Speak with a Registered Agent: 1-866-223-2121

Speak with a Registered Agent: 1-866-223-2121

Tips for Buying Annuities from Money Magazine


By

Walter Updegrave, editor of Money magazine, recently wrote about the conventional wisdom of annuities being a safer investment and wondered if that is still true today. He believes that an annuity continues to be a good option, but that you need to keep several guidelines in mind when you compare annuities.

  • Number one on your checklist is to make sure that the insurer you buy your annuity from is healthy and solvent. If an insurance company fails, you will lose whatever money you put in it. Purchasing only annuity products with A.M. Best or Standard & Poor’s ratings of A or better will assist you in deciding which insurers are financially strong.
  • Walter also suggests dividing your investment into multiple annuities from different companies. Since states provide about $100,000 per insurer from guaranty associations, purchasing from several insurers will hedge your bets in the case that one or more of them fails.
  • Ask and receive detailed and clear information about all fees attached to the annuity; including surrender fees, investment fees, rider and guarantee fees, and insurance charges. Understand what the percentages are and when they are due.
  • Of course, the best way is to protect your investment is to know exactly what you are buying and to make sure if it’s the right product for you. According to Walter, many guaranteed variable annuities add their promised growth rates to a ‘benefit base’ (that the insurer calculates as a hypothetical amount you’re allowed to draw from an annuity) as opposed to your true account value. Such accounts could result in a nasty shock if you cash out, because you will receive only your actual account value.

For more information about the product mentioned in this article contact us here:

Newest Blog Posts

Information Request Form

If you have questions or would like more information, please complete this form and a licensed professional will be happy to help. For the fastest response, please select 'Phone' as your Contact Preference.

By providing your information and clicking 'Submit' above, you acknowledge that you have read and agree to this site's privacy policy. You also provide your consent to be contacted at the email address or phone number provided above (including any wireless number) by licensed agents or representatives from or on behalf of Somerset Wealth Strategies, LLC and other companies to provide the information requested and/or offer annuities or financial products. You understand that these calls or SMS messages may be generated using an automated telephone dialing system, a pre-recorded message, or artificial voice. Consent to receive such messages is not a condition to purchase any goods or services. You may opt out at any time by following the instructions in the messages you receive.  Receiving quotes and information through our website is free, and you are under no obligation to purchase any goods or services as a result of this request. You affirm that you are the subscriber of the provided telephone number or that the subscriber authorized you to provide the number. Message and data rates may apply. Somerset Wealth Strategies, LLC is committed to respecting your privacy and adhering to all applicable laws and regulations, including the Telephone Consumer Protection Act (TCPA).