To choose the best annuity provider, identify companies that sell annuities, review types, fees, and expenses, check annuity valuation and death benefit policy, and compare insurance companies against brokerage firms and mutual funds. Choose the type of annuity that fits your purpose, consider all fees and charges, check AM Best and Fitch Ratings, and check the death benefit policy.
To choose the best annuity provider, you first need to identify the insurance companies, brokerage firms, and mutual funds that sell this type of investment vehicle. Once you have a list of the companies that sell annuities, you can then narrow down the choices by reviewing the types offered, fees and expenses for buying and keeping the annuity, check the valuation of the annuities offered, and find out the death benefit policy the annuity provider allows.
You will probably find that insurance companies offer the most annuity options. While this allows you to choose from the four general types of annuities, insurance companies often have higher fees and expenses and stricter rules for handling and selling the annuity. You should still compare insurance companies as an annuity provider against the other two types of companies.
The two main types of annuities are immediate and deferred annuities. Under each primary category, there are several sub-categories of annuities. Gather all of this information from your annuity provider, so you can determine which type of annuity best fits your purpose of investing in an annuity in the first place.
Next, you should consider all the fees, charges, and expenses the annuity provider charges for buying, maintaining, and selling the annuity. You should include all expenses, such as fees and expenses and annuity purchase fees. Some experts recommend trying to avoid an annuity provider that charges more than two percent.
AM Best and Fitch Ratings are two companies that assign ratings to specific annuities. If you narrow down to the specific annuity you want to buy, you can narrow it down to the annuity provider selling the annuity you want to buy. The higher the score, the better the annuity. Each rating company has its own rating system, so you’ll need to see how they rate annuities to see which currency is best for you.
Finally, you should check the death benefit offered by the annuity provider. A death benefit transfers annuity payments along with your spouse, but only if you die before annuity payments begin. You may want to choose an annuity provider that allows you to pay an additional cost to increase the time frame of your death benefit policy.
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