An annuity is typically part of a retirement investment.
Fixed annuities usually have fewer features and lower fees than variable annuities. Traditional fixed annuities consider contract expenses - such as maintenance and contract fees - at certain times. For example: when the company declares periodic interest rates or determines the payment amount.
Indexed annuities may have higher fees than more traditional fixed annuities.
Variable annuity fees are more complicated. Variable annuities usually have more features and higher fees than fixed annuities.
They may include an annual contract charge.
This covers administrative expenses, a mortality, and expense risk charges.
Also, a variable annuity has fees for managing and operating expenses of the funding options your money is invested in.
For a variable annuity, all important information is explained in the prospectus describing the variable annuity contract.
The prospectus must be given to you when you are considering buying of a contract with after-tax dollars.
Read it carefully before you invest or send money and be sure you understand exactly what the expense charges and fees will be.
For all annuities, surrender charges may also apply.
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