July 10, 2008
FACT is an interesting idea however, I have some concerns. Fixed rate annuities sound nice on the surface however, companies will simply adjust the rate according to the associated risk.
People are in business to make money, not provide a charity. By putting this extra risk associate to the market taking a down turn, they will offer lower rates.
Perhaps having a brochure or some type of reading materials for customers would be better. It could bullet point the different types of annuity upsides and downsides so the consumer can make an informed decision. The agent could read along with the consumer to make sure they have read it. This could help resolve the problems with current annuities.