4 Questions to Ask a Variable Annuities Agent

When considering variable annuities, you need to make sure that you understand what you will be purchasing. In order to ensure that you purchase the best variable annuity for your needs, you should not be afraid to ask questions. Here are a few questions that you should ask a variable annuities agent before purchasing.

1. What Can I Invest in?

When you purchase a variable annuity, you are going to be in charge of choosing your own investments. Since you will be making your own investment decisions, you should feel comfortable and satisfied with the investment choices offered to you. Many variable annuities typically allow customers to invest in mutual funds. Mutual funds provide a safe way to invest your retirement dollars. However, some people prefer to have more options than just mutual funds. Make sure that you understand all of the options that you will have available to you as an investor.

2. What Fees Will I Be Charged?

As the owner of a variable annuity, you are going to be charged something by the insurance company. You need to have the agent outline all of the fees that will be charged to you. Some annuity companies are going to take something out of the premiums that you pay them regularly. Other companies are going to deduct part of the money that you earn through investments. Regardless of where they take their money from, they are going to be getting fees from you. Understanding how the fees work can help you avoid any confusion later on.

3. What Is the Death Benefit?

Most variable annuities are going to have some type of death benefit available for investors. You need to understand how the death benefit works so that you know whether your loved ones will be taken care of in the event that you die. For example, some annuities will pay for the duration of your life or for 10 years. If you die 8 years after retirement, this type of annuity would pay your loved ones for only another two years. If this is unacceptable to you, you would need to find a variable annuity that has a more favorable death benefit for you.

4. Is a Guarantee Available?

Variable annuities are designed to pay you money based upon how your investments have done. Although this is how they typically work, some variable annuities will provide an option that guarantees a certain amount of income for you. In most cases, this is going to be an optional feature that you could choose. Being an optional feature, this will most likely cost you more money on your premiums. If you have any doubts about your ability to bring in consistent gains through investing, this might be something for you to consider. Having enough money during your retirement years is essential, and having some type of guarantee that money will be available can be attractive.

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