With so many annuity companies in the marketplace today, narrowing down just one or two can be somewhat overwhelming. But there are strategies that can help you reduce the amount of time you spend researching and still come away with the important information that you need for crossing the company off your list, or moving forward with the purchase of an annuity.
Factors to Consider When Comparing Annuity Companies
There are actually several key factors to consider when you are comparing annuity companies. These include its:
- Financial strength and stability
- Claims-paying ability and reputation
- Longevity in the industry
- Product offerings
- Ratings from the Better Business Bureau and the insurer ratings agencies
- Customer reviews
It can also help to ensure that you’re getting your information from objective, non-biased sources. For example, it is likely that the company’s website will highlight the positives, without making too much ado regarding any negatives.
Best Annuity Companies in 2020
Although there are hundreds of insurers that offer annuities, some of the best annuity companies in 2020 include the following:
American International Group – better known as AIG – is a large finance and insurance corporation with operations in more than 80 different countries. Headquartered in New York, AIG has offices around the world, and it serves approximately 87% of the Fortune Global 500 and 83% of the Forbes 2000. In fact, according to AIG’s website, nearly 2.5 million people trust this company and its subsidiaries to help them prepare for retirement.
While AIG had some challenges during the 2008 recession – and was even bailed out by the government to the tune of over $200 billion – the company has since repaid all of these funds and has essentially rebuilt itself into a financial and insurance powerhouse.
AIG holds high ratings from the insurance rating agencies, including a(n):
- A+ from Standard & Poor’s
- A2 from Moody’s Investor Services
- A from A.M. Best
- A+ from Fitch
Allianz has long been considered a strong and stable financial and insurance industry leader. Originally founded in 1896, Allianz has established a long track record of keeping its promises – which is why the company has amassed more than 12 million customers.
Being a provider of both annuities and life insurance, the company has the experience and the ability to help its clients prepare for retirement, as well as for many of life’s financial uncertainties.
As of early 2020, Allianz boasts a $119 billion portfolio – most of which consists of investment-grade securities. The company’s extensive, in-house capabilities allow it to monitor and control risk in real-time.
Allianz has earned very respectable ratings from the insurer rating agencies, including a(n):
- AA (Very Strong) from Standard & Poor’s
- A1 from Moody’s Investors Service, and
- A+ (Superior) from A.M. Best
American Equity Investment Life Insurance Company
Through its headquarters in Des Moines, Iowa, American Equity Investment Life Holding Company and its subsidiaries specialize in the sale of fixed index and fixed-rate annuities. In fact, American Equity Life Insurance Company’s mission is “to become the premier insurance company specializing in retirement savings and income products.”
American Equity Investment Life actually offers a variety of different annuities, including:
- Fixed Index
This insurer has earned an A- (excellent) rating from A.M. Best, an A- from Standard & Poor’s, and an A- rating from Fitch Ratings.
AXA has been providing stability and reliability to its clients since 1859. The products that are offered through AXA allows investors to live with confidence and peace of mind, and can enable them to grow and protect wealth, as well as to leave a legacy.
The company is the world’s second largest financial services provider, based on revenue (just behind Berkshire Hathaway), which stands at more than $147 billion for 2018, and a market cap of over $63.5 billion. AXA is also listed on the Global 2000 list for 2019, and holds the positions of #33 for sales, #382 for profit, #28 for assets, and #164 for market value.
This insurer is an affiliate of AXA Equitable Holdings, Inc., a company that began trading on the New York Stock Exchange in May 2018. The company is considered strong and stable financially, and in turn, has earned high ratings from the insurer ratings agencies, including a(n):
- A (Excellent) from A.M. Best Company
- A2 (Good) from Moody’s
- A+ (Strong) from S&P
Jackson National Life Insurance Company has been in operation since 1961. While it began as a small family-owned business, over time the company has grown into a multi-billion dollar organization.
As one of America’s top annuity providers, Jackson is leading the charge to educate Americans about the importance of reliable retirement income, and to ensure the value of annuities is a foundational component of retirement planning.
Out of the 50 largest individual U.S. life insurance companies (ranked by total statutory assets), Jackson ranks as the:
- 7th largest U.S. life insurance company ranked by total statutory assets
- 15th largest U.S. life insurance company ranked by general account assets
- 21st largest U.S. life insurance company ranked by statutory surplus asset valuation reserve and interest maintenance reserve
Based on the company’s financial strength and stability, along with its positive reputation for paying out its policyholders’ claims, Jackson has earned high ratings from the insurer rating agencies. These include a(n):
- A (Excellent) from A.M. Best
- A+ (Strong) from Fitch Ratings
- A+ (Strong) from Standard & Poor’s
- A1 (Good) from Moody’s Investor Service
Just a few of the other accolades that define Jackson include its ranking as:
- #1 seller of annuities in the U.S. during 2019
- #1 in variable annuity sales in the U.S. during 2019
- 7th largest seller of fixed index annuities in the U.S. during 2019
Lincoln Financial Group
Lincoln Financial Group was originally founded in 1905, with the endorsement of Abraham Lincoln’s son, Robert Todd Lincoln. For more than 115 years, Lincoln has stuck with honest values and dependable service so its clients can better achieve their short and long-term wealth enhancement and protection goals.
