Quote Originally Posted by don View Post
It's an insurance gamble that you will die before you're paid out more than they've profited from your up front money. Especially popular with high paid sports figures to protect themselves after their career is kaput and they blew most of their dough.
It's an insurance gamble that the insurance company will go bankrupt or that you will die before you're paid out more than they've profited from your up front money.

In other words, beware the counter-party risk. These are not FDIC insured accounts.

The other risk is that annuities are over priced. Most people don't run actuarial tables (especially on themselves) and time-value-money calculations. So they end up paying more than the policy is worth.