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Chapter 9. Insurance and Annuities > The Press and Annuities

The Press and Annuities

I told you at the outset that I would tell it like is, and I believe I have been doing so. If you recall early on in the book, I expressed a lack of tolerance for people who exaggerate and make broad blanket statements that just can't be true. They simply want to make a point and be heard so that they make the most extreme and absolute sentence they can. So when I hear someone quoted as saying, “An annuity is never a proper investment for anyone,” I get suspicious. Imagine if I said, “You should never wash your car; it's just a conspiracy by Procter and Gamble to sell soap, and rainwater works even better.”

A variation of this type of hyperbole is being used by critics who don't like annuities, and the popular press is reporting these exaggerations as if they were factual. I struggled with saying anything on this subject, but I read too many articles full of half-truths written by reporters who are not provided a balanced report. Clearly, if there is only one side to an issue, reporting one side is appropriate, but in this case, the reporting has not been balanced or fair. Annuities are not for everyone, and people must review their goals and ensure that the annuity is a proper match for their situation. With tax law changes that have lowered the maximum capital gains rate to 15 percent, the deferred annuity must be held for a longer period of time to merit consideration. However, income insurance tends to get painted with the same brush, which is unfortunate for those people requiring an income they can't outlive.


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