What charges might be subtracted by the insurance company from the earnings?
The annuity is typically sold as a back-end loaded contract. As such, no fees are deducted at the time of the product’s purchase. If the contract owner purchases a flexible premium annuity, there may be some annual fee for the administration of these small premium amounts. Some might argue that surrender charges can be considered fees. However, surrender charges in an annuity contract are usually limited in their duration and almost always guarantee not to invade principal. This is significantly different from other investments, such as a CD that has a revolving surrender charge or a bond that has asset value fluctuation.
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