Response: Knowing when or if you should exchange one annuity for another is an extremely important topic to understand if you own annuity contracts. Let's face it, products change over time and bigger and better things come along, however the old adage "if it ain't broke don't fix it" also applies here as well. The underlying theme here when you are faced with this decision is economic benefit, and I'm not talking about the commission being generated to the advisor to helping you with this transaction. There MUST be a clear economic advantage to the investor to even consider making an exchange of one annuity for another.
In the next couple of videos I'm going to dissect what those major economic factors look like and how you should be evaluating them, but it's safe to start by suggesting you ask the advisor who is proposing this change to you two basic questions:
1. How many companies do you represent? You certainly don't want to exchange your annuity to one that isn't the best available and if your advisor has a limited product catalogue then you are going to end up purchasing an annuity.... quite possibly not the best annuity.
2. Ask the question... What is the economic benefit to me to make this exchange? and would you be so kind as to put those items in writing for me? The Annuity Report Card that I prepare at my firm truly takes the trust factor out of the equation and allows the client to make decisions based on written facts vs. verbal promises or slick sales pitches. There must be an economic benefit to you to consider moving your money and why wouldn't you want that in black and white?
Thanks so much for the question Rolando, stay tuned for some more details on this important topic.
Carl Barnowski has 25 yrs. of experience as a retirement income expert specializing in principal protected annuities.