Variable annuities were star products when the stock market surged in the late 1980s through the 1990s. Among their benefits were lifetime payouts and guaranteed death benefits. The robust stock market blunted the impact of the many fees associated with the products.

In the 1990s, as the stock market recovered from a post-bubble recession, brokers started marketing to less-affluent clients. The pitch – which was, and continues to be, true – is that money held long-term produces higher returns than short-term instruments.

However, there’s a critical catch. While the pitch was that long-term financial instruments would create affluence, long-term financial instruments did and continue to do much better at sustaining and increasing affluence that was already there.

Aggressive sales of variable annuities first backfired during the dot-com bust, and it wasn’t just for the buyers – it was for the companies selling them. Among the casualties was high-flying Worcester-based Allmerica Financial, a public company conversion of the former State Mutual Insurance Co. Under the leadership of former Fidelity wunderkind John F. O’Brien, the company burgeoned by selling stock market-related products, among them variable annuities and variable life insurance products, which boosted fees from $87 million in 1995 to $291 million in 1999.

But the dot-com bust blasted the bottom out of the pot of gold at the end of the rainbow. O’Brien resigned in 2002 and the company would later be reincarnated as The Hanover Insurance Group, which focuses on property and casualty products.

So now comes insurance and financial services provider Jackson National Life Insurance Co., an indirect subsidiary of UK-based Prudential PLC, which had $781.1 billion in assets under management as of midyear. In September, the company announced it would suspend payments on certain classes of variable annuities from Sept. 15 to Jan. 12, 2014, in a five-tiered price schedule weighting the advantage of higher withdrawals against lower cost for letting the money stay put. The announcement mitigated flows into contracts without an outright ban. That’s a moderated approach that’s better than the all-or-nothing bull-market practices of two decades ago. Marketing strategies of other companies in the variable annuities space indicate that they’re taking a much more nuanced approach to ensure that consumers’ financial goals align with what the product can do for them.

The bull market sales marketing of yore, which pushed long-term investment products to less affluent and less economically stable customers, has given rise to an aftermarket of companies that buy structured settlements and other annuity products direct from consumers in return for a lump sum cash payment – less than the customer would have gotten over time. But there is a darker truth – that not everyone who bought an annuity or structured settlement has a solid enough financial base to let that money stay put for a long-term payout.

Just as reputable companies that sell variable retirement products take a due diligence approach to long-term risks, the customers who buy from them should have a more realistic picture of their economic risk exposure.