Finding the Best Annuity Rates
If you are looking for an investment for your money, finding an annuity that offers some of the top rates available is not as difficult as you probably think. There are lots of sources where you can get the information you need, you just have to know where to look.
First, decide on how much you are willing to invest, for how long and the frequency of payments you can afford to make. It may be monthly, quarterly or annually. Do you want it long-term or only for a year or two? Long-term annuities offer bigger returns on your investment. Then you may try the following tips:
1. Some insurance companies offer special promotional rates to boost sales of products they are offering. You can ask your financial advisor if he knows of any. Check out the details. Find out if the terms fit your investment goals, your time frame and your budget.
Browse the internet for companies that offer annuities. See what products and rates they are offering and how they compare against other carriers.
Try to get as much data on various products as you can. Decide on which type of annuity you are going to place your money on. When comparing, make sure that you are comparing annuities of roughly the same terms and provisions. Of course, if you compare one that carries a 15-year contract to one that has a term of only 5 years, the disparity will be great.
2. Consider also the riders these products carry. Life and accident insurance are sometimes included in the contracts. These provisions may spell the difference. There are some that offer payouts at certain intervals within the contract period or even for life. Others only offer a lump sum payment at the end of the contract. In some cases, both options are available.
Other companies offer both fixed and variable rates. Fixed rates are guaranteed and depending on current prevailing rates, higher returns are given. Decide on which options will work best for you.
3. Consider also the risks. Remember, all investments carry risks. Beware of scams and fly-by-night companies. Buy only from reputable firms.
Whatever annuity you decide to invest on, keep in mind that it is your hard-earned money you are parting with. So before committing to a contract, make sure that you have studied it very well and are well aware of all its provisions. Risks can be minimized, if not totally erased with proper information.
Annuities are best suited for long term investors. Any withdrawal prior to age 59 ½ is subject to a 10% tax penalty as well as regular income tax. Annuities often also have a surrender schedule, meaning that withdrawals may be subject to a penalty by the insurance company if not left in for a predetermined amount of time. Any guarantees on principal invested is based upon the claims paying ability of the underlying insurance company.