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Insurance companies Annuity: The Best Annuity Companies & Providers

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Yes most of us know what an insurance company can do for us, have you ever been taught of this section of insurance called insurance companies annuity; the question is, what is an annuity and how does it help out in the life of people?? Annuities are contracts issued and distributed by financial institutions where the funds are invested with the goal of paying out a fixed income to the persons involved. On another note, annuities are designed to help you grow your retirement income. They’re long-term contracts from an insurance company where you invest your money in return for your investment, you get income in the form of regular payments.

Insurance Company Annuity

I guess we all know that they are mainly used for retirement purposes and help individuals address the risk of outliving their savings.

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Annuities make the most sense for individuals with longevity in their families, example- individuals likely to reach the age of 90, a lifetime income stream is essential for them.

Annuity products are regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Agents or brokers selling annuities need to hold a state-issued life insurance license, and also a securities license in the case of variable annuities. These agents or brokers typically earn a commission depending on the value of the annuity contract.

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The period of time when an annuity is being funded and before payouts begin is referred to as the accumulation phase.

Finally, Annuities are appropriate financial products for individuals seeking an economical, stable, guaranteed retirement income.

FAQS: frequently Asked Questions About Annuity Providers

What is an annuity provider?

Annuity provider is either an insurance companies, independent brokers, banks and other financial entities providing financial assistance to its contract holders. However many organizations sell annuities, only an insurance company can formally issue the annuity contract.

How do you choose the best annuity provider?

You go through this through Research, reputable providers with high ratings and compare the providers based on your financial needs. Then look for providers with up-to-date listings on the best annuity rates and available products.

Can I buy annuities directly?

This is possible, You can purchase an annuity directly from a reputable provider; however, most annuity purchases occur through an intermediary, such as an independent agent or financial advisor.

Annuities and Annuity concept (Insurance companies Annuity)

People worry about how their retirement could turn out to be like, considering the fact that it can annuity can lead them through their retirement years.

Annuities were developed to help alleviate these concerns, therefore annuity is essentially a contract with an insurer, where individuals agree to pay the company a certain amount of money, either in a lump sum or through installments.

However, you must know that these payments often last for a specific time span say, 10 years, some annuities company offer lifetime disbursements.

The number of annuity products keeps on upgrading over the years, this is  true for fixed contracts that credit your account at a guaranteed rate, as well as variable contracts,.

Also, returns are attached to a basket of stock and bond funds, there is even indexed annuities, where performance is linked to a specific benchmark, such as the S&P 500 Index.

Considerations for Annuities

Unluckily, as with permanent life insurance policies, annuity products also command substantial upfront commission fees that can erode long-term gains.

They also feature high surrender fees, which are essentially penalties investors must pay for prematurely withdrawing funds from an annuity contract, or canceling it altogether.

For younger investors, variable annuities are only prudent if they’ve already maxed out their 401(k) and IRA contributions.

Qualified annuity contracts are those held in IRAs or other tax-advantaged retirement plans, like 401(k)s. A qualified annuity is funded with pre-tax dollars, and a non-qualified annuity with post-tax dollars.

Qualified annuity contracts are subject to the same early withdrawal penalty and required minimum distribution rules as other investments in qualified retirement plans.

Top Benefits of annuities (Insurance companies Annuity)

An annuity can help you save additional money for retirement once you’ve maxed out other tax-favored investments.

Annuities can help you catch up on retirement savings when you have less time to save.

Annuities offer potential for tax-deferred growth and an income stream for life.

Factors to consider when choosing an Anuuity

  • Yearly fees and other administrative fees.
  • Minimum guaranteed return.
  • Rating from an independent ratings company like Standard & Poor’s, Fitch, AM Best, Moody’s, and TheStreet.com.
  • Death benefits.
  • Surrender fees, should you choose to withdraw the funds early.
  • The provider’s financial health.
  • Online reviews.

A little difference between Life Insurance and Annuity

Both annuities and life insurance should be considered in your long-term financial plan. While both include death benefits, you buy life insurance in the event you die too soon and an annuity in case you live too long.

In other words, life insurance provides economic protection to your loved ones if you die before your financial obligations to them are met, while annuities guard against outliving your assets.

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Annuity can be purchased from (Insurance companies Annuity)

  • Independent broker-dealers, like Raymond James.
  • Large banks, such as Bank of America.
  • Annuity distributors, including large brokerage firms known as warehouses, such as Merrill Lynch and Morgan Stanley.
  • Mutual fund companies like Vanguard and T. Rowe Price, which are considered some of the most competitive companies because they offer lower fees
  • Thousands of independent agents, brokers and financial advisors across the country.

NOTE: If you purchase an annuity from one of these middlemen, normally you will continue to work with them directly as you manage your contract.

