Authored by David Corwin
I read an article recently about annuity fees. It spoke about most clients thinking that there are fees and that annuities are expensive. In fact, that couldn’t be farther from the truth. You will never find a fee on Indexed Annuities themselves, with the exception of GLWB’s of course. That’s an income rider that guarantees an income to the annuitant for the rest of their lives.
The perception that there are fees and that annuities are expensive was probably born out of Variable Annuity customers. VA’s are the most fee-heavy annuity contracts sold to date. The typical VA has charges close to 4.5% all together. Those charges are: Administrative Service Charge, Contract Maintenance Charge, Mortality & Expense Risk Charge, Underlying Fund Expenses and optional rider fees.
They say that Indexed Annuities are complicated? Indexed Annuities don’t have prospectuses and they don’t have fees, period.