Watch Out for These Red Flags When Buying an Annuity

Annuities are complicated, so you must ensure you thoroughly understand what you’re entering into.

There are red flags to watch for so you don't purchase a bad annuity. Photon photo/Shutterstock

Concerns about the economy have driven sales for annuities. According life insurance marketing and trade association LIMRA, annuity sales topped $105 billion in the first quarter of 2025.

But not every annuity is good. The agent or broker may not always represent the annuity properly. They could have another agenda other than your best interest. Here are some red flags to watch for so you don’t purchase a bad annuity.

Agent Tries to Switch Your Annuity

In the annuity business, there are the terms “churning” or “twisting.” This is when an agent or broker tries to convince you to switch your annuity for another after you purchase the original one.