<<Another flaw in Hawkwin's reasoning is neglecting to account for the time value of money. I dare say that tieing up all but 10%/year of approx. $100,000 for 7 years is a fee. Just not a fee you can easily put a dollar sign on. And withdrawing the money early leads to yet another fee.>>There is no flaw there. TVM was never a part of the discussion. You can chose to call it a fee but the fact remains that it isn't. TVM has no impact on the difference between an annuity or a mutual fund. It is irrelevant to the topic at hand. It is ONLY relevant if the client needs close to or right at 10% withdrawals a year. Even STILL, they could annuitize the contract over five years and get it back at a rate of about 22% a year (just an estimate).Would you consider a 5yr CD to have a fee that a 2yr CD doesn't? Of course not.I agree that annuities are generally oversold; especially by those that get compensated for such. I get the same commission for a VA as I do for most mutual fund sale (less than 50K) plus I get trails on funds where as I get no trails on annuities. Much of the blame, though, is with the client. We can show them the difference in risk and costs until we are blue in the face but there are still a large portion of our populace that remember the Great Depression or are products of it and they are more than willing to pay extra fees to protect their mutual fund investments. As the saying goes, you can lead a horse to water but you can't make him drink.I still think you should talk with the guy and find out why he recommended it. It is entirely possible it was unsuitable, and if such, your grandmother can probably get out of the contract. I have no compassion for those that make unsuitable recommendations as they make it harder on the rest of us.