Annuities - 5 Things You Should Know

I read an AARP Bulletin article by Ellen Stark about annuities and thought I’d share the information.

The very brief overview of the 5 points she mentioned in her article were:

  1. Annuities can be simple and/or they can be complicated, depending on what type you choose. Some fixed annuities such as MYGA’s (Multi-Year Guaranteed Annuities) are relatively basic. But all annuities aren’t basic and some can be actually quite complex. Annuites come in many varieties: variable, fixed, equity indexed and more. Some annuities can help defer taxes; while others allow people to invest in stocks and bonds while protecting against steep losses.

  2. Annuities require a long term commitment.
    Annuities can have high penalties (called Surrender Charges) if you decide to get out of an annuity earlier than the matured term set in your original annuity agreement. (In a way, similar to a penalty would you pay to break a CD at a bank to get out of a CD early, but generally with an annuity it will be an even higher penalty.)

  3. You need to know specifically what you want.
    You need to decide what type of annuity accommodates your needs before purchasing one.

  4. Safety can come at a cost, depending on what type of annuity and/or rider you purchase.

  5. Which agent or agency you use, matters! You can save yourself money by using an independent agent, since independent agents can shop multiple insurance companies for you at one time. You can also shop online, but won’t have the benefit of personalized service of a local independent agent that explains things and also should be able to get you the same rates as online. It is also very important to choose an insurance company with a high rating grade such as at least an A- (by one of the rating firms such as A.M. Best.) 

To read the entire article, click on the web link below:

Source: AARP Bulletin January/February 2019

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Note: Annuities can be confusing to many people. As an "independent licensed agent" I try to explain things to you in simple terms so you feel comfortable making a decision. Then I can help you choose an annuity that you feel best fits your needs from a large choice of different insurance companies. Plus if you choose to work with me you will have personalized service by a local independent agent that can shop rates for you, rather than working with a captive agent working for just one insurance company. If you would like my assistance to discuss and/or start the process of getting an annuity please call me at 941-404-5334.