It seems to me an annuity transfers the risk from thousands of companies in funds I would otherwise buy to the one annuity company who holds my policy. If the annuity company goes under, I lose. So, in either case, ultimately I am holding the risk. I'd rather diversify my risk across thousands of companies instead of one. Besides, an annuity company reduces its risk only to the extent it reduces the value of the product it sells me. Both its investments and my own DIY investments are tied to the market, so putting an annuity company between me and my money in the market is highly inefficient and increases my risk significantly.
You’re also assuming everyone would invest the way you do. Many people wouldn’t touch the stock market unless it was through an annuity or IUL. They think it’s too risky. This product helps in that scenario.
Excellent presentation!
It seems to me an annuity transfers the risk from thousands of companies in funds I would otherwise buy to the one annuity company who holds my policy. If the annuity company goes under, I lose. So, in either case, ultimately I am holding the risk. I'd rather diversify my risk across thousands of companies instead of one. Besides, an annuity company reduces its risk only to the extent it reduces the value of the product it sells me. Both its investments and my own DIY investments are tied to the market, so putting an annuity company between me and my money in the market is highly inefficient and increases my risk significantly.
Well said ..couldn't agree more
You’re also assuming everyone would invest the way you do. Many people wouldn’t touch the stock market unless it was through an annuity or IUL. They think it’s too risky. This product helps in that scenario.