Subject: File No. S7-14-08
From: Randy Nuckols, LUTCF

July 9, 2008

Individuals who purchase indexed annuities are exposed to a significant investment risk – i.e., the volatility of the underlying securities index. Insurance companies have successfully utilized this investment feature, which appeals to purchasers not on the usual insurance basis of stability and security, but on the prospect of investment growth. Indexed annuities are attractive to purchasers because they promise to offer market-related gains. Thus, these purchasers obtain indexed annuity contracts for many of the same reasons that individuals purchase mutual funds and variable annuities, and open brokerage accounts (page 5 - Executive Summary).
The above statement has one very big missing link, all areas have a minimum guarantee interest. The client can not lose their initial investment.

Security guidelines can cost investors all of their money when the markets sours.