How to Purchase Annuity Rates
Annuities are long-term savings products which are also designed to provide you an income during retirement. Some annuity contracts guarantee you an income for life by immediately converting your savings to monthly payments. Other annuities defer this payment until a time you specify. Regardless of the annuity you purchase, you are often able to purchase a higher rate of return on some annuities. Make sure you understand how this is done so that you can get the most interest credited to your annuity contract.
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Instructions
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Contact several insurance companies and request their annuity rate sheet. An annuity rate sheet details the annuities that the company offers and the interest rates that they pay on their annuities.
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Look for banded rates on the annuity rate sheets. Annuities often pay interest rates that depend on the amount of money you deposit with the insurance company. The insurance company, like a bank, will pay higher rates according to higher deposits as well as timed deposits. This means that the more money you give the insurer, and the longer you agree to keep it with them, the more interest they will credit to your account. Generally, this only applies to fixed rate annuities (annuities paying a guaranteed fixed rate).
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Check for any special guaranteed accumulation riders. Ask the company or check the rate sheet for any guaranteed accumulation riders. These riders are typically found on variable annuities but may be available for some fixed annuities. Guaranteed accumulation riders guarantee a minimum account balance after a set number of years, regardless of how the annuity actually performs. This is important when fixed annuities offer a market value adjustment (an annuity that changes the interest rate when you cash out the annuity based on current market interest rates) or a variable annuity which has no guaranteed rate of return. Guaranteed accumulation riders ensure that you have a minimum guarantee on the amount of money you'll get from your annuity. In order to get the guaranteed minimum rate, you must hold the contract for a set number of years specified by the rider. These riders often come with a small fee that is charged to the annuity account balance. Normally, this fee is inconsequential, unless you cash in the contract. If you cash the contract in early, you lose the guarantee and are charged for the rider.
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