Exploring Fee Structures in Different Annuities
- Single Premium Immediate Annuities (SPIAs): These annuities typically do not have traditional management or administrative fees in their base contracts.
- Multi-Year Guarantee Annuities (MYGAs): MYGAs are known for their lack of traditional fees within the standard contract, focusing instead on fixed interest rates over a set period.
- Fixed Annuities: Standard fixed annuities generally do not include traditional fees, offering a stable and predictable return.
- Fixed Indexed Annuities: Like other fixed annuities, these do not usually have traditional fees in their base contracts, but returns are tied to a market index.
Consideration of Surrender Charges
- Surrender Charges: Although the above annuities might not have traditional fees, they often come with surrender charges. These are fees applied if funds are withdrawn prematurely, typically within the first several years after purchase.
Exception with Return of Premium Rider
- Return of Premium Rider: Annuities with this rider stand out as they can waive both traditional fees and surrender charges. This rider guarantees the return of total premiums paid under certain conditions, such as the annuitant’s death.
Not all annuities have traditional fees. SPIAs, MYGAs, fixed annuities, and fixed indexed annuities often exclude these fees in their base contracts but may include surrender charges. Annuities with a Return of Premium rider can potentially waive both fees and surrender charges. Understanding these nuances is vital for making informed annuity choices. Contact us today for a free quote.
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