Annuity Shopping Tips

If you decide that purchasing an income annuity is right for you, here are some tips when shopping for one:

Compare options

Compare different options. You may need both lifetime retirement income and income for survivors or heirs, such as a joint and survivor annuity. Another option is an annuity that guarantees to make payments for a minimum of five or 10 years.

Use a financially healthy insurer

You want a life insurance company with a strong financial rating because an annuity is a longterm arrangement. Several insurance company rating services measure financial strength, and the Internet or your public library, can help you check rating information.

Compare rates

Comparing rates among different insurers requires little paperwork and no physical exam. The Internet has made shopping for an annuity much easier. You want to get the annuity with the best price from the strongest insurer, or come as close to this ideal as you can.

Know about state protection

Your state insurance department may help clear up problems you might have with a specific company or representative. Each state also has a guaranty fund to protect individuals if an insurer becomes unable to pay benefits in full. Find out how this fund would cover your annuity contract, including any dollar limits that apply.