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What are the best annuity insurance companies?

There are over 2,000 insurance companies in the United States offering annuities in their product line. Each company will likely have multiple options available.

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The best annuity companies are the ones that are financially stable, who offer good quality advice to customers and offer a range of choices to investors. Read on to learn how to evaluate specific companies that offer this financial tool.

Financial Stability

When an individual is considering investing in an annuity, they are entering into a long-term relationship with the insurance company. The insurer holding the funds on the annuitant’s behalf must be financially stable so that the initial investment is protected.

Before choosing a particular insurer to hold an annuity, the investor should investigate the company thoroughly. Visiting the company web site is a good place to start this process. Clicking onto the “About Us” page will reveal how long the insurance company has been in business, as well as provide an idea of its financial assets.

To find out more about a particular insurance company’s overall financial health, check it out with one of the rating agencies that determine how well these companies are doing.

A.M. Best, Moody’s, Standard and Poor’s and Fitch can all provide this information, which is in the form of a letter rating. To get the best information about an insurer, check with all four reporting agencies to compare the ratings they have given to a company.

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Quality Advice

Buying an annuity is not an everyday occurrence for the average person, and making the right decision involves a lot of thought and planning. The insurance company offering the product should be able to provide a prospective or existing annuitant with information that is clear and understandable so that they can make a decision based on good quality information.

When choosing a provider for an annuity, it may be tempting to look at past performance and chase the plans that have paid out the highest rates to annuitants. Depending on the age and goals of the individual, a fixed rate plan that guarantees a set rate of return annually may be a better choice. A person who is prepared to accept a higher level of risk may want to look at an annuity with a variable rate of return.

The insurance company should be able to provide the customer with information about the different investment options available, including the historic rate of return for each one. The customer should be provided with the facts he or she needs to make a decision, including what each investment option is and the advantages and disadvantages of choosing each type of annuity.

The salesperson the customer is dealing with should be focusing his or her attention on the annuity that will help that person reach his or her goals, not the one that will yield the highest commission. The company representative should fully explain the options available, including any fees that will be charged for withdrawing or transferring the principal invested to another annuity.

Range of Choices

There are several types of annuities available to investors. The type of plan that is the best choice for one person may not suit another one. A person who is at or close to retirement age will likely want to focus on choosing an annuity that will provide a set level of return. A fixed annuity that guarantees a minimum rate of return would likely be the best choice for this type of buyer.

When there will be a number of years before the funds will be paid out, a variable annuity may be considered. With this option, the annuitant can choose where their money will be invested. A combination of mutual funds, money market funds and bonds may be used for investment purposes, and the rate of return will be determined by how the market performs.

An index annuity is tied to an equity index. This option provides a guaranteed minimum rate of return to investors, as well as the potential for a higher rate of return if the market is performing well. This option provides a balance between a fixed and a variable annuity.

The best annuity insurance companies are the ones that offer their customers several choices in investments so that they can choose the one that fits their needs and goals best. These companies are staffed by representatives who can give their customers detailed, quality information to help them make a decision. Finally, the best annuity companies are those that are financially stable and which can be entrusted with their customers’ investment funds.

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