Tabular Representation of Annuity chart

Benefit Variable Registered index-linked Fixed Immediate Fixed indexed
Guaranteed income for life for you
Guaranteed income for life for your spouse
Cost-of-living adjustments
Guaranteed minimum withdrawal benefits
Protection against market losses
Access to your funds, up to a specified limit
Potential to leave a legacy to heirs

How do annuities work?

An annuity is a long-term investment that is issued by an insurance company and is designed to help protect you from the risk of outliving your income. Investing involves risk, and the worst part of it is that at some point your investments may lose value.

Below are the steps on how it works:

  • Invest a lump sum or invest over a period of time.
  • Start receiving payments immediately or at some later date.
  • Select a fixed, variable or indexed rate of return.

All guarantees and protections are subject to the claims-paying ability of the issuing insurance company, but the guarantees do not apply to any variable accounts.

Annuity Advantages (Insurance companies Annuity)

Check below for the good things you can achieve while enjoying annuity

  • Retirement income: You want to turn the money you’ve saved into a regular paycheck for a specified number of years or for life.
  • Death benefit: Here you consider an efficient way to leave a legacy for your loved ones.
  • Protection and growth: This involves growing your money while protecting all or some of it from loss.
  • Tax-deferral: You want to take advantage of tax-deferred growth.

However, important things to keep in mind about Annuity

  • Not a bond or a certificate of deposit (CD).
  • The Not insured by the FDIC, like a bank CD or a checking or savings account, or by any federal government agency, or guaranteed by a bank or credit union.
  • Not ownership of shares of any individual stock, index fund or mutual fund.
  • Annuity guarantees are backed by the financial strength of the issuing insurance company.
  • Not available for “instant access” like a bank account. While a portion of your money is available each year for a penalty-free withdrawal, an annuity should be used as part of your long-term retirement plan.

Tabular Representation of different Annuity Companies

Company Description Credit Rating Products Available
American Equity Investment Life Holding Company American Equity is an industry leader in the development and sale of fixed indexed and fixed-rate annuity products. It is licensed to sell in all 50 states and Washington, D.C. A-
  • Fixed indexed annuities
  • Fixed annuities
  • Immediate annuities
American National Insurance Company  A major provider of insurance and annuities, its products are distributed through career agents, independent marketing organizations and multiple line-exclusive agents. A
  • Fixed deferred annuities
  • Single premium immediate annuities
  • Indexed deferred annuities
AIG Life AIG products and services include life and travel insurance, mutual funds, structured settlements and annuities. A
  • Indexed annuities
  • Variable annuities
  • Fixed annuities
John Hancock John Hancock operates today as a subsidiary of Canadian-based Manulife Financial. The company sells these products primarily through licensed financial advisors and a national network of independent firms. A+
  • Variable annuities
  • Fixed annuities
  • Immediate annuities
Lincoln Financial Group Lincoln Financial offers a diverse range of financial services including life insurance, retirement plans and annuities — fixed, fixed indexed and variable. The company is based in Philadelphia. A+
  • Fixed annuities
  • Fixed indexed annuities
  • Variable annuities
MetLife MetLife is among the world’s largest providers of insurance, annuities and employee benefit programs, with 90 million customers in more than 60 countries. It was founded in 1868 and is based in New York City. A+
  • Variable annuities
  • Single premium deferred annuities
Midland National Life Insurance Company It also has an A+ rating from Standard & Poor’s, Midland National now services more than 1 million life and annuity policies. A+
  • Fixed indexed annuities
  • Multi-year guaranteed annuities
  • Single premium immediate annuities
Mutual of Omaha Founded in 1909 and with  long-time sponsorship of a popular Wild Kingdom television show, Mutual of Omaha offers deferred and immediate annuities. A+
  • Income (immediate) annuities
  • Deferred annuities
Nationwide Nationwide has more than 85 years of experience with retirement planning. A+
  • Variable annuities
  • Immediate annuities
  • Fixed annuities
  • Fixed indexed annuities
New York Life New York Life is one of the largest life insurance companies in the world and one of only three life insurers to hold the highest ratings from all four rating companies. A++
  • Fixed deferred annuities
  • Variable annuities
North American Company for Life and Health Insurance (North American) North American offers a holistic portfolio of annuity and life insurance products to meet a range of needs among diverse policyholders. A+
  • Fixed indexed annuities
  • Multi-year guaranteed annuities
  • Single premium immediate annuities
Pacific Life  In 1955, it became the first company west of the Mississippi River to computerize its operations. A+
  • Fixed annuities
  • Fixed indexed annuities
  • Variable annuities
Prudential Prudential sells life insurance, mutual funds, group insurance, retirement services, investment management services and variable annuities.
  • Variable annuities
  • Indexed variable annuities
  • Fixed annuities
  • Fixed indexed annuities
TIAA-CREF The New York State Legislature created the Teachers Insurance and Annuity Association – College Retirement Equities Fund in 1918. Today, TIAA-CREF is the chief retirement vendor for people in the academic, medical and cultural professions. A++
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