Does Anniuty Fraud Exist?

The desire to avoid fraud conflicts with our desire to find the best deal for our money. While these are not mutually exclusive, knowing which deal is good and which is fraud can be difficult. Especially with something as complicated as an annuity. You can learn to find a good deal.

America is the land for opportunity. For making money. By any means necessary. So that means that anything that is complicated and/or mind numbingly boring is attractive to con artists. And annuities not only fall into that category, they crash through the floor. I have a Masters in mathematics and reading about an annuity can make my head hurt, my eyes cross, then I wake up ten minutes later. Should you, then, stay away from every annuity? No, but you should be careful.

Most annuity fraud does not fall into the category of bad roof repair. Yes, there are a few people out there taking money for annuities that don't exist. But this does not happen that often. Since an annuity can only be bought from an insurance company, they are highly regulated.

There are some people that consider all annuities fraud because they may not be a great deal. So extremes aside, the majority of annuity fraud comes in the variety of getting you to buy a product that would not be the best for you. This does not mean that the annuity will not pay; it just means that another investment would pay more.

The first, and most common, trick is to get you to switch investments. Either switching from one annuity to another annuity or to buy an annuity instead of putting money into an IRA or other account. This one is tough, really tough. Most of the time you do not actually lose money, you fail to make more money. The best advice is that if a salesman, any salesman, comes to you instead of you going to them, turn it down. Other than that, think about it for a week, then decide based on the bottom line. If both decisions make you money, you can't really lose.

The other major for of fraud is to get you to buy an annuity when you should have gone with a different investment. Maybe you did not max out your IRA contribution first. Or something else like that. Again, it is a matter of what would have made you the most money. This is tough. Stocks can perform better or they can lose all value. You never know ahead of time which investment will make the most money. If your choice satisfies you, stick with it. Do not let someone else steal your joy from your hard work.

Listening closely to the critics of annuities and you will find that most fraud involving an annuity is an argument over which method makes the most money. Yes, you can get burned by fraud. But as long as you buy from a company with a good rating you should do okay