FAQ’s that should be asked to your insurance agent, account executive or company prior to considering the purchase, exchange or sale of a deferred annuity. 

There are a series of basic questions that you should ask your agent or company when considering deferred annuities.  This list is not designed to be complete in all material respects.  It is being provided as a general guide.  Thus, it should not be relied upon as legal or investment advice.

  • Is this a single premium or multiple premium contract?
  • Is this an equity-indexed annuity?
  • What is the initial interest rate and how long is it guaranteed:
  • Does the initial rate include a bonus rate and how much is the bonus?
  • What is the guaranteed minimum interest rate?
  • What renewal rate is the company crediting on annuity contracts of the same type that were issues last year?
  • Are there withdrawal or surrender charges or penaltiesp if you want to end your contract and take out all of you money?  How much are they?
  • Can you get a partial withdrawal without paying surrender or other charges or losing interest?
  • Does you annuity waive withdrawal charges for reasons such as dealth, confinement in a nursing home or terminal illness?
  • Is there a market value adjustment (MVA) provision in your annuity?
  • What other charges, if any, may be deducted from you premium or contract value?
  • If you pick a shorter or longer payout period or surrender the annuity, will the accumulated value or the way interest is credited change?
  • Is there a death benefit:  How is it set: Can you change it?
  • What income payment options can you choose?
  • Once you choose a payment option, can it be changed?

While the above questions are important for anyone considering the purchase of an annuity to ask, these questions are much more important for seniors and retirees.  As individuals get older, the pontential that they will need to access their capital for emergencies increases.

Before you decide to buy, exchange or close  an annuity, you should review the contract terms and conditions very carefully as the terms of each annuity contract vary.  Remember that taking money out of an annuity may mean you must pay taxes.

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