Cancel Preloader

Bells, whistles, and riders on annuities 📌 (Video 4 of 4 in this series)

✅ We’ve talked a lot about annuities in my four-part series, but today I wanted to wrap it up with something that’s really important but often forgotten, all of the riders you can get on these annuity insurance contracts. 

✅ I call them bells and whistles, and you can think of riders as the upgrades or options when you buy a car. Sure, you can add them on, and they’ll ensure you have a better ride, but they come at a cost.

✅ So, remember we have two types of annuities:

Deferred

Lifetime or income annuities

Let’s take a look at the riders on both and what you should consider.

✅ Deferred annuity riders:

1.         Lifetime income rider – these allow you to generate income for the rest of your life.

2.         Caps on growth or bonuses 

✅ Lifetime income annuity riders:

1.         Cash refund – if you die shortly after getting the annuity, the remaining balance goes to your beneficiaries instead of being surrendered to the insurance company.

2.         Guarantee payoff for a period of time

*I recommend taking out both of these riders if you have heirs or loved ones you want to leave them something if you pass.

3.         Inflation rider – daily benefits increase on a fixed schedule.

✅ What else should you think about when purchasing an annuity?

  • Take a hard look at the financial strength of insurance company. You want them to be around for 20 or 30 years, and this is a long-term relationship so opt for a stable, strong company. 
  • Also, consider the surrender charged period, which usually come in 5, 7, or 10 years or more. I recommend an annuity with a 7- or 10-year surrender charge period but not longer.
  • What is the cap of that company? With a stronger company, you’ll get less deferment of interest, and the opposite is true. 
  • And when opting for a lifetime income annuity, think about the max payment and the financial strength of the company as well. 

✅ Contact me any time at Matthewsfinancial@gmail.com if you have questions or need help!