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I was talking to someone recently who told me they bought an annuity through their bank. Is there any advantage to buying one through a bank over buying one directly from an insurance company?

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  • There is a huge advantage – for the guy in the bank that sells it to you. Annuities are famous for giving huge bonuses for the sellers.
    – Aganju
    Commented Mar 21, 2022 at 21:48

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No there is no advantage. Here the bank is often just acting like an agent, that is they collect a fee for selling someone an insurance product.

Many times these are the worst deals although it is difficult to generalize. Did the purchaser do some comparison shopping on their own?

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If I were to ask you, "Is there any advantage to buying an XYZ TV from Amazon or from WalMart", you'd most likely say "No, only the best price matters".

It's the same with annuities except that they are far more complex products that offer a variety of features, many of which overlap with others but usually some that are different. This lack of standardization often makes it hard to comparison shop. But in the end, that's the best that you can do - shop around and determine what appears to be best suited for your needs.

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