Under the right circumstances, annuities offer many benefits to investors.

Unfortunately, many people buy annuities without really understanding their features and drawbacks, therefore not really knowing whether they are the right investment for them.

Is an annuity right for you? Getting the answers to some important questions will help you decide:

Features:

* What are the annuity's guarantees, features and benefits and how would they apply to you?
* Are there any limitations or caveats to these guarantees, features or benefits?
* If the annuity is 'variable', how broad are the annuity's investment options and how does their performance -- net of fees -- compare to similar, non-insurance alternatives?
* If the annuity is 'equity indexed', is the participation rate and/or cap rate an acceptable exchange for any guarantees offered by the insurance company?

Costs and Taxes:

*What are the total annual costs and expenses associated with the annuity including investment management fees, mortality expenses, guaranteed benefits and other riders?
*Are any of these benefits or features available at a lower cost outside of the annuity?
*How does the annuity's tax treatment compare to other, non-insurance alternatives?

Surrender and Liquidity:

* Do you know the length of the contract in years?
* Do you know the year-by-year surrender charges for premature liquidation of the contract?
* Do you know the terms by which you may access all or part of your money penalty-free?

Purpose:

*Is the annuity product being recommended registered with the SEC and state securities regulators?
* What is the purpose or objective of this annuity?
*How does it fit into my overall investment strategy?

Though most financial services providers will answer these questions for you as a matter of course, it is incumbent on you to get complete, unambiguous answers to these questions before investing.

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