In order to choose the best annuity provider, you first have to identify the insurance companies, brokerage firms and mutual funds that sell this type of investment vehicle. Once you have a list of the companies that sell annuities, you can then narrow down the choices by reviewing the types offered, fees and expenses for buying and maintain the annuity, check the rating of annuities offered and find out the death benefit policy the annuity provider allows.
You will probably find that insurance companies offer the most annuity options. While this allows you to choose from the four general types of annuities, insurance companies often have higher fees and expenses, and more stringent rules of managing and selling the annuity. You should still compare insurance companies as an annuity provider right along with the other two types of companies.
The two primary types of annuities are immediate and deferred annuities. Under each primary category, there are several sub-categories of annuities. Gather all of this information from the annuity provider, so you can determine which type of annuity best fits your purpose for investing in an annuity in the first place.
Next, you should consider all of the fees, charges and expenses the annuity provider charges for buying, maintaining and selling the annuity. You should include all charges, such as commissions and the expenses and fees for buying the annuity. Some experts recommend that you should try to avoid an annuity provider that charges more than two percent.
A.M. Best and Fitch Ratings are two companies that give ratings to specific annuities. If you narrow down the choice by the specific annuity you want to buy, then you can narrow it down to the annuity provider that sells the annuity you want to buy. The higher the rating is, the better performing the annuity is. Each rating company has its own rating system, so you will need to see how they rate annuities to see which one rates the best for you.
Finally, you should check on the death benefit the annuity provider offers. A death benefit passes the annuity payments along to your spouse, but only if you die before the annuity payments are due to begin. You may want choose an annuity provider that allows you to pay an extra fee to move up the time frame on the death benefit policy.