Find the best life annuity plans of 2020 and further explore life annuities in greater depth.
Best Life Annuity Plans (2020)
Retirement planning is more critical than ever before due to increased life expectancies. Social Security and Pension schemes are no longer enough to last out an entire post-retirement lifetime. This is the why alternate revenue streams that yield guaranteed income for life after retirement are a good option to consider. One of the best ways to secure a guaranteed income for life are life annuities, also called life insurance annuity and lifetime annuity by some. If you haven't purchased life annuity yet, wait a little more until you read our review of the best life annuity plans in 2020 and then make your choice.
annuity insurance company ratings and specify the best insurance companies for annuities
For your convenience, you will also be able to find information and a brief overview of what annuities are, how they generally work, different types of annuities, definitions, and what needs to be kept in mind while buying annuities.
|Company||AM Best Annuity Rating||Best Annuity Plans||Insuranks Rating|
|Allianz Annuities||A+ (Superior)||Allianz 222 Annuity Core Income |
Allianz Core Income 7 Annuity and its Core Income Benefit rider.
Allianz 360 Annuity with the 360 Benefit rider.
Allianz Essential Income 7 Annuity with the Essential Income Benefit.
Allianz Variable Annuity
Allianz Vision Variable Annuity
Allianz Masterdex X Annuity
Allianz Endurance 15 Annuity
Allianz Endurance Elite Annuity
Allianz Index Advantage Income Variable Annuity
Allianz Masterdex 10 Annuity
Allianz Masterdex 5 Annuity
Allianz Pro v1 Annuity
Allianz Bonus Dex Annuity
Allianz Powerhouse Annuity
Allianz 365i Annuity
Allianz 222 Fixed Index Annuity
|Nationwide Annuity||A+||Nationwide Monument Advisor Variable Annuity |
Nationwide Medicaid Annuity
|Metlife Annuity and its partner companies: Brighthouse Annuities and Metropolitan Life Insurance Company Annuity ||A+||Metlife Variable Annuity |
Metlife Retirement Annuity
Metlife TSP Annuity
Metlife Shield Annuity
|MassMutual Annuity||A++ (highest rated!)||MassMutual RetireEase |
MassMutual Variable Annuity
MassMutual Fixed Index Annuity
MassMutual Index Horizons Annuity
|New York Life Annuities||A++ (highest rated!) ||New York Guaranteed Future Income Annuity |
New York Life Variable Annuities (all)
New York Life Fixed Annuity
New York Life Clear Income Fixed Annuity
New York Life Guaranteed Lifetime Income Annuity
New York Life Premier Variable Annuity
New York Life Immediate Annuity
New York Life Flexible Premium Variable Annuity
New York Life Deferred Income Annuity
New York Life Secure Term Fixed Annuity IV
New York Life Future Mutual Income Annuity
Guaranteed Lifetime Income Annuity II
|Riversource Annuities ||A+||Riversource Flexible Annuity |
Riversource Variable Annuities
|Fidelity Annuity ||A-||Fidelity Fixed Annuity |
Fidelity Variable Annuities: Fidelity Personal Retirement Annuity
Fidelity Deferred Income Annuity
|Reliance Standard Annuity ||A+||Reliance Standard Eleos MVA SPDA - Single Premium Deferred Annuity || |
|Mutual of Omaha Annuity ||A+||Mutual of Omaha Ultra-Premier Annuity |
Instant Access Annuity
Bonus Flexible Annuity
|Great American Annuity ||A+||Commodore Advantage |
American Landmark 5 Plus
Index Summit 6
|AIG||A||AIG Polaris Variable Annuity |
AIG Indexed Annuity
AIG Fixed Index Annuity
|Symetra Annuity||A||Symetra Advantage Income Immediate Annuity |
Symetra Trek Annuity
Symetra Fixed Annuity
|American Equity Annuity ||A- (excellent)||American Equity Incomeshield 10 |
American Equity Destionations 10
American Equity Assetshield 10
|Americo Financial Life and Annuity Insurance Company ||A (excellent, 3rd of 15)||Platinum Provider |
Future Provider Series
* AM Best Annuity Rating is based on the financial health of the company, and there is a total of 16 possible ratings that can be given. The highest possible rating is A++. Each of the companies listed here have an excellent rating or better than that.
