How Much Do Annuities Cost?

Annuities have their own costs associated with them, which vary based on how elaborate the annuity itself is, and are expressed as percentages rather than flat rates. It also depends on the annuity value – something that is highly variable between policyholders. There are multiple costs involved, each making up for their own percentage of the annuity’s overall value.

What Types Of Costs Will I Need To Cover?Medicare

Annuities have multiple types of fees. These fees include:

  • Administration fees
  • Commission fees
  • Mortality expenses
  • Surrender fees
  • Investment expense ratio

How Much Will I Pay In Administration Fees?

Administration fees are annual, not per premium. These also hold the distinction as being the only type of cost that some companies may charge as a flat rate. Most administration fees are roughly 0.3% of the annuity, but they can be up to $30 if your company charges a flat rate.

What Are The Commission Fees?

Commission fees go directly to the insurance agent. These are already built into your contract. Like administration fees, commission fees are yearly.

Commission fees range from 1% to 10% of the contract value, but how much you’ll pay depends on how complex your annuity is. You’ll pay less if you have a fixed annuity that just gains interest, as opposed to an indexed annuity that requires managing the investment.

What Are Mortality Expenses?

Mortality expenses aren’t placed under the condition of a death happening. This is an annual cost that insurers implement to compensate for the risk of insuring a certain individual. Sometimes it’s part of the commission itself. This is typically no more than 1.5% of the policy’s value.

What Are Surrender Fees?

Surrender fees are costs you’ll incur if you withdraw more than the amount your scheduled payment amount. This fee decreases as time goes by, but it is initially steep – sometimes as high as 7%. Surrender periods are a fixed number of years, and vary based on the annuity you purchase.

What Is The Investment Expense Ratio?

This is an annual cost, and is only present in annuities that grow based on the stock market. You will not have this fee if you have a fixed annuity. This is the expense for investment management, and is roughly between 0.6% and 3% of your annuity value.

Get The Most For The Lowest Costs

At Secure Insurance Group, we make annuities easy. With us, you will have an affordable means of securing a financially stable and comfortable future. We offer many annuities, and we’ll help you choose the one that will work best for you. Call us today at 417-883-9300, or call us toll-free at 1-877-871-7328.