Planning for Retirement: Companies That Offer Annuities

In this article...
  • Not all companies that offer annuities are the same. Find out the best way to choose a provider that can accommodate your unique financial and lifestyle needs.

An annuity is a contract between a financial institution and an investor, in which the investor agrees to pay a contractually defined premium in exchange for guaranteed retirement income. With their promise of tax-deferred earnings and a steady income stream during retirement, these plans are a staple in many investors’ portfolios. If you’re thinking about investing in an annuity, it’s important to remember that not all companies that offer annuities are the same. Before signing a contract, always research potential providers to find a reputable company that can accommodate your unique financial needs.

Where Can You Purchase Annuities?

Although annuity contracts must be formally issued by an insurance company, plans may be purchased through many types of financial institutions, including:

  • Brokerage firms
  • Large commercial banks
  • Mutual fund providers
  • Life insurance companies
  • Independent insurance agents or broker-dealers

You may also be able to purchase an annuity through your financial advisor or retirement planning specialist.

How Should You Choose an Annuity Provider?

Selecting the right annuity provider is just as important as choosing the annuity itself, so it’s worth putting in the time to research companies before signing a contract. Here are a few things you might want to consider:

  • Financial strength: Because annuities are long-term investments, it's important to find a company with a stable financial history and a strong outlook for the future. Credit rating agencies, such as AM Best, provide a third-party opinion on the creditworthiness of annuity providers’ financial soundness. You can also determine a company's financial strength by reviewing its quarterly or annual results. For publicly traded companies, these statements may be found on the S. Securities and Exchange Commission's website.

  • Industry reputation: A company's industry reputation tells you a lot about how they do business. Indicators of a good industry reputation can include awards or appearances on “Best of” lists by industry mainstays, such as Forbes or U.S. News & World Report.

  • Customer satisfaction: The company you invest with should have a solid track record for customer satisfaction and resolution of complaints. The Better Business Bureau provides easy-to-access information on a company's customer complaint history, while online consumer review sites can offer insight into a company's customer service policies, timeliness of payments and ability to resolve issues.

  • Selection of plans: The selection of annuities can vary widely by company, so be sure to find a company that offers the type of plan you want. In addition to fixed, variable and indexed annuities, providers may offer a choice of immediate or deferred payments.

  • Fees and other charges: When you’re investing for retirement, you want as much of your money as possible to go toward your investments. To maximize your budget, look for companies that charge reasonable administrative fees.

Companies That Offer Annuities

You can purchase an annuity from many types of financial institutions and independent industry professionals. The following list includes several well-known companies that offer annuities to individual investors:

  • AIG: AIG is a prominent global insurance company that sells various indexed, variable and fixed annuities, many of which offer customization options to satisfy investors' specific needs. The company, which has been in business for more than a century, has a solid financial profile and is rated as stable by industry rating agencies. Plans are available in every U.S. state.

  • Nationwide: This popular life insurance provider sells a wide array of annuity products, and many of its plans have safeguards to protect investors from losses due to market volatility. The company has received D. Power’s award for outstanding customer satisfaction among annuity providers for two consecutive years.

  • Oxford Life: Oxford Life has sold financial products for more than 50 years and has an A (excellent) rating from AM Best for financial strength. Investors can choose from several fixed annuity products, including indexed and guaranteed plans of varying durations.

  • Transamerica: Transamerica specializes in variable annuities, which offer investors a broad selection of investment prospects. Purchasers may also add on living benefits, including an income stream that can’t be outlived.

  • Pacific Life: Pacific Life has been in business for more than 150 years and has won DALBAR awards for exemplary service in several categories. The company offers options for investors with varying financial goals, timelines and risk tolerance, including fixed, variable and fixed indexed annuity products.

  • Mutual of Omaha: Mutual of Omaha’s annuities include plans with flexible contribution and payout options, so investors can choose what works for them. Some plans also offer optional benefits, such as cost-of-living adjustments and income payment advances.

  • Prudential: Prudential employs more than 3,000 financial professionals nationwide, who are available to help consumers select the right investment products. Annuity options include fixed, variable and combination plans, and some options offer daily income growth potential. Certain plans may be customized to meet an investor’s specific needs.

  • New York Life: New York Life is the largest mutual life insurance company in the United States. The company has been in business for more than 165 years and has a reputation for financial stability. Purchases are typically made through local agents rather than online.

What Organizations Insure Annuities?

Because annuities are classified as insurance products, they aren’t insured by the FDIC. However, there is some protection available for account holders. If your annuity's issuing company fails, that state’s guaranty association must cover payouts up to the required limit, which is $250,000 in most places. Amounts above that are considered a loss.

Which Company Is Best for Annuities?

If you’re searching for an annuity provider, there are plenty of reputable companies to choose from, and some boast more than a century of experience in matching investors with the best financial products. Although investors can feel confident trusting many of these companies with their hard-earned money, no two providers are the same. Product offerings, customization options and sales approaches differ from company to company, which can make it difficult to choose a provider.

Ultimately, the best provider is the one that has products and services that satisfy your individual needs and budget. An annuity is a big investment, and taking the time to thoroughly research companies and products can be crucial for your peace of mind. Before signing any contract, make sure to address any questions or concerns that arise with a company representative or a trusted financial advisor, who can guide you through the process. 

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