Top 3 Warning Signs When Buying an Annuity

By Kindur | May 29, 2019

Multiple studies show that Americans’ number one retirement fear is running out of money. In fact, some studies show that almost 60% fear running out of money more than death.

Yet many Americans are unwilling to consider annuities, which could provide lifetime income and alleviate the fear of outliving retirement savings. Annuities are useful financial tools that have been around for decades, but annuities can be confusing and the annuity industry is full of abuses targeting retirees.


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3 Red Flags to Avoid When Buying an Annuity

When it comes to annuities, many Americans understandably have negative views. Generally, there are three practices that frequently raise concerns for consumers:

1. Unfair Sales Practices

There are many examples of state and federal regulators that have taken action against insurance companies, broker-dealers and insurance agents for what the regulators view as unfair sales practices. Some common complaints involve allegations that consumers are being pushed into products that are either not right for them or that they do not need.

2. Failing to Put the Customer First

Insurance agents are paid commissions by the insurance company and earn more money if they can sell more products, sometimes with additional costly contract features. This means that the agent may not always be putting the customer’s interest first.

3. Complicated or Unfair Terms

Some view elements of the annuity contract itself as inherently unfair. One common concern is what happens if you die early. In many cases, the annuity contract may allow the insurance company to pocket the amount you paid to buy the annuity without paying out anything to your beneficiaries. If you do want to pass on the value of your annuity, the insurance company may let you, but could charge you extra.

Concerned About Existing Annuities? New Ones Are Being Built.

Companies like Kindur, have built a new annuity product with a structure that attempts to avoid the historical problematic practices that plague the industry. With the partnership of a leading insurance company, a new kind of fixed annuity was specifically created for those approaching retirement.  

Modernization of the Annuity

1. Eliminating Agents & Upfront Commissions

Annuities can now be purchased online. This means you can purchase from the comfort of your home when you are ready.  No insurance agent, no uncomfortable conversations, and no pushy sales pitches.

In many cases, it is not clear how much an agent will receive for selling you an annuity or if they are better compensated for selling you additional features. Elimination of the upfront commission allows transparent pricing that is prominently disclosed to the customer.

2. Fiduciary You Can Trust

Purchasing an annuity from a company registered as a fiduciary ensures that the company will act only in your best interests.

4. Standard Features for Retirees

Creating a simple annuity product that’s easy to understand, can help meet the needs of modern retirees. By making features such as guaranteed lifetime income and the ability to pass on the contract value to your beneficiaries standard, these annuities cut down complexity.

While annuities are not right for every person or every situation, when used as part of a holistic retirement plan and a balanced portfolio, they can be a helpful tool for getting through retirement without running out of money.

Take the first step to securing your retirement. Check out this annuity calculator to see how much guaranteed income you can generate from a fixed annuity.


This information is intended to be educational and is not tailored to meet specific investment or insurance needs. Before purchasing an annuity, carefully review its investment objectives, terms, risks, charges, and expenses.

Kindur does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Kindur cannot guarantee that the information herein is accurate, complete, or timely. Kindur makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. You should consult an attorney or tax professional regarding your specific situation.

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Kindur Investment Services LLC (“Kindur Investment”) is an SEC registered investment advisor. Investment advisory services are provided by Kindur Investment Services LLC (“Kindur Investment”) through its online platform and are available only to residents of the United States over 18 years old. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Past performance is no guarantee of future results. Any historical returns, expected returns or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings are for illustrative purposes only and are not investment recommendations. The content on this website is for informational purposes only and does not constitute a complete description of Kindur’s investment advisory services. Certain investments are not suitable for all investors and are not available to all Kindur Clients.

Before opening an investment advisory account (including for use of the Retirement Planning tool), you should review Kindur Investment’s Form ADV Part 2, which includes a description of certain risks, conflicts and fees associated with participating in the Kindur platform. Any references on this website to “guaranteed income” relate solely to the fixed annuity product offered by an affiliate of Kindur Investment and not to any investment advisory services provided by Kindur. Apex Clearing Corporation, a third-party SEC registered broker-dealer and member FINRA/SIPC, provides custody and clearing services for Kindur and serves as the custodian for advisory assets of Kindur clients.

Fixed annuity contracts are offered by Kindur Insurance Services LLC and are issued by American Equity Investment Life Insurance Company, an unaffiliated insurance company. “Guaranteed income” refers to income paid by a fixed annuity contract that may be sold to a client as a component of Kindur’s retirement platform. Guarantees do not apply to the safety of the contributions to a fixed annuity contract and are based on the claims-paying ability of the issuing insurance company. Detailed information about the fixed annuity can be found in the fixed annuity contract itself and other materials that may be delivered in connection with any application for or purchase of a contract. Early surrender charges also apply to the fixed annuity. Kindur and its affiliates do not provide tax or legal advice.

Fixed annuity contracts are not FDIC Insured and are not Bank Guaranteed. Taxable distributions (and certain deemed distributions) are subject to ordinary income tax, and if made prior to age 59 1/2 also may be subject to a 10% federal income tax penalty. Early surrender charges also apply to the fixed annuity.

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