made a little money whereas the stock market...well we know how that went....Using FINRA as a disinterested source of information when it comes to indexed annuities or any other insurance product is a joke. They are biased against insurance products.