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Oct 07, 2009 -- Variable annuities still stink

Variable annuities still stink, as Clark explained to a caller during this segment. They're a four-letter word here on the show, and they're really nothing more than a contract with the insurance company that masquerades as an investment with insurance wrapped around it.

Here are some of the consumer champ's main takeaways for you:

• Variable annuities come with huge sales commissions, huge expenses and create a huge tax burden for you.

• Variable annuities are designed to be spent only when you're 59 1/2 or older. If you want your money earlier, you'll pay a 10 percent penalty.

• You must pay a massive fee known as an early surrender charge if you want out of a variable annuity before you've owned it for 10 years.

Unfortunately, Clark won't be able to answer any questions submitted via commenting. If you have a question, please try posting it to our message boards.

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What others are saying

  • variable annuity
    We are recently in a V.A., advised by our investment person. We are both over 65, and there is no 10yr penalty. We have seen the $25000 we invested grow to over 30000 in less than 6mos.
  • Variable Annuities- Hartford?
    Is the Hartford an exceptionfor variable annuities? The financial adviser is trying to explain that it is an excellent way for me to have assurance that I will have guarantee for life...I an 72 1/2 and when my husband passed away I was overwhelmed. He took care of everything and we didn't have any varible annuties...? I am doing the best I can, but I am concerned. I haven't signed up yet and I just remember your shouting NO NO NO!
  • Flexible Premium Gold Plus Deluxe Super Annuity
    Hard to say, Mark. "Ripped off" sounds harsh and I had to disparage insurance salespersons. I will put it this way. Next time you bend over to tie your shoes make sure your back end is in a secure and isolated corner.
  • Deferred Annuity
    I have a Flexible premium deferred annuity bonus 10 any comments on if they stink also?I never see it grow like my 401k.I feel I am being ripped off.Thanks,
    Mark
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