Common Annuity Myths & Misconceptions

Myth #1: "All Annuities Are the Same"

Annuities come in many forms — fixed, indexed, variable, immediate, deferred — and each has very different features, costs, and purposes. Comparing one to another isn't apples to apples.

Myth #2: "Annuities Have No Liquidity"

Most modern annuities allow free annual withdrawals (often 10%) and many have additional provisions for major life events like nursing care or terminal illness.

Myth #3: "If I Die, the Insurance Company Keeps My Money"

Most annuities allow remaining contract value to pass to your beneficiaries. Death-benefit options are widely available and can be customized.

Myth #4: "Annuities Are Too Expensive"

Fixed and indexed annuities typically have low or no explicit fees. Variable annuities have higher costs — but the fees pay for specific guarantees that other investments don't provide.

Myth #5: "Annuities Are Only for Older People"

While annuities are often most useful at or near retirement, some pre-retirees use them strategically for tax-deferred growth and to lock in future income.