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What kinds of fees do annuity companies charge?
Most annuity companies charge annual maintenance fees of $25 to $50. Variable annuities have higher expenses than fixed annuities because of their various sub-accounts. These can run 3% or more.
Many companies don’t charge an initial commission, or load, on annuities. Instead, they levy substantial surrender charges of as much as 10% of your principal if you want to cash out or transfer your annuity to another company within the first five or 10 years of the contract. They may permit free withdrawals after the first year that lets you withdraw a certain portion (usually 10%) of the accumulated account value.Annuity surrender charges do not apply to an immediate annuity because you cannot surrender it once you have purchased the contract.Return to Questions
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