Equity-Indexed Annuities: Toxic Investments

Equity-indexed annuities ("EIAs") are contracts with insurance companies that pay investors part of the capital appreciation in a stock index and guarantee a minimum return if the contract is held to maturity. The net result of EIAs' complex formulas and hidden costs is that they survive as the most confiscatory investments sold to retail investors. For an example of misleading EIA descriptions, see the attached Legg Mason page printed off their website today.


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