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What are the pros and cons of purchasing the annuity

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Question: Obtain from a licensed salesperson or stockbroker a prospectus and any other literature available on a popular deferred annuity. Analyze the terms, and answer the following questions.

a. What is the current interest rate? How does it compare to T-bill rates? To AAA bond yields?

b. What is the minimum guaranteed interest rate on contributions? How does it compare to T-bill rates? To AAA bond yields?

c. What, if any, tax benefit does it offer the investor?

d. What payout options does it offer? Is it a fixed or variable annuity? Which payout option do you find most appealing?

e. What sales charges and administrative fees are levied on this annuity? How does it compare to other annuities?

f. What is the rating of the financial strength of the insurer given in Best's Insurance Reports?

g. What are the pros and cons of purchasing this annuity?

Reference no: EM131627454

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