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Pennsylvania Commissioner Urges Understanding of Annuities

Pennsylvania Insurance Commissioner Teresa Miller urges consumers, especially seniors, to take their time to understand annuities in order to protect their retirement income...
September 14, 2016

Pennsylvania Insurance Commissioner Teresa Miller urges consumers, especially seniors, to take their time to understand annuities in order to protect their retirement income. “An annuity is a contract between you and an insurance company, which provides for periodic payments while you are living,” said Miller.

“Annuities are designed as long term investments to provide income over a period of years, and people often buy annuities to help manage their income in retirement,” Miller said. “Annuities should not be purchased to reach short-term financial goals."

In a new consumer guide on annuities, titled “The Do’s and Don’ts of Annuities,” Miller notes that consumers should understand when they purchase an annuity, their money is typically “locked up” for a specified time period, often five to 10 years. If consumers want to withdraw above a specified amount of their money during this time, they will pay a penalty, called a “surrender charge,” for doing so. Miller also urged consumers to avoid being pressured into buying anything on the spot, falling for other high pressure sales tactics, or feeling obligated to buy because they got a free lunch, dinner, or other gift.

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