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Hello, I'm not sure if this is the proper board for this question, but here goes...

A lady I know was telling me about their insurance agent coming to the house trying to sell them what he called an annuity. He told them that they could take out this annuity in the amount of $45,000 and use $20,000 to pay down their debt, put $25,000 into the bank and be able to deduct the interest on their taxes.
Supposedly they would make 16% interest.

I told her this sounds like a BAD idea as now they would be $45,000 in debt instead of $20,000!

Her husband is actually wanting to do it! It sounds like the insurance salesman and the insurance company will be the ones making the $$$$.

Would like all the info I can get from anyone here so I can give this lady some good arguments against this "investment."

Thanks
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Greetings, CalicoKate, and welcome. You wrote:

<<A lady I know was telling me about their insurance agent coming to the house trying to sell them what he called an annuity. He told them that they could take out this annuity in the amount of $45,000 and use $20,000 to pay down their debt, put $25,000 into the bank and be able to deduct the interest on their taxes.
Supposedly they would make 16% interest.

I told her this sounds like a BAD idea as now they would be $45,000 in debt instead of $20,000!

Her husband is actually wanting to do it! It sounds like the insurance salesman and the insurance company will be the ones making the $$$$.

Would like all the info I can get from anyone here so I can give this lady some good arguments against this "investment.">>


It sounds more like they are being asked to buy a variable universal life product rather than an annuity. Still, the negatives in the two products are similar, so for some items to consider, see our annuities area at http://www.fool.com/retirement/annuities/annuities01.htm?ref=G02C04 .

Regards..Pixy
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Calico -

From the scant info you've provided I don't know how anyone could render an opinion on the idea proposed...

PP
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