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 for your investment
When recommending an annuity, insurance companies and agents 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.
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 must tell you about the pros and cons of switching.
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 switching 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.