"You might be surprised to discover that much of what you hear about annuity products are either misleading or not true at all." Steve KerbyAnnuities are risk transfer products that have been around for hundreds of years. These contracts have a proven record of success, protecting your principal while delivering streams of lifetime income. Yet, many financial advisors, agents, and television personalities continue to discourage their audiences from taking a closer look at annuities.Here are some common misconceptions about annuities:If I own an IRA or 401(k), I won't benefit from an annuity. This myth implies that because qualified plans such as IRAs are tax-deferred, purchasing a tax-advantaged annuity is of no additional benefit. However, an annuity comes with other features that qualified plans may lack. For instance, with an annuity, you may be able to lock in a death benefit or create a lifetime stream of income.If I die, all the money in my annuity goes back to the insurance company.Far from being a one-size-fits-all product, annuities are available in several varieties. For instance, you can usually take out money whenever you want with deferred annuities. However, be aware that you may need to pay surrender fees, ordinary income tax, and a 10 percent tax penalty if you take funds out before you turn 59 1/2. Some annuities also let you name beneficiaries who will receive any remaining assets when you die.Annuities are expensive with high fees.I've heard this misleading statement from agents and brokers trying to sell mutual funds and stocks to older clients. That's ironic because every company that sells mutual funds charges annual fees of anywhere from 0.5% to 2.5%, along with other expenses. Some funds even tack on a sales charge over and above those fees!Only certain kinds of variable annuities charge fees. Fixed annuities have no maintenance or annual fees unless you customize them with optional riders. You must understand what you are gaining in exchange for what you are giving up, no matter what financial product you choose.I have no liquidity with an annuity.Annuities are designed for the long term, as are mutual funds, bonds, and other products. However, being long-term doesn't necessarily mean that your money is all tied up — or even that you'll get hit with surrender charges. Many annuities offer a free annual withdrawal amount, typically 10% of your contract's value. In most cases, that amount is free from surrender charges. You'll want to know your contract's specific details before withdrawing funds. Other situations may also help you access your money. For example, withdrawals may be surrendered charge-free if you need nursing home care, are diagnosed with a terminal illness such as cancer, or must satisfy the IRS' required minimum distributions (RMDs).Bottom line: Don't let annuity myths keep you from taking a closer look. If your advisor or agent discourages you from purchasing an annuity, they may have another agenda. Be sure to ask them relevant questions to ensure you are getting the most accurate, objective information.