Before you exchange your annuity, there are several questions you should consider first. As Peter with Richon Planning explains to Erin Kennedy, there are many situations where an exchange or transfer makes sense, and there are many instances when exchanging your annuity is not a good idea. So before you do anything, watch out for these red flags:
- You’re still within surrender charge period
- You are offered a “bonus” or “premium” payment
- You think you might need money from the annuity soon
- You’re not offered added benefits or a guaranteed lifetime rider
- You pay higher charges for new features or features you don’t need
- You’re told the “market value adjustment” negates the surrender charge
It’s important to know that annuities do generate a commission for the advisor. Which is why some unscrupulous advisors push annuity exchanges; the exchange or transfer generates another commission for the advisor. If your advisor is not upfront about how he or she is compensated, that is another red flag. At Richon Planning, we value transparency. And we would be happy to offer a second opinion if you’re being told you should exchange your annuity.
