In recent weeks, two friends have urged her to consider equity-indexed annuities (EIAs for short). "I don't know anything about these annuities, but I've certainly been pleased with the traditional annuities I've purchased," Nadine writes. Her friends have described the EIAs as practically risk-free, but Nadine knows from experience that no investment is without risk.
The financial picture
Nadine's current monthly income, from investments and a pension, is approximately $5,800. Her assets total roughly $1.8 million and include her paid-for $640,000 home, three annuities totaling $340,000, mutual funds, Treasury bills and savings. She recently received $70,000 from the sale of heirloom jewelry and wishes to invest, or "park" the money.
Plan of action
EIAs, issued by insurance companies, have been hailed by salespeople as one of the best investment-vehicle developments to emerge in recent years.
Equity Indexed Annuities
