By Rafael Onak, InsuranceAgents.com Staff Writer
With annuities being such complex and grand investments, there are many reasons as to why owners surrender annuities. Whether you own a variable annuity, fixed or an equity-indexed annuity, you should carefully consider the consequences of your actions because, in most cases, there’s no easy solution. The most popular reason why owners surrender annuities is because their financial situations have changed and they can no longer afford the annuity. The desire to combine several annuities into one is another reason why people surrender annuities. Compare rates on an annuity by using our quick online form to get up to 5 quotes.
However, if you’re looking to surrender annuities because you purchased something you didn’t fully understand, you need to learn from your mistake and contact an insurance agent or other expert before your next financial investment.
There are several consequences you will face if you decide to surrender annuities:
Keep in mind that if you surrender annuities for cash and then buy another annuity, you’ll still feel the wrath of tax penalties because the cash went through your hands.
Surrender Annuities and Endure the Consequences
Although it’s best to stick it out with your annuity, sometimes outside factors can make it impossible for that to happen. There are other alternatives you should look into first, however, before taking the plunge. If you want to switch one annuity for another without paying taxes, look into obtaining a 1035 exchange. In a 1035 exchange, you can choose an annuity with no load or a lower load than the one you currently own. Regardless of what you decide, contact your financial advisor to help you determine whether or not it’s in your best interest to surrender annuities. Find a local agent using our online quote forms to compare up to five offers from local agents.
Published: Wednesday 9th September 2009
