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Subject:  Re: Equity Indexed Annuities Date:  7/28/2005  12:43 PM
Author:  jrr7 Number:  47062 of 78166

Equity Indexed Annuities are an extremely expensive way for someone to get some of the gains of the stock market and keep most of the risks.

The salesman crows "Your balance at the end of the year is guaranteed to be at least 3% higher than it was at the beginning of the year!" Yes, but he's conveniently neglecting to mention that inflation means that your purchasing power will not go up 3%.

Typically with these products your monthly and annual upside is severely limited, and your downside is not (subject to the guarantee). Suppose you start out with a $10,000