Annuities are powerful retirement tools, but they come with more moving parts than most financial products. Here are answers to the questions we hear most often from clients — organized by topic.
General Annuity Questions
What is an annuity?
An annuity is a contract between you and an insurance company. You make a lump-sum payment (or series of payments), and the carrier provides growth, income, or both — depending on the type of annuity you choose.
An annuity is a contract between you and an insurance company. You make a lump-sum payment (or series of payments), and the carrier provides growth, income, or both — depending on the type of annuity you choose.
Are annuities safe?
Fixed and fixed indexed annuities carry no market risk — your principal is protected. Annuity funds are backed by the issuing insurance company and additionally protected by state guaranty associations, typically up to $250,000 per carrier.
Fixed and fixed indexed annuities carry no market risk — your principal is protected. Annuity funds are backed by the issuing insurance company and additionally protected by state guaranty associations, typically up to $250,000 per carrier.
What types of annuities do you offer?
We work with fixed annuities, fixed indexed annuities (FIAs), multi-year guaranteed annuities (MYGAs), and annuities with income riders. We do not offer variable annuities.
We work with fixed annuities, fixed indexed annuities (FIAs), multi-year guaranteed annuities (MYGAs), and annuities with income riders. We do not offer variable annuities.
How much money do I need to buy an annuity?
Most annuity contracts have a minimum premium of $5,000–$10,000. Some carriers accept as little as $2,500 for MYGAs, while premium bonds on larger FIAs may start at $25,000 or more.
Most annuity contracts have a minimum premium of $5,000–$10,000. Some carriers accept as little as $2,500 for MYGAs, while premium bonds on larger FIAs may start at $25,000 or more.
Growth & Returns
What kind of returns can I expect?
Fixed and MYGA annuities currently offer rates in the 4–6% range depending on term and carrier. FIA returns vary based on index performance but typically average 4–7% annually over long periods. Past performance does not guarantee future results.
Fixed and MYGA annuities currently offer rates in the 4–6% range depending on term and carrier. FIA returns vary based on index performance but typically average 4–7% annually over long periods. Past performance does not guarantee future results.
Are annuity gains tax-deferred?
Yes. Growth inside an annuity is tax-deferred until withdrawal. For non-qualified annuities, you pay ordinary income taxes on gains when you withdraw. For qualified annuities (IRA/401k), the entire withdrawal is taxable.
Yes. Growth inside an annuity is tax-deferred until withdrawal. For non-qualified annuities, you pay ordinary income taxes on gains when you withdraw. For qualified annuities (IRA/401k), the entire withdrawal is taxable.
Can I lose money in a fixed or indexed annuity?
No. With fixed and fixed indexed annuities, your principal is guaranteed. In a fixed indexed annuity, the worst you can earn in a given year is 0% — you will never go negative due to market losses.
No. With fixed and fixed indexed annuities, your principal is guaranteed. In a fixed indexed annuity, the worst you can earn in a given year is 0% — you will never go negative due to market losses.
Access & Withdrawals
Can I access my money early?
Most annuities allow a free withdrawal of up to 10% of your account value per year. Withdrawals above that during the surrender period incur surrender charges, which decrease over time until they reach zero.
Most annuities allow a free withdrawal of up to 10% of your account value per year. Withdrawals above that during the surrender period incur surrender charges, which decrease over time until they reach zero.
What happens if I die before receiving all my money?
Most annuities include a death benefit that passes your account value (or a guaranteed minimum) to your named beneficiaries, outside of probate.
Most annuities include a death benefit that passes your account value (or a guaranteed minimum) to your named beneficiaries, outside of probate.
What is a surrender period?
The surrender period is a set number of years (typically 3–10) during which early full withdrawals are subject to a declining surrender charge. After the surrender period ends, you can move or withdraw your money freely.
The surrender period is a set number of years (typically 3–10) during which early full withdrawals are subject to a declining surrender charge. After the surrender period ends, you can move or withdraw your money freely.
Working With Us
How do you get paid?
We are compensated by the insurance carriers through commissions, which are built into the product — you pay nothing out of pocket or above the contract terms for our services.
We are compensated by the insurance carriers through commissions, which are built into the product — you pay nothing out of pocket or above the contract terms for our services.
Why use an independent broker instead of going direct?
As an independent broker, we are not captive to any single carrier. We shop the market across multiple companies so you get the best rates, terms, and features for your specific situation — not just what one company offers.
As an independent broker, we are not captive to any single carrier. We shop the market across multiple companies so you get the best rates, terms, and features for your specific situation — not just what one company offers.
What states do you serve?
We are licensed in 35+ states and serve clients entirely by phone and online. Call 1-888-972-0024 to speak with an advisor.
We are licensed in 35+ states and serve clients entirely by phone and online. Call 1-888-972-0024 to speak with an advisor.
Still Have Questions?
Our annuity specialists are available 7 days a week to walk you through your options with no pressure and no obligation.