What costs are associated with tax-deferred variable annuities?
Annual annuity charge – The annual fee insurers charge for administering the contract and guaranteeing* its lifetime income option. This can also include a fee related to administering the annuity. Surrender Charges – The charge many annuity issuers assess for taking withdrawals before the end of the contract. Investment Management Fees – The cost of professional money management of the annuity investment options. Additional Benefit Fees – Some tax-deferred annuities offer additional benefits on their contracts. There are generally two types: living benefits and death benefits. Living benefits are designed to protect the owners during their lives, whereas death benefits are designed to protect the heirs. There are specific fees related to each and their costs may be included in the annual annuity charge.
