How to Review an Annuity You Already Own
Most annuity contracts are sold once and never reviewed again. That is a problem, because the rate environment changes, the owner timeline changes, and riders that were valuable at issue may be either underused or overpaid for a decade later. A review is not a decision - it is the information you need before one.
Reviewing an annuity you already own means gathering four documents and reading five dimensions: cost, surrender position, riders, crediting, and suitability. A review establishes where the contract stands today. It is not a decision to change anything.
Key takeaways
- Four documents contain everything a review needs, and the carrier supplies missing ones.
- The five dimensions are cost, surrender position, riders, crediting, and suitability.
- A review describes the position; it does not recommend a transaction.
- Any proposed change should be a separate conversation, after the written disclosures.
- The Annuity Position Score applies the same framework in about three minutes.
Which documents do you need to review an annuity?
Four: the most recent annual statement, the contract declarations page showing issue date and surrender schedule, any rider forms attached, and the current renewal or crediting notice. The carrier provides missing documents at the owner request.
Everything a review needs lives in these. If a document is missing, the carrier will provide it on request from the contract owner.
- The most recent annual statement
- The contract declarations page, showing issue date and surrender schedule
- Any rider forms attached to the contract
- The current renewal or crediting notice, where applicable
What five things should you check in an annuity review?
Cost, surrender position, riders, crediting, and suitability. Together these five factual reads describe where the contract stands today, rather than what should happen to it next.
An in-force review comes down to five factual reads. Together they describe the contract position - where it stands today, not what should happen to it.
- Cost - every recurring charge, including rider fees, added together
- Surrender position - contract year, remaining schedule, and any market value adjustment
- Riders - what is attached, what it guarantees, and what it charges
- Crediting - the current cap, participation rate, spread, or stated rate versus what is available today
- Suitability - whether the design still matches the timeline and purpose of the money
What questions should you ask once you have the facts?
Is anything being paid for that is not being used? Is anything valuable in force that a change would end? When does full liquidity return? Is the crediting materially behind current terms?
With those five reads in hand, the useful questions become specific. Is anything being paid for that is not being used? Is anything valuable in force that would not survive a change? When does full liquidity return? Is the crediting materially behind current terms, or roughly in line?
Why should a review be separate from any transaction?
A review that arrives attached to a product recommendation is not a review. Understand the position first, in writing, and treat any proposed change as a separate conversation that must justify itself against the disclosures.
A review that arrives attached to a product recommendation is not a review. Understand the position first, in writing, and treat any proposed change as a second and separate conversation that has to justify itself against the disclosures. That sequencing is the single most protective habit an annuity owner can adopt.
What does the Annuity Position Score do?
It applies the same five-dimension framework and returns a 0-100 read on where a contract stands, with the breakdown behind it. It is educational and free, takes about three minutes, and requires no policy number to begin.
The Annuity Position Score applies this same five-dimension framework and returns a 0-100 read on where a contract stands, with the breakdown behind it. It is educational and free, it takes about three minutes, and no policy number is required to begin. It is not a recommendation to buy, sell, surrender, or replace any annuity.
Frequently asked questions
How often should an annuity be reviewed?
Annually is reasonable for most contracts, and specifically at renewal windows, at the end of a surrender period, and whenever the purpose of the money changes.
Do I need my policy number to get a review?
Not to begin. A position read can be produced from contract characteristics - type, issue year, riders, and surrender status. Contract-specific detail refines it.
Is an annuity review the same as being sold a new annuity?
It should not be. A review establishes the position of the contract you own. Any proposed change is a separate decision that should follow the required written disclosures and comparison.