By Anna Neiger, InsuranceAgents.com Writing Team
Everyone makes mistakes—we’re only human. But when it comes to annuities, we have to be extra careful. If we make too many mistakes with annuities, we only hurt ourselves. Here are a few mistakes too many people make and that you definitely want to avoid: (If you are looking for annuity quotes, use our online form to compare up to 5 quotes quickly.)
Let’s say you want to take all of your savings and convert it into annuities so when you retire, you’ve got a nice big nest egg to curl up in. The big nest egg part sounds great, but putting ALL of your savings into annuities is a BAD IDEA. Once it’s in annuities, it’s hard for you to get at, and if a financial crisis strikes, you could be up a creek without a paddle (to put it mildly). It’s NEVER a good idea to put all of your savings somewhere you can’t touch it.
There are certain fees that apply to annuities, and if you don’t consider them carefully, they could add up over time, eventually sneaking up on you when you least expect it. You have to read the expense page of your annuities contract carefully to find out what percent of your gain is taken up by fees.
All annuities have surrender periods, a fixed length of time that the insurance company can penalize you for early withdrawal from annuities, some lasting up to fifteen years. If you want to have access to your money even while it’s invested in annuities, you need to understand the surrender periods before signing anything.
With annuities, you have to name beneficiaries in case you pass before your pay out period arrives. If this unfortunate happening is the case, the money from your annuities goes to the beneficiaries you’ve named in your contract. Think carefully and make sure it’s very clear who the annuities money goes to if something bad should happen.
Remember to shop around for annuities by using our online form to compare up to five quotes.
Published: Monday 17th August 2009