There are many investors who want to know which are the best annuities in each category. Categories refer to the types of annuity plans that are available in the market today, in 2020.
The best guaranteed income annuity companies for fixed income annuity plans in 2020 and best annuities for lifetime income are:
|Annuity Type||Brand||AM Best Annuity Rating||Features|
|Lincoln Fixed Annuity (Single Life)||Lincoln MYGuarantee Plus||A+||1.05% APY for first 5 years, Withdrawal Allowance, Death Benefits, Tax-Deferred Savings|
|Lincoln Fixed Annuity (Joint Life)||Lincoln Lifetime Income Advantage 2.0||A+||4.5% Guaranteed lifetime income at 65 years of age, principal protection, tax-deferred, death benefits, nursing home enhancement from 70+|
|Principal Income Annuity||Principal Financial Annuity||A+||Tax-deferred, inflation protection, death benefits, principal protection, limited withdrawals|
|GlobalAtlantic and Forethought Fixed Annuity: |
Global Atlantic Forecare
|Global Atlantic/Forethought Annuity ||A||No annual fees. |
ForeIncome II has a guaranteed lifetime withdrawal fees of 1% only.
SecureFore starts from $10,000 initial premium and ForeIncome II starts from $25,000.
ForeCare offers 2-3x contract value for qualified long term care expenses
The best annuities for flexibility and income are:
|Annuity Plan Types||Brand||AM Best Annuity Rating||Features|
|ForeIncome II Advisory - Fixed Indexed Single Life||Global Atlantic Forethought annuity (merged brands: Forethought Life Insurance Company Annuities and Global Atlantic)||A||Withdrawal base growth guaranteed at 8% roll-up every year, interest crediting option, tax deferment, protection against market losses|
|Athene Indexed Annuity Single Life||Athene Ascent Pro 10 Bonus||A||Athene annuity death benefit, guaranteed growth, Interest Credits, Premium Bonus, Free Withdrawals, Bailout feature, Terminal Illness and Confinement waivers|
|American Equity Fixed Index Annuity Single Life||American Equity IncomeShield 10||A-||Liquidity, Principal Protection, Guaranteed income, tax-deferred growth, may avoid probate|
|Lincoln Financial Fixed Indexed Annuity Joint Life||Lincoln Optichoice 9||A+||Set Interest Rate for 1 year, Interest tied to performance of S&P 500, base interest rate credit, surrender charge|
For a fixed-indexed annuity plan that offers the best chances of high potential annual income, the following are the best deals:
|Annuity Type||Brand||AM Best Annuity Rating||Features|
|Symetra Fixed Indexed Annuity||Symetra Advisory Income Edge||A||Guaranteed Lifetime Withdrawal Benefit even if withdrawals have reached zero, growth-based interest, credited interest, tax deferred, limited withdrawal, contract cancellation with surrender charges, death benefits, protection against market losses, free-look period|
|American General Annuity – Fixed Indexed Single Life||Power Index Plus Income||A||Guaranteed living benefit, growth potential, principal protection, interest credit|
Best Variable Annuity for Minimum Guaranteed Annual Income in 2020
If you’re looking for an annuity plan that offers the potential for higher annuity payouts based on the performance of invested assets, then these ones are the best:
|Annuity Type||Brand||AM Best Annuity Rating||Features|
|Prudential Premier Retirement Variable Annuity Single Life||Prudential Premier Retirement||A+||Highest daily lifetime income, Protection against market losses, high growth potential, crediting strategies|
|Transamerica Variable Annuity Single Life||Transamerica Principium III||A+||Investment options, Automatic Asset Rebalancing, Dollar cost averaging, transfers, Annuitization after 3rd policy anniversary|
|Lincoln Variable Annuity||Lincoln ChoicePlus||A+||Options for Growth Potential, Guaranteed Income for Life, Tax Deferral, Optional Benefits, Flexibility of Choosing Risk Level, Death Benefits|
Life annuities (also known as lifetime annuities or simply annuities) are financial contracts between the buyer (called the annuitant) and an insurance company, where the buyer will be paid a guaranteed income for life - either the rest of their lives or for a fixed period of time, depending on the type of plan purchased. Annuities are mainly used as an income stream for retirees.
