Annuity Myths Debunked

Annuities can be a powerful tool for retirement planning, but they’re often misunderstood. Myths and misconceptions can lead people to overlook the benefits that annuities offer. Let’s take a closer look at some common annuity myths and uncover the truth.

Myth 1: Annuities Are Too Expensive

One of the most common misconceptions is that annuities come with high costs. While some types of annuities, such as variable annuities, may have higher fees, other options like Fixed Indexed Annuities (FIAs) and Multi-Year Guaranteed Annuities (MYGAs) often come with little to no ongoing fees. These products are designed to grow your savings without eroding your balance with high charges.

Myth 2: Your Money Is Locked Up Forever

Many people worry that buying an annuity means losing access to their money. The truth is most annuities offer some flexibility through free withdrawal provisions. For example, Oceanview’s annuities allow for penalty-free withdrawals, after the first year, up to a certain percentage annually. Annuities can also include features like nursing home and terminal illness waivers to provide additional access to funds without incurring a surrender charge during times of need.

Myth 3: Annuities Are Only for Older Retirees

While annuities can provide guaranteed income for retirees, they are also an excellent choice for those still in the accumulation phase. MYGAs and FIAs offer growth potential and tax-deferred savings and can help create a well-rounded retirement portfolio, even if you’re years away from retirement.

Myth 4: Annuities Don’t Offer Growth Potential

Some believe that annuities are too conservative and don’t offer growth opportunities. In reality, FIAs allow you to earn interest based on the performance of a market index, providing some growth potential without the risk of losing your initial premium. Additionally, MYGAs offer competitive, guaranteed rates for those seeking steady returns.

Myth 5: Annuities Are Too Complicated

While it’s true that some annuity products have complex features, others, like MYGAs and FIAs, are more straightforward and easier to understand. By working with a financial professional, you can choose the type of annuity that aligns with your goals and comfort level.

Understanding the Value of Annuities

Annuities provide a unique combination of benefits, including principal protection, tax-deferred growth, and the potential for guaranteed income in retirement. Dispelling these myths can help you see how annuities might fit into your financial plan.

Discover the Oceanview Difference

• Financial Strength You Can Trust: Rated “A” (Excellent) by A.M. Best, showcasing our solid financial foundation, providing you with confidence regarding Oceanview’s commitment to meeting obligations.
• Simple, Transparent Retirement Solutions: Straightforward annuity products designed to help you meet your retirement objectives.
• Competitive Rates and Flexibility: Benefit from competitive rates and a variety of durations and crediting strategies.
• Client-Centric Approach: Features such as free withdrawals, nursing home and terminal illness waivers, and full liquidity for beneficiaries upon the annuitant’s death demonstrate our commitment to your financial security and peace of mind.

Disclaimers

Guarantees are based on the financial strength of the issuing carrier. The multi-year guarantee annuity product with form number IIC19 OLA SPDA, or variations of such, are issued by Oceanview Life and Annuity Company (d/b/a Oceanview Life and Annuity Insurance Company in California; NAIC# 68446). May not be available in all states. Not available in the state of New York or Vermont. Policy form numbers and provisions may vary. Rates are guaranteed depending on the guarantee period selected at policy issue.

Oceanview’s Single Premium Fixed Indexed Annuity Contract [ICC19 OLA FIA], product riders and state variations. Product features, limitations and availability may vary. Products not available in all states.

Annuities are generally designed as long-term retirement solutions and have certain limitations. They are generally not intended to replace emergency funds, serve as income for day-to-day expenses, or support short-term savings goals.  Please review the contract for full details.  

HARBOURVIEW ANNUITIES ARE PRODUCTS OF THE INSURANCE INDUSTRY AND NOT GUARANTEED BY ANY BANK NOR INSURED BY THE FDIC OR NCUA/NCUSIF OR ANY OTHER FEDERAL GOVERNMENTAL AGENCY. MAY LOSE VALUE. NO BANK/CREDIT UNION GUARANTEE. NOT A DEPOSIT. MAY ONLY BE OFFERED BY A LICENSED INSURANCE AGENT. GUARANTEES ARE SUBJECT TO THE CLAIM PAYING ABILITY OF THE ISSUING INSURANCE COMPANY.

Annuities issued by Oceanview Life and Annuity Company, 1819 Wazee Street, 2nd Floor, Denver, CO 80202. In California, doing business as Oceanview Life and Annuity Insurance Company www.oceanviewlife.com.

This material is a general description intended for general public, educational use. Oceanview Life and Annuity Company is not providing investment advice for any individual or in any individual situation, and therefore nothing in this correspondence should be read as such.

Withdrawals in excess of any Free Partial Withdrawal amounts are subject to a Surrender Charge and Market Value Adjustment (MVA). The MVA may have the effect of increasing or decreasing the Surrender Value of the withdrawal depending on the market interest rate changes.

The IRS may impose a penalty for withdrawals prior to age 59 ½.

Contracts purchased in an IRA or other tax-qualified plan provide no additional tax-deferral benefit, since they are already afforded tax-deferred status. All annuity features, risks, limitations, and costs should be considered prior to purchasing an annuity within a tax-qualified retirement plan. For non-qualified annuities, tax deferral is not available to corporations and certain other entities.

While care was taken in preparing this information and it is considered reliable, contract, application, illustration, and product disclosure language should be relied upon when contrary. The Company reserves the right to correct any typographical errors that may exist.

Funds allocated to an index do not directly participate or invest in the stock market or any index.

Rates, renewal caps, and declared interest rates, will always follow contract provisions relative to minimums and maximums stated.  Oceanview determines, at its discretion, the rates, renewal caps and, declared interest rates above the contractual minimums that are guaranteed.