Find the Best Fixed Annuity Rate
Trying to find the best fixed annuity rates can be a daunting task, especially if you do not have a real grasp on how these products work. With more insurance companies offering fixed annuities, you have so many choices to consider. To make it easier to find the best fixed annuity rates, it makes good sense to seek the help of an independent insurance professional who can provide you with dozens of quotes.
Talk to trusted professionals
Getting advice from your accountant or banker who has more experience than you when it comes to annuities is a good start. Although your local banker or accountant probably will not be able to find the best fixed annuity rates for you, they may be able to put you in touch with an independent insurance professional who can.
How much do you need, and when do you need it?
Fixed annuities can be an important part of your retirement plan. The essential questions you have to answer are how much income will you need and when will you need it? When current interest rates are low, it is harder to find a fixed annuity that will pay a healthy interest rate. That may mean that in order to achieve your desired monthly income, you may have to purchase a larger annuity.
Comparing different fixed annuities
Your agent has access to all of the leading insurance companies that sell fixed annuities and can easily compare the features of them all. Some insurance companies will offer a more attractive rate than others in order to increase the number of annuities that they can sell. Annuities are very popular now and competition among annuity sellers is strong. You must be careful if you see ads for annuities that promise annual returns that are way above the rates being offered by the competition. You should also understand that your rate of return is not the same as the interest rate.
For potentially higher rates, consider an indexed annuity
If after seeking out fixed annuity rates you find those rates are not attractive, you may want to consider an indexed annuity. Indexed annuities provide the potential for higher excess interest rates over the long term through a variety of index-linked interest-crediting methods. Like traditional fixed annuities, indexed annuities also offer the security of principal protection with a minimum interest-rate guarantee.
Understand the product you are buying
Buying an annuity is a big decision whether it is costing you $25,000 or $250,000. One thing to consider: If you later decide you bought the wrong annuity and want to get out of the contract, you will most likely be subject to surrender charges in the early years and possibly experience tax consequences. So if you do not understand an annuity clause, ask the annuity specialist to explain it to you.
If you are buying an immediate fixed annuity, your payout will start immediately. If you are buying a deferred fixed annuity, your payout will start at some point in the future, which may result in a higher monthly income.
Have confidence when you buy
We all want to buy a fixed annuity that pays the highest rates and gives us the highest income, but there are no free lunches in life. You always have to give up something when you get something. With annuities, you may get a higher rate in return for buying a larger annuity. Sit down with an independent agent who understands the intricacies of annuities. Let the agent show you the different choices you have. Take some time to think it over. It may take some time to decide, but when you do, you can be confident that you are getting an annuity that fits your plans for the future.