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Figure 27: Morningstar Variable Annuity Fee Report
What are these fees and what do you get for them? First are
the “base contract charges.” These are the fees charged by the
insurance company for putting the contract together and
providing it. Not for managing your money or anything else,
just putting it together and administering the paperwork.
Looking closely at the above statement, you can see this
superfluous activity costs you 2%. In other words, if you had a
VA for, say, $250,000 and held if for 10 years, the insurance
company would charge you $50,000 in fees! For what? What
do they provide that’s worth 20% of what you put in?
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