Insurance Library

Annuities > Shopping Tips

Annuity considerations:

• Calculate how much you have accumulated in your retirement savings. Determine how much of a chance there is of you outliving your savings.
• Choose the type of annuity right for you. Select between a guaranteed payout in a fixed annuity or possible higher (or lower) gains with a variable annuity.
• Estimate how long your money will remain in the contract. You don't want to run the risk of paying hefty surrender fees and taxes if you remove it too early. On average, it takes 10 to 15 years of tax-deferral to warrant a variable annuity over a mutual fund.
• Examine the financial status of the insurance company. If the company goes bankrupt, any state protection will be limited and chances are, you will lose out considerably on your investment. Check your insurance company's financial strength.
• Examine the fine print of your contract carefully, especially the mortality and expense (M&E) fee structure. Make sure you are getting what you're paying for.