Re: Equity Index Annuities
IIRC, when I read some of the prospectus(s) in depth after an earlier discussion, the catches were:
fee skimmed off the top (always bad).
upside (equity participation part) capped at x% per quarter (or month). x% got you a decent return, but in really good quarters you got screwed. i.e. for a 12% year, with a 4% per quarter cap, if the 12% was 3% each quarter, you were fine. But in reality, most gains are concentrated in a short period of time, so if the 12% was 10%, -1%, 2% 1% for the 4 quarters, you got 4%, -1%, 2%, 1%. or 6%. Yuck!
The catches could change, but just a couple of things to look for in the fine print. I'm sure there were more.....