to Do Before Purchasing An Annuity
all promotional material carefully. If it
seems too good to be true, it probably is.
- Know the type of annuity being
Is it a fixed annuity, equity indexed or a variable
annuity? The type of annuity differs by levels of
guarantees, risks and benefits.
- Do the benefits meet your
- Do not buy the product unless
you understand it.
Seek advice from people you trust. Understand the
advantages and risks of purchasing an annuity.
- Ask how long the “free-look”
This is the time that you have to review the contract
and get your money back if you have made the wrong
You should take the time to consult with financial
professionals that you trust.
- Determine your investment
How long can you go without needing the money you
are about to use to purchase an annuity?
If you will
need the money within 10 years, a deferred annuity
may not be the right choice for you.
- Ask about fees for partial
or full withdrawal of the contract.
Find out how much they are and for how long they apply.
Make certain you understand all of the fees associated
with the purchase of an annuity.
- Ask if there is a guaranteed
death benefit and if any withdrawal charges apply
- Ask about the credited interest
How long is it guaranteed and how is it determined?
- Understand the tax consequences
of purchasing an annuity, including the effect of
annuity payments on your tax status in retirement.
For example, will you be prepared to pay the additional
income taxes that may result from your annuity payments?
Will you need the money before you are 59½
and have to pay tax penalties? You may want to consult
a tax adviser that you trust.
- Make sure your agent is licensed
to sell annuities. Only individuals who are
financial professionals as defined by the NASD are
qualified to sell variable annuities. Check to see
if your agent is appropriately licensed.
- If you are exchanging one
annuity for another one, determine if the benefits
of the exchange outweigh the costs, such
as any surrender charges you will have to pay if you
withdraw your money before the end of the surrender
charge period for the new annuity.
- Evaluate the company issuing
Need more info? For additional help with insurance
in Nevada, call 1-888-467-4195.