Today, Lincoln National Corporation operates as the parent company for numerous affiliates, which includes Lincoln National Life Insurance Company. As of year-end 2019, Lincoln National was ranked as the fourth largest life and health insurer, with more than $16.4 billion in (2018) revenue.
The company has also achieved other accolades, too, including:
- #1 in variable universal life insurance sales
- #2 in universal life insurance sales
- #4 in term life insurance sales
- #1 in total life insurance sales
- #5 in 401(b) employer-sponsored retirement plan market assets
- #3 in healthcare segment assets
- #9 in 401(k) market assets
- #2 in variable annuity sales
- #6 in fixed indexed annuity sales
- #8 in total fixed annuity sales
- #3 in total annuity sales
- #5 in long-term disability
- #3 in short-term disability
- #7 in total employee-paid coverage
Due in large part to its financial strength and good reputation for paying out policyholders’ claims, Lincoln National Life Insurance Company has also earned some impressive financial strength ratings, including a(n):
- A+ from A.M. Best
- A+ from Fitch Ratings
- A1 from Moody’s Investor Service
- AA- from Standard & Poor’s
MassMutual Financial Group
MassMutual (Massachusetts Mutual Life Insurance Company) has nearly 170 years of experience under its belt in the wealth preservation and protection arena. As of year-end 2018, the company had roughly $255 billion in total assets. Headquartered in Springfield, Massachusetts, MassMutual is considered to be one of the leading mutual life insurance companies in the world.
In early 2020, MassMutual approved a $1.7 billion estimated dividend payout for later in the year to be received by its eligible policyholders. While dividends are never guaranteed, MassMutual has regularly paid them out over the past century!
Rated highly by all of the major insurer ratings agencies, MassMutual is considered to be strong and stable, and it has a good reputation for paying out claims to its policyholders.
With more than 145 years of experience in the insurance and financial services arena, MetLife possesses a strong and stable presence in terms of financial stability and reputation for serving its clients. The company is a leading innovator and a recognized leader in protection planning, as well as retirement and savings solutions around the globe.
Today, MetLife has a strong presence in nearly 50 countries – and the company continues to grow via expansion of its product lines, as well as through mergers and acquisitions. MetLife currently serves approximately 100 million customers worldwide, and its products are trusted by more than 90 of the top 100 Fortune 500 companies in the United States.
MetLife is a leading provider of institutional income annuities, and it was the first company to introduce longevity insurance into the marketplace back in 2004. This helps MetLife to be uniquely positioned to offer a wide range of benefits to plan sponsors and participants, such as:
- Consistent Income – This allows individuals to create a guaranteed income stream that is payable later in life, when other retirement income sources may run out.
- Flexibility – This provides individuals with an opportunity to use qualified plan money to buy a QLAC with an income payment start date that works best for them
- Protection – This helps individuals to navigate longevity risk by providing income that lasts for a lifetime.
- Security – Security allows individuals to better manage their retirement portfolios and future – knowing how much income they will receive at their selected income payment start date.
Nationwide Life and Annuity Insurance Company
Nationwide has a history of strength that has lasted for more than 90 years, and today it is one of the largest insurance and financial services companies in the world. The company specializes in annuities, as well as mutual funds, retirement plans, and life insurance coverage for both individuals and companies.
There are numerous Nationwide affiliate companies, too, throughout the United States, including those that specialize in property and casualty insurance, life insurance, financial services, and strategic investments.
Nationwide Life and Annuity Insurance Company has high ratings from the insurer ratings agencies, including a(n):
- A+ from A.M. Best Company
- A+ from S&P
- A1 from Moody’s
Nationwide does a fair amount of television advertising, so the company is familiar to many people. You may have even found yourself humming its now-famous jingle, “Nationwide is on Your Side.”
New York Life
For 175 years, New York Life Insurance Company has been helping individuals, families, and business owners build and protect wealth. Today, the company is the Number One largest mutual insurance company in the United States, ending the 2019 years with more than $27 billion in surplus and asset valuation reserve.
New York Life is known for paying dividends to its policyholders (although dividends are never guaranteed). In just 2019 alone, the company paid roughly $11.5 billion in both dividends and policy owner benefits. That same year, New York Life brought in more than $13 billion in just annuity sales alone.
Due in large part to the company’s strong and stable financial footing, it has received among the highest ratings, including a(n):
- A++ from A.M. Best
- AAA from Fitch Ratings
- Aaa from Moody’s Investor Services
- AA+ from Standard & Poor’s
The company is also rated with an A+ from the Better Business Bureau, and it has a score of 770 from J.D. Power & Associates.
Pacific Life has been helping clients to grow and protect wealth for nearly a century and a half. Throughout the years, this insurer has grown and expanded, both in terms of client base and assets under management.
Headquartered in Newport Beach, California, Pacific Life Insurance Company is considered to be a strong, financially stable insurer. As of mid-2020, the company held roughly $171 billion in assets, and had in excess of $1.1 trillion (with a T) of life insurance in-force. (This is based on the company’s more than 853,000 policyholders).
In just the year 2019 alone, Pacific Life paid out $2.7 billion in benefits. So, the company has definitely been there when its policyholders – and their families – needed it. Due in large part to its financial strength and claims-paying ability, Pacific Life has earned some of the top ratings, including a(n):
- AA- from Standard & Poor’s
- A+ from A.M. Best
- AA- from Fitch Ratings
- A1 from Moody’s Investors Services
For more than 140 years, Prudential Financial has helped individual and institutional customers with growing and protecting their wealth. The company is recognized as a trusted brand, as well as one of the world’s most admired companies.
As of year-end 2019, Prudential Financial held more than $1.5 trillion in assets under management and had approximately $4 trillion of gross life insurance in force around the globe.
Today, the company serves customers in more than 40 countries. Prudential was recently named to Forbes magazine’s 2019 list of companies that “Change the World.” It was also ranked 1st in the “Insurance: Life and Health” category of Fortune magazine’s 2019 list of “World’s Most Admired Companies,” and 1st in the Insurance category of Forbes and JUST Capital’s 2018 JUST 100 list.
Prudential is considered to be the largest life insurer in the United States (which encompasses life and health insurance combined), based on total admitted assets.
More information on Prudential Financial can be found here
TIAA (formerly TIAA-CREF)
Ever since the company was founded more than a century ago, TIAA has been on a mission to help its customers reach their financial goals. The company has primarily served the retirement needs of those who work in the medical, academic, cultural, and research fields, and today TIAA boasts more than 5 million customers.
The company is the largest manager of qualified plan stable value assets with approximately $171.1 billion in stable value accumulation values. The company is also the #1 non-for-profit retirement market provider in assets and participant accounts. In 2018 alone, TIAA paid more than $5 billion to retired clients – which includes more than 33,000 annuitants over the age of 90.
TIAA is considered to be strong and stable financially, and able to pay out its policyholders’ claims. As of year-end 2019, TIAA holds more than $1.1 trillion in assets under management (with holdings in more than 50 countries). And, since its founding, TIAA has paid out more than $459 billion in benefits.
In late 2019, TIAA maintains the following ratings:
- A++ from A.M. Best
- AAA from Fitch
- AA+ from S&P
- Aa1 from Moody’s
Transamerica has been in the business of helping its clients to grow and protect wealth since 1904. Founded in San Francisco, the company grew and expanded quickly – even in the early years of financial turmoil in the United States.
In 1999, Transamerica was acquired by the Aegon Group, one of the world’s leading providers of life insurance, pensions, and asset management. Aegon’s 25,000 employees support more than 29 million customers around the globe.
As of year-end 2019, total assets equaled more than $130 billion, with a total capital surplus of nearly $7.5 billion. The company has nearly $42 billion of invested assets. So, all told, Transamerica is considered strong and stable from a financial standpoint.
Transamerica Life Insurance Company, which is headquartered in Cedar Rapids, Iowa, is Transamerica’s insurance arm, and is a strong contender in the insurance and annuity arena. The company has received high ratings from the insurer rating agencies, including a(n):
- A from A.M. Best
- A+ from Fitch
- A1 from Moody’s Investor Services
- A+ from S&P Global
Still Have Questions About Comparing Annuity Companies?
There are many factors to consider when comparing annuity companies. So, it can oftentimes help to chat with an objective annuity specialist before you move forward with the purchase of an annuity.
At Annuity Gator, our primary focus is on educating consumers (and financial professionals) regarding annuities, how they work, and how they may or may not be right, based on an individual’s objectives, risk tolerance, and time frame.
If you’d like to set up a time to talk, feel free to reach out to us via phone or email. We can be reached by calling (888) 440-2468, as well as through our secure online contact form. We look forward to hearing from you.