What’s the Best Place to Buy Annuities

Since their introduction in the United States over 200 years ago, annuities have stood the test of time as valuable retirement planning vehicle.  After serving a vital role during the economic turmoil of the Great Depression, annuities have evolved and proliferated to the point where buying an annuity today is like walking through a warehouse store filled, end-to-end, with nothing but annuities. For those people who have determined that an annuity can best fit their needs for a secure retirement, they are left to wonder what’s the best place to buy an annuity.

Annuities vary in flavor, complexity and investment purpose.  While they are all designed as a way to fund a lifetime of income, there are differences between the various types of annuities that may require a different approach as to how and where one is purchased.

If it was possible to buy annuities from a large warehouse store, investors would be left to their own devices for getting the information or services that is needed for making the right decision on some of the more complex product such as variable annuities.

There are, in fact, warehouse stores in the form of on line annuity product aggregators.  On these sites you can find an inventory of all annuity products along with tools for researching and comparing them based on their different categories.  Sites such as AnnuityAdvantage.com list hundreds of annuities in various categories and provide the capability of sorting and comparing those using key factors such as company ratings, available options and current yield.

Fixed yield annuities such as CD-type and fixed deferred can be shopped on these sites with full consideration for the quality of the provider as determined by rating agencies and its ability to offer competitive yields or payouts.  Other factors such as minimum investment requirements, product guarantees  and surrender schedules are available at the touch of the  “learn more” button .  This  can truly streamline the process of narrowing your selection down to a manageable number of providers.

For most of these annuities, you are directed to a company representative to complete the purchase. While it may be your desire to avoid having to deal with a salesperson, your shopping experience has provided you with enough information and competitive knowledge so that you can be in control of the conversation.  The value of a salesperson is in his ability to answer any questions and to handle the processing.  It will be in his interest to make sure it gets done correctly and to ensure that you receive the proper service.

Immediate annuities can be shopped through an online annuity store, but, because the payout rates are gender and age based, you may be required to submit a request form in order to get a quote.  Immediateannuities.com offers a 9-page report with a full listing of quotes from providers along with the promise of no contact from a sales rep.

This is best way to shop for immediate annuities because you’ll be able to identify which of the most highly rated companies offer the most competitive payout rate. The report will include detailed product descriptions along with payout options, inflation riders, and refund options.   Again, if you’re using this site, you will most likely need to contact the provider in order to complete the purchase.  With immediate annuities it is recommended that you work with the provider through its reps in order to ensure that you’ve structured the product in a way that best fits your needs.

Variable annuities are more complex than fixed annuities in that they include an investment element.  They can still be shopped on annuity store sites such as AnnuityFYI.com and the information that is available is very detailed.  Most  of the key features and provisions that competitively differentiate one product from the next are included.  Expenses and surrender fees are key factors in comparing variable annuities and they are detailed within each product’s description.  Optional guarantees and product bonuses are also competitive features that each provider wants to highlight and they can be compared on the site.

The overriding factor for comparing variable annuities is the investment performance of the subaccounts.  While there are descriptions of the asset allocation models and investment objectives, the past investment performance information is generally not found on these sites.  Variable annuities can only be sold by prospectus and it there where the provider will provide this information.  Again, you will need to contact the provider for additional information and a prospectus but, the on line store will help you to quickly narrow your choices.

When purchasing a variable annuity, it is recommended that you work with a representative of the provider.  The better providers provide valuable assistance in the allocation of the subaccounts and variable annuities, more than their fixed yield counterparts, do require ongoing servicing and consultation to ensure it continues to fit your changing financial situation.

What’s the best place to buy annuities?  Let your fingers do the walking on your keyboard and you’ll be able to get through 80% of the shopping experience.  The annuity provider will be the checkout stand and your service provider.