Downside of A Variable Annuity?

mikey makes good points..they are also very illiquid, meaning if you try and sell the product you get smacked around pretty good.

In my view I would rather see what term insurance you could find and if  your father liked the product mix of the annuity investment wise, try to find a fund that has a similar makeup.

There is a secret in the investment market that ANNUITIES are a BIG payday for a broker..big time payout, so I wonder why that is??

Make sure the agent isn't selling him an equity indexed they are a scam however VA's are getting better every day. Take a look at ING life pay plus if he wants a VA.  It guarantees the income base will step up by 7% or the better of the highest quarterly account value each year.  The base can be used for lifetime income withdrawn at 6-7% depending on age without ever having to annuitize.  All the while locking in higher market gains, it's tax deferred until you take withdrawals.  He puts in a 100k and market drops 50% in ten years; the death benefit is 200k and his income base is 200k, in a worst case scenario in this market what is wrong with that. If someone is older and wants equity exposure why wouldn't they use a VA?  They lock in gains and guarantee you income while a stocks, uit, mf's are completely dependent upon the markets returns.  You either want income now, income later, or to leave a legacy ,and VA with the death benefits provide all those options; with many cheaper than a C share mutual fund.

I work in the bank channel for fixed annuities and everything that has been said regarding fixed annuities is true, however most companies like the one I work for have a guarantee return of premium no matter when you surrender the contract.  And most companies offer 10-15% per year liquidity for withdrawals.  Not all the liquidity that most would like  but it does offer some liquidity.  The last thing I will say is, the company I work has a product that BofA offers at 5% for $100k + and Chase offers a product at 4.75% for $100k+.    Not saying that a fixed is the way to go, just thought I would give you more input on it.

If it were ME and I were giving advice, if you wanted a var or fixed annuity, WAIT for rates to go up.

The higher the rates go in general, usually the higher the annuity since it has to compete with other instruments in the marketplace.

But that said, no way could I recco someone buying one period.

My dad is being hounded by an insurance salesman

That says it all now, doesn't it?