Before buying an annuity, think about:
- Your financial goals
- How much money you have to invest
- When you want to start taking money out of your annuity
- How much of a risk you're willing to take with your investment
When recommending an annuity, insurance companies, agents, and brokers need to consider your finances, taxes, investment goals, and other information.
Before you buy an annuity
- Compare similar annuities from several companies. Annuities have different rates and types.
- Ask for and read all disclosure information.
- Ask the company representative to explain anything you don’t understand.
- Check the company’s financial rating through a rating service.
- Know how much money you can take out each year. Make sure it’s enough to meet your needs.
- Talk with a tax or financial consultant before you purchase an annuity.
After you buy an annuity
- If you're unhappy or the contract isn't what you expected, you have 10 days to return it for a refund.
- It’s a good idea to get advice from a tax or financial consultant before taking out money.
- If you cancel your annuity and look for another one, you might have to pay fees and taxes.
- If you replace your annuity, your agent or broker must tell you about the pros and cons of switching and make sure that it is in your best interest.
How to find an old annuity
Finding an existing contract can be difficult if you do not know the policy number or the name of the insurer, but we have put together tips to help you find your annuity.
Watch out for annuity fraud
It's easy to get confused about the benefits and risks of annuities. Follow these tips to protect yourself:
- Don't buy too quickly: If an agent or broker tries to get you to buy an annuity today, don't do it. Tell them you need more time to decide.
- Be careful when replacing annuities: If an agent who sold you an annuity last year now recommends replacing it, ask why. Make sure you understand their answers.
- Only buy from a licensed agent or broker: Find all licensed agents and brokers through our website.
- Avoid "free" seminars: People who run these seminars will often pressure you into buying. They may invite you to a private appointment to try to sell you something.