Hopefully, you are