Annuities are a frequent topic in our monthly visits. One question I’m asked regularly is: Which annuity pays the most today? To answer that question, I turned to my annuity expert, Todd Phillips of Phillips Financial Services. Todd scoured the annuity market and prepared the tables that follow.
You won’t find this information elsewhere, because many insurers don’t participate in the aggregation web sites and services that allow comparison shopping. To get all this information, your agent or broker has to ask each insurer what it offers.
We hope to make this a regular feature and to bring you details of some other types of annuities next month.
There are many types of annuities. In the tables we selected three popular types and showed those that pay best for the hypothetical buyers. We highlighted the key features and benefits.
Here’s quick guide to the different annuities shown:
Fixed-Rate, Multi-Year Guarantee Annuities: You deposit a lump sum with the insurer. The insurer credits interest to your account each year. The interest could be higher than the minimum guaranteed rate if the insurer’s investments perform better. You pay a penalty if you want the money back before the surrender period ends.
Single Premium Immediate Annuities: You deposit a lump sum with the insurer, and it immediately begins paying you fixed annual income that is guaranteed to last the period you select. We selected two payment options. The joint life only with 100% survivor covers a married couple and pays the same amount until both spouses pass away. The second option is the same except principal is refunded to beneficiaries if both spouses pass away before the total income payments at least equal their deposit.
Delayed Income Annuities: (also are known as longevity annuities) You deposit a lump sum with an insurer, we assumed at age 65. After five to 10 years (your choice, and it could be longer), the insurer begins paying you a fixed annual amount guaranteed to last for life, regardless of how long you live. We assumed the payments would continue until both spouses pass away. In the second option the principal is refunded to beneficiaries if both spouses die before recovering at least their principal.
Of course, other terms and riders can be added to each of these annuities. If you have questions about these or other annuities, contact Todd Phillips at Phillips Financial Services at 888-892-1102.
FIXED-RATE, MULTI-YEAR GUARANTEE (CD TYPE) ANNUITIES | ||||
Updated July 9, 2014. Assumes $100,000 initially deposited and invested for the surrender and guarantee period. | ||||
Company & Policy | Surrender & Guarantee Period | Guaranteed Rate | Value at End of Period, Start with $100,000 | AM Best Rating |
Sentinel – Personal Choice Annuity 10 | 10 yr | 3.75% | $144,504 | B++ |
Delaware Life – Pinnacle MYGA 10 Year | 10 yr | 3.65% | $143,118 | A- |
Sentinel – Personal Choice Annuity 7 | 7 yr | 3.45% | $126,798 | B++ |
Delaware Life – Pinnacle MYGA 7 Year | 7 yr | 3.35% | $125,943 | A- |
Bankers Life – SPDA Select | 5 yr | 3.25% | $117,341 | B |
Sentinel – Personal Choice Annuity 5 | 5 yr | 3.20% | $117,057 | B++ |
Guggenheim Life – Preserve MYGA 3 | 3 yr | 2.10% | $106,433 | B++ |
Delaware Life – Pinnacle MYGA 3 Year | 3 yr | 2.00% | $106,121 | A- |
Delayed Income Annuities/Longevity Annuities – (Delayed Lifetime Income) | |||||
Updated July 9, 2014. $100,000 deposited initially by a married couple each age 65 with income payments to begin at age indication in second column. | |||||
Payout Terms | Policy Name | Annual Payout | Total Received by age 100 | AM Best Ratings | |
Joint Life Only with 100% Survivor | Income Deferred to Age 70 | American General – American Pathway DIA | $7,523 | $225,690 | A |
New York Life – Guar. Future Income Annuity II | $7,498 | $224,940 | A++ | ||
Lincoln National – Deferred Income Solutions | $7,188 | $215,640 | A+ | ||
Income Deferred to Age 75 | American General – American Pathway DIA | $10,977 | $274,425 | B++ | |
New York Life – Guar. Future Income Annuity II | $10,845 | $271,125 | A+ | ||
Lincoln National – Deferred Income Solutions | $10,418 | $260,450 | A+ | ||
Joint Life with 100% Survivor Cash Refund (principal refunded ) | Income Deferred to Age 70 | New York Life – Guar. Future Income Annuity II | $7,353 | $220,585 | A++ |
American General – American Pathway DIA | $7,336 | $220,080 | A | ||
Symetra Life – Freedom Income | $6,834 | $205,023 | A+ | ||
Income Deferred to Age 75 | New York Life – Guar. Future Income Annuity II | $10,574 | $264,350 | A++ | |
American General – American Pathway DIA | $10,499 | $262,475 | A | ||
Symetra Life – Freedom Income | $9,772 | $244,300 | A+ |
Single Premium Immediate Annuities – (Immediate Lifetime Income) | |||||
Updated July 9, 2014. Assumes $100,000 initially deposited and income payments begin immediately. | |||||
Payout Terms | Age | Company & Policy Name | Annual Payout | Total Received by age 100 | AM Best Ratings |
Joint Life Only with 100% Survivor (payments stop after second death) | 65 Male & Female | Athene Annuity – MaxRetire | $5,631 | $197,070 | B++ |
Nationwide – Income Promise Select | $5,593 | $195,742 | A+ | ||
Penn Mutual – Single Premium Immediate Annuity | $5,511 | $192,868 | A+ | ||
70 Male & Female | Athene Annuity – MaxRetire | $6,271 | $188,130 | B++ | |
Nationwide – Income Promise Select | $6,231 | $186,930 | A+ | ||
Penn Mutual – Single Premium Immediate Annuity | $6,067 | $182,010 | A+ | ||
75 Male & Female | Athene Annuity – MaxRetire | $7,168 | $179,200 | B++ | |
Penn Mutual – Single Premium Immediate Annuity | $6,993 | $174,815 | A+ | ||
ING – SPIA | $6,841 | $171,025 | A+ | ||
Joint Life with 100% Survivor Cash Refund (principal refunded if premature death) | 65 Male & Female | Nationwide – Income Promise Select | $5,498 | $192,430 | A+ |
Integrity Life – IncomeSource | $5,348 | $187,180 | A+ | ||
American General – American Pathway | $5,267 | $184,345 | A | ||
70 Male & Female | Nationwide – Income Promise Select | $6,042 | $181,260 | A+ | |
Integrity Life – IncomeSource | $5,829 | $174,870 | A+ | ||
American General – American Pathway | $5,775 | $173,250 | A | ||
75 Male & Female | Nationwide – Income Promise Select | $6,669 | $166,715 | B++ | |
Integrity Life – IncomeSource | $6,460 | $161,500 | A+ | ||
New York Life – Guaranteed Lifetime Income Annuity II | $6,388 | $159,700 | A++ |
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