Disclosure Obligations For Annuities

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What are Disclosure Obligations in Annuities?

Disclosure obligations for annuities refer to the requirements for insurance companies to provide clear, accurate, and comprehensive information about annuity products to potential buyers. These obligations ensure consumers make informed decisions when considering an annuity as part of their financial planning.

Disclosure Obligations

Key Elements of Annuity Disclosure

  1. Product Details: This includes the type of annuity (fixed, variable, or indexed), benefits, and how it works.
  2. fees and Charges: Information about all fees, including administrative fees, mortality and expense risk charges, and surrender charges.
  3. Investment Options (for Variable Annuities): Details on the investment choices available and their risks.
  4. Surrender Period and Penalties: Details about the period during which penalties apply for early withdrawal.
  5. Tax Implications: Explanation of how annuities are taxed upon withdrawal or death of the annuitant.
  6. Riders and Additional Features: Information on any additional features like death benefits or living benefits.
Care Obligation Annuity

Examples of Disclosure Obligations

  • A fixed annuity disclosure would detail the guaranteed interest rate and period.
  • Variable annuity disclosures would include a prospectus outlining investment choices and their risks.
  • Indexed annuities would disclose how interest is credited, linked to a market index.

Benefits of Fulfilling Disclosure Obligations

  • Transparency: Clients fully understand the product, increasing trust and satisfaction.
  • Compliance: Adheres to legal requirements, avoiding penalties and lawsuits.
  • Informed Decisions: Clients can compare different annuities and choose the best for their needs.

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Disclosure Obligation Annuities


Disclosure obligations for annuities are critical for consumer protection and informed decision-making. They ensure transparency and trust between the insurer and the client. Understanding these disclosures helps in selecting an annuity that aligns with financial goals.

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Disclosure Obligation Annuity

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Are annuity companies legally forced to disclose fees?

In general, annuity companies must fully disclose all fees and other costs associated with their products before the customer makes a purchase. This disclosure must be in writing and provided to the customer during the sales process. It is important for customers to read all of this information carefully and ask questions if anything is unclear so they have a full understanding of what they are buying.

Do I have any recourse if an insurance company does not disclose fees pertaining to my annuity contract?

Yes. Suppose you believe your annuity company has not disclosed all fees and other costs associated with your product. In that case, you can file a complaint with the state insurance department or regulator where the company is licensed to do business. You may also consider seeking legal advice if you believe that a breach of contract has occurred and/or damages have resulted from any misrepresentations by the company.

Are there any tax implications for buying or selling an annuity?

Yes, there may be tax implications when buying or selling an annuity. For example, any gains made from the sale of an annuity may be subject to capital gains taxes, and distributions from the annuity may be taxable income. It is always important to consult with a qualified tax advisor to understand the full extent of potential tax implications.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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