[rufusnims]

I am in mid-70s with a couple of variable annuities. I have run into a seminar which pushes equity indexed annuities, as ones which would not decline when the market tanks. What are the negatives about equity indexed annuities?

[ebaines]

I would think that an equity-indexed annuity would be tied to an equity index - no? So depending on what the index is - S&P 500 for example - wouldn't it's value fluctuate with that index? If this particular versoin has some sort of "guarrantee" to not lose value - that simply means that you'll make less in an up market (to make up for not losing in a down market).

I am strongly opiniated that variable annuities are a really bad idea for 99.99% of the public. They are loaded with fees, tend to have too many restrictions, are awful from the point of view of estate planning (your heirs will be disappointed in terms of what they actually get), and the insurance component is generally over-priced. You're much better off investing in a traditional annuity - the kind that pays you a certain amount every month until you die. They're not sexy as variable annuities, and the salesman doesn't get as big a commission, so they tend to not be flogged by salesman as much.