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Annuity Investors Must Guard Against Switching Products

BE ADVISED: Beware of being churned from one annuity to another. These "1035 exchanges" may serve only your insurance agent's or broker's interest and not your own. That's because of the hefty 6% to 7% upfront commissions that they receive.

If a switch is recommended, ask these questions:

Why is the exchange being made?

Who's pitching the switch?

Are there any surrender charges that I must pay?

Is my surrender period about to end?

What's the track record of the proposed annuity versus the one I own now?

Are there any special deals enticing me to switch, which usually are a bad sign?

See Article, "SEC Cautions Against Purchasing Variable Annuities"

Source: Wall Street Journal

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