What Are The Disadvantages Of Annuities? 
Annuities can have disadvantages based on the product profile and the client suitability . Annuities are generally purchased for future income . During the accumulation period , liquidity could be a concern based on limited withdrawals , surrender charges and could incur a penalty before age 59 . Long term guaranteed fixed interest rates , especially in a low interest rate environment , could be detrimental in a rising interest rate market where annuities could be difficult to move because of the liquidity items already mentioned . Some annuities are tied to domestic and foreign indices , with a possibility of non crediting years because of poor indices performance . Some annuities use separate sub accounts which use market equities and bond investment vehicles that have exposure to volatility , i.e. you could lose all your money in the cash value account . 