At the end of the day, such an investment allows a person to create an income stream even after they retire.
A cash refund annuity is an amount that the beneficiary receives if the annuitant passed away ahead of getting back payments for their premium investment. It mostly depends on annuity type.
An installment refund annuity is an optional annuity refund that provides the annuitant's beneficiaries a minimum annuity payout amount when the annuitant has passed away.
The difference between life insurance and annuities is simple. While both are long-term financial plans and have death benefits, annuities are protection against longevity (an income stream for the remainder of a person’s life after retirement), while life insurance is a protection for the buyer’s dependents against an untimely death. Life annuity and insurance complete each other rather than compete with each other.
* Annuity death benefit is a guarantee by the insurance company that if the annuity owner passes away before the end of the contract term, his or her beneficiary will receive at least the money paid until then.
After the 2008 financial crises, many investors switched to annuities as a guaranteed income source after retirement. Since then, annuity sales have boomed, reaching their highest levels in 2019. This is because annuities offer their buyers the guarantee of a steady income after retirement, a guarantee that other types of investments cannot match.
Another benefit of buying an annuity plan is the savings on taxes. May investors end up maxing out their 401(k) and IRA tax shelters. This is where annuities can help. Investors can use their annuities to get further tax-deferment.
And finally, since annuities offer investors a guaranteed income, investors can look at more aggressive strategies for the other assets in their portfolio.
Depending on the type of annuity plan, premiums can either be paid in a lumpsum or over a period of time (as would be done for other types of insurance premiums). The good news is that annuity plan buyers do not need to pay premiums indefinitely. Once the contracted amount is paid in the form of premiums, buyers can either start getting their annuity payouts, or they can defer their annuity payouts for a later date.
The time during which a person has to pay premiums is called the accumulation phase. And once those premiums have been paid in full, the annuity payout phase will begin.
The annuity payouts that an annuitant gets is a mix of the principal amount paid, as well as the interest accrued on that amount.
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One of the reasons why annuities are so popular as a retirement option is their annuity payout flexibility. Annuity plans can be customized to fit any retiree’s needs or requirements. So, a person can choose to get paid a single lumpsum, for a fixed period of time, or even for the rest of their lives.
Buyers can also choose to end payments in the event of their death, or ask for payments to be continued for their heirs after they pass away – for a period of time, at least. This is what is called term certain annuity. It means that an annuitant gets his or her annuity payouts for the rest of their lives, but if they pass away within a certain period of time (say, 10 years from the time the annuity payouts start), then their dependents (or heirs) will continued to be paid that annuity for a specific amount of time. All of these conditions need to be laid out when the plan is being purchased.
Annuity payout amounts are dependent on the annuitant’s life expectancy. So, if the investor has a high life expectancy, then he or she will be paid smaller sums over that period. Because of this, investors should think carefully about when they would like to start getting their annuity payouts.
Annuity payouts can be structured to be paid out monthly, quarterly, annually, or even as a complete lumpsum. Annuity payouts can begin as soon as the premium payment is completed, or be delayed by as much as several decades. As said before, flexibility!
Like any product, there are pros and cons to life annuities, and it is best to be aware of the downside of any product before you invest in it.
One of the biggest issues with life annuity plans is that they cannot be changed once purchased. All the terms of the annuity plan need to be clearly set before its purchase. There is no way to liquidate or even change the plan once it has been bought.
So, for example, if a person buys and annuity plan when the interest rates are low, later, when the rates go up, the annuitant will not be able to change his or her plan to a better interest rate.
Nothing in life is certain, least of all how long a person will live. So, it is possible that someone buys a life annuity plan for $100,000, but just 6 months later, they die. All that money that person invested in his life annuity will go to waste. However, the good thing is that there is a workaround for this – which we will discuss later.
It is important to understand the factors that impact the annuity payout before investing in an annuity plan.
The rate of interest that was offered at time a person bought their plan will impact the annuity payout amount. Therefore, it is best to wait for interest rates to be at their highest before purchasing annuities.
Life expectancy is calculated based on many factors – the annuitant’s age when the annuity payout is to start, their health condition, gender and so on. In fact, the gender of a person has a significant impact on the annuity payout amount. This is because, statistically speaking, women are expected to live longer than men. And because of this, female annuitants are given lower annuity payouts than male annuitants.
If an annuitant has poor health and has a lower life expectancy, this will impact the annuity payout amount. However, if this is the case, then the annuitant can discuss the possibility of a special income quote called impaired annuity.
The type of plan an annuitant chooses will also impact the annuity payout amount. For example, if the buyer has opted for a straightforward fixed annuity with no frills, then the annuity payout will be a combination of the interest and the principal. However, if the buyer opts for a variable annuity, then, while the principal remains the same, the annuity payout and the amount of the return on investment will depend on market conditions.
Many buyers get put off because of the sheer range of the types of annuities and their permutations and combinations that are offered by insurance companies today. And while we may not be able to cover each of the types and add-ons in detail in this review, we can help our readers by giving them a clearer picture about this subject.
Income annuity is a contract that pays out income once the annuity has started. From the moment it is being paid for it is instantly annuitized. Income annuity payments might change at some points, since its income units can be either variable or fixed annuity investments.
Annuities are either fixed or variable. And each of these types have more sub-types.
Fixed annuities are the simplest and most straightforward. With fixed annuities, the annuitant is guaranteed an interest rate for a predetermined amount of time and the principal is protected. At the time of purchasing a fixed annuity, the annuitant has the choice of three annuity payout options:
When interest rates are high, or markets are showing a downward trend, then fixed annuities are the best type to purchase. The best fixed annuity of 2020 is Allianz Fixed Annuity.
In Variable annuities, your premium is invested in a range of assets such as stocks, bonds and other money market instruments. These instruments are usually only available to the insurers.
Therefore, if an annuitant purchases a variable annuity plan, then there is no guaranteed interest rate on annuity payouts. The annuitant will be paid out the returns on investments made.
There is an upside as well as downside to this kind of an annuity. If the assets in the annuitant’s portfolio have done well, the annuity payouts could be quite high (but capped at a certain limit). However, if the market slumps, then the annuity payouts could be much lower. The silver lining here is that whatever be the case, the principal of the annuity is protected at all times.
Here are the two types of purely fixed annuities:
This type of annuity actually looks like a hybrid of a fixed and variable annuity. The purchaser is guaranteed a minimum return, but can also get more than that if the market performs well. This is because this annuity is usually based on global indices such as the S&P 500. The best fixed index annuities of 2020 are Allianz Fixed Index Annuity plans. Worths mentioning: Global Atlantic ForeAccumulation, a Global Atlantic Fixed Index Annuity.
This type of annuity has two benefits:
Straight life annuity, also called straight life policy, is an annuity that pays the annuitants until their death.
The rest of the annuities that we will talk about can be fixed or variable:
Pure annuity is an annuity that provides income throughout periods in the life of the annuitant. Pure annuity continues until the death of the annuitant. Pure annuity's premiums are accumulated and produce interests. When the annuitant matures, he or she is permitted to start getting annuity payouts and benefits.
With an immediate annuity plan, the annuitant starts getting an income as soon as the premium is paid in full. Such plans are usually purchased closer to retirement.
In a deferred annuity policy, the annuity payouts can be deferred to a later date. This date can be just a few months or as much as a few decades. Immediate annuities are always a good option to consider.
The best deferred annuity of 2020 is Principal Select Series Annuity, a single premium deferred annuity with market value adjustment and a 3 to 9 years of guaranteed period.
QLAC, which is also known as Qualified Longevity Annuity Contract, is another types of deferred annuity policy, where the annuitant pays a lump sum to the insurance company, and at a date that was determined in the beginning, the annuitant gets paid back a certain amount per month on a guaranteed basis for the rest of the lives of the annuitant and their spouse (whoever lives longer).
Massmutual RetireEase is 2020's best Qualified Longevity Annuity Contract. MassMutual RetireEase can be set as a QLAC when the contract is being issued, and enjoys the benefits of all of MassMutual annuities, with A++ (1st of 15) AM Best rating, flexibility, customization options and all the rest of their great perks outlined in this review.
Advanced life deferred annuity, or ALDA in short, also known as longevity insurance, is a long term deferred annuity which pays out a guaranteed lifetime income in an advanced age. How advance? 75-80 minimum. This lets you have a lot more guaranteed income at age 80-85 than you would normally have.
Annuity certain is an annuity investment that provides a minimum amount of guaranteed payments. Annuity certain proceeds throughout the annuitant's life, even in the event that the annuitant lives longer than the amount of payments that are detailed in the annuity certain contract. If the annuitant passes away prior to reaching the minimum number of guaranteed payments, a beneficiary that he or she specified receive the amount of payments left in the contract.
Lifetime annuity, as the name suggest, is when the annuity payout continues until the annuitant dies. The annuitant has the choice of buying a single life annuity and a joint life annuity.
In Fixed Period annuities, as the name suggests, you get an annuity payout for a fixed period of time, usually for 10 years.
A qualified annuity is funded using pre-tax dollars and can be funded with an annuitant’s retirement plan such as IRA or 401(k). However, with this plan, all annuity payouts will be taxed at normal rates.
A non-qualified annuity is funded using after-tax dollars. What this means that the principal paid out will not be taxed, but the earnings will. To figure out how much of the annuity payout is from the principal and how much is from earnings, the insurance company uses a method called exclusion ratio.
In the Single Premium Annuity (also called Single Purchase Annuity), the annuitant is required to pay a single lumpsum premium. After that, they have the choice of a Single Payment Deferred Annuity or a Single Premium Immediate Annuity.
The Flexible Premium Annuity is where premiums are paid in installments and are only applicable to deferred annuities.
AM Best rating: B++ (Good)
Equitrust IRA (Individual Retirement Plan) is considered a good option overall. EquiTrust Life Insurance Company was founded back in 1966. In 2015, basketball legend Magic Johnson acquired EquiTrust life insurance and became its main shareholder. Other than life insurance, EquiTrust offers fixed annuities, immediate annuities and fixed indexed annuities.
EquiTrust annuity commissions: Equitrust's annuities do not charge annual fees. It does, however, their MarketTen Bonus Index annuity charges a 1% optional income rider fee per year.
In the years 2 to 10, 1.5% to 10% annuity value withdrawal per year is allowed, given that you are 50 years old or older.
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Here are some of the things you should be kept in mind while purchasing an annuity plan:
Summing it up!
Annuities are not an easy topic to address. This is because they can be customized in so many different ways that it can get very confusing for you as an annuitant. Which is why it is advisable to shop around and see which annuity plans offer the best interest rates, lowest costs, highest returns on investment and so on.
It is important to take the time and understand all the options available in the market before finally selecting the plan that suits your needs best.
Come back and share your experience through reviews of the company you decided to go for!
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Ann Hody Insuranker
Policy Type: Life Insurance
Company name: Allianz Insurance
option did not give me choice of LTC. But.... this is an example of how they treat long time customers. NO ETHICS! HORRIBLE ... HORRIBLE COMPANY. We bought a good long term care police early. We were in our early 40's and bought in October 1999. They stopped selling long term care insurance in December 1999. NOW... after all these years of faithfully paying our annual amounts I just received a letter, and they are raising our annual amounts by 300% from the original. REALLY... they are only supposed to be able to raise if it is across the board... A.K.A. everyone.... really... we were in our early 40's how many policies do you really think they have in addition to ours. Let's see.... take your money for years... then raise it so much when there are so few left you want to cancel. Is that ethical? NO... dishonest YES... do NOT trust this company. PERIOD!!! DISHONEST, LIERS AND COMPLETELY HORRIBLE. Will I renew, do not know, wating on answer from Insurance board and attorney general. Do not think what they have doen is legal. CROOKS
I found Bestow much better than their offers
Not recommended I found better rates with Ladder through this site!
Very spammy agency... better go with another life insurance agency
Beware of their aggressive marketing.. they never stop calling! Better compare quotes here and go with a better provider!