A case against contractual retirement annuities
Apr 03, 2021
4 minutes
MARTIN HESSE
NEXT WEEK: EXAMINING THE COSTS
INSURANCE contracts are necessary for the protection of both the insurer and the policyholder. But there is another type of financial contract that is essentially unnecessary: one that forces you to save.
Contractual investment products – endowment policies and contractual retirement annuities (RAs) – force you to contribute an agreed amount over a fixed term, often with a built-in annual escalation, ostensibly to offset inflation.
Worse, their commission structure presents a glaring conflict of interests: the broker receives the bulk of the commission due over the term of the policy in one large, upfront
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