Page 25 - DON'T MAKE ME SAY I TOLD YOU SO - ANNUITY CHAPTER ONLY

Section 8

Fees and Expenses

To provide the protection we’ve just discussed – living benefits

and death benefits – variable annuities have fees that, in most
cases, will make them more expensive to own than stocks, bonds,

or stock mutual funds.

When you invest in a variable annuity, you are making a

conscious decision to pay a premium for your investment to shift
the risk of a market decline to the company issuing the contract.

You must consider all of the fees and expenses for your contract
and know how they will affect your investment returns over time.

The expenses for a specific variable annuity are spelled out in the
product’s prospectus.

Let’s look at some of the costs for a typical variable annuity:

Mortality and expense risk fee – This covers several features,
including the insurer’s agreement to:

► Pay the owner an income, which may be for the rest of the
owner’s life

► Pay a “death benefit” to the annuity-owner’s beneficiaries if

he or she should pass away before starting the payout phase.

Chapter 4: Annuities

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