Best Fixed Annuity – All The Different Options That Go Into Assessing The Right Annuity

Written By: John C. Ryan on November 24, 2009 2 Comments

Those seeking the very best fixed annuity available needs to look towards one that serve your needs in the best manner. Not every individual that opts to purchase an annuity wishes to use the money immediately. In this particular case, an anuity can be considered a deferred annuity. Others that absorb the money immediately to use their annuity for immediate purposes as companies will vary the amount of interest they receive. This is done when they offer the product. In general, outcomes will vary based on whether one opts to take it immediately or defer the payment. That is why it is best to seek an annuity that is best for the situation.

The rate is not the only important factor. Also important is the length of time that you will receive the rate. How long is the rate locked in for? With this high rate, is a bonus rate included where you will only receive a deposit and then the rate will drop dramatically? These things need to be investigated immediately when you are seeking the absolute best fixed annuity available.

All fixed annuities have a basement guaranteed rate. This rate is the lowest amount that the company pays, regardless of the rate conditions. While it might look ridiculously low in good times, often that rate is a huge incentive to add to the annuity when the rates drop dramatically everywhere else. At the time of writing this article, November 2009, the interest rate you can receive on the best fixed annuity can reach as high as 8%, a great offer compared to the low interest options of other safe investments in the marketplace.

You need to find if you can add to the annuity later if you want to do so, if you want a deferred annuity. Some companies only allow one lump sum and then you have to purchase another product to add to later.

Annuities have other factors besides rate, which you need to look at when separating the best annuity for your particular situation. The length of the surrender period is often extremely important. If you want to use the funds later but don’t want to take annuity payments, you need to find out how soon the money is accessible to you without a penalty.

Here is another aspect to consider: Look to learn if the annuity offers fee free withdrawal options. A variety of companies will present a one time ten percent withdrawal without any known penalties while others are considered far more liberal. Those that have an annuity with a very high interest rate while discover such annuities have longer surrender periods and this amount of time you must wait to take money will be clearly visible on the contract. The longer period is not one that a number of people venturing into retirement age unless there is a clearly beneficial free withdrawal that can adequately fit into their individual schedules. Some of the more liberal ones can allow 10% per year are decent but cumulative withdrawal and this will allow you to remove ten percent and those that do not use it will learn it adds to the next year.

Ask for a quote if you’re taking payments from the annuity. If you take a lifetime of payments that you can’t outlive, you need to remember that if you pass away, your payments stop. That means that if you put $100,000 into an annuity and took only one payment then passed away, the insurance company keeps the rest. One way to avoid this is to take a lower payment that guarantees a specific number of years of payments, a return of principal or adds a second person as an annuitant.

The best fixed annuity for your situation isn’t necessarily the best one for your neighbor or cousin. You need to get several quotes and seek the advice of an annuity specialist to find one that fits your situation.

John C. Ryan provides advice and the latest information on anuity insurance. Come see us for more information on how to pick the best fixed annuity .