If you’ve spent any time at all online researching annuities, then you have likely run across some annuity marketing websites that all but reach out and grab you by touting that they have the very best annuity rates.
But before you dive in head first with the feeling that you’ve just unwrapped the famous “golden ticket,” there are some important things that you need to know about these “top annuity rates” that you may be reading about.
Beware of Annuity Rate “Bait and Switch”
Unfortunately, there are some questionable marketing tactics that take place in just about any industry – and the insurance and annuity arena is no exception. In fact, advertising a “teaser” (i.e., higher) rate, and then either changing it the following year or not explaining what the high rate is for, is a common tactic that is used far too often by annuity offerors.
As an example, an annuity that is supposedly offering a rate of 6% may have caught your eye – and why wouldn’t it, as this rate is about as rare today on a fixed financial product as seeing a five-legged frog.
The reality in situations like this, though, is that oftentimes, the insurance company will, in fact, pay the 6% rate…but only for the first year of the contract. And after that, the rate will usually drop significantly – typically closer to the 1 or 2% range – locked in for the next four or five years.
But a switcheroo rate change is not the only type of bait and switch tactic that is used today by many annuity companies. Another fairly popular one is oftentimes referred to as “smoke and mirrors.”
This occurs when the insurance company states that you will receive a bonus of 20%, or an 8% roll-up every year – which of course can sound extremely enticing. But here again, what you really find is that it is all basically sizzle and not much steak at all.
How to Really Compare Annuities and their Benefits
Regardless of how an annuity is advertised, the truth is that the only number that really matters in terms of an annuity’s interest and return is how much money you are actually receiving in your account.
But annuities can be pretty complex products. So, how can you determine what an annuity will really be able to provide for you?
One way is to work with an unbiased annuity team like Annuity Gator that digs deep into annuities and how they work, yet in an easy-to-understand manner. Take, for instance, a comparison of the best-fixed annuity rates.
In this case, Annuity Gator can show you an apples-to-apples comparison, sorting out which company offers solid products, and which one(s) you may want to shy away from.
Feel free to check out our massive annuity review database where we go in-depth and sort out the good, the bad, and yes, even the ugly on hundreds of annuities from all of the top insurance carriers.
Want to Know If an Annuity is Even Right for You?
Even if an annuity offers the best and most reliable features in the world, if the product is not right for you, none of it really even matters.
If you’re still wondering whether or not an annuity is really the way to go, or if you would do better by going in a different direction, take our Annuity Quiz. It takes less than 30 seconds, and it’s much easier than sitting down with an insurance agent and going over reams and reams of annuity fine print.
Still Have Questions About Annuity Rates and Payouts?
Annuities have a lot of moving parts. With that in mind, the rate that is offered on an annuity is really just the tip of the iceberg when it comes to determining how the product works, and whether or not a particular annuity product is right or wrong for you and your objectives.
So, if you still have questions about annuity rates or payouts – or about any other annuity-related factor such as riders, bonuses, roll-up rates, and/or any other bell and whistle that you can think of – contact us directly to chat with an annuity specialist today.
We can be reached by phone, toll-free, by calling (888) 440-2468. Or, if you would like to ask your question online, then just simply fill out our secure contact form here. In a world that’s filled with confusing financial jargon, Annuity Gator will make the complex simple.