Annuity Contract (Kiplinger - Personal Finance Advice)

Kiplinger - Timely - Trusted - Personal Financial Advice

I've found Kiplinger to be the largest collection of financial clueless clowns on the Internet.

THIS article titled The Great Annuity Rip-Off written by Kimberly Lankford is a prime example of just how utterly ignorant Kiplinger is on the topic of annuities in general and FIXED annuities in particular.

What's worse is the fact they allow absolutely false, misleading and inaccurate information to remain on their site.

Let's have some fun with Ms. Lankford by pitting her words against actual fixed annuity contract provisions.

We need to go no further than her opening remarks.

Kimberly Lankford wrote:

Seven years ago, when Alice Bouchard was 85 and needed her money to be easily accessible, an insurance agent sold her a deferred annuity that tied up her money until she was 101. If she had needed to withdraw the money during the first five years after buying the annuity, she would have paid a massive 25% surrender charge.

Now I don't doubt the un-named annuity product had an "ANNUITY DATE" set for 16 years in the future and IF the un-named annuity product did in fact have a 25% surrender charge during the first 5 contract years it would have been because it paid an UP-FRONT interest bonus in the neighborhood of 10% perhaps for ALL new premium going into the contract during the first 5 years. We will never know since she doesn't say which insurance company product she's referencing,

Attorneys, News Media, Stock Brokers and Bankers simply cannot seem to comprehend the plain English meaning of Annuity Contract terminology.

Seniors over age 70 who buy the vast majority of annuities nationwide have no problem understanding:

The Annuity Date printed on the Contract Data page or the Surrender Charge schedule CLEARLY written in BOLD print on the Contract Data page or the plain English terms of the 10% FREE Withdrawal provision. Please click on the links to see these as they actually appear in most ALL fixed annuity contracts.

On the Contract Data page of a case I just wrote it shows the Annuitant's age 79 and an Annuity Date of 05/16/2034. She will be 105 years old on the Annuity Date.

But what does the Annuity Date mean and can it be changed?

The Annuity Date is the maximum date in the future the Annuitant can hold the contract in tax deferral. On the Annuity Date one MUST elect a settlement OPTION. The Owner/Annuitant can CHANGE the Annuity Date to ANY date after the first contract year.

So when this clueless clown Kimberly Lankford writes:

"...an insurance agent sold her a deferred annuity that tied up her money until she was 101."

She's referring to the Annuity Date printed on the Contract Data page without an elementary understanding of what that term means in the contract and she either conveniently doesn't inform her reader's the Annuity Date can be changed or simply doesn't know the subject matter on which she's writing about.

Moving on to her next half truth, by the way, a half truth is a lie, also known as, a material misrepresentation:

If she had needed to withdraw the money during the first five years after buying the annuity, she would have paid a massive 25% surrender charge.

Hmmmm, this gives the reader the impression that ANY money withdrawn during the first 5 years would incur "a massive 25% surrender charge."

Really? What about the 10% FREE Withdrawal provision. Did you forget about that Kimberly or do you just not know or are you purposely misrepresenting yourself again?

A person would have to go out of their way and do extraordinary research to find ANY annuity product sold by any Insurance Company that DOES NOT have a 10% FREE Withdrawal provision.

Please review the actual fixed annuity contract provisions below.

Please read Ms. Kimberly Lankford's article in its entirety.

Then please post your questions about any of her absurd blanket condemnations regarding an entire insurance product line of which over $200 billion dollars are invested in each and every year and I will be happy to respond.

The Contract Data page:



The Annuity Date clause:



The 10% Free Withdraw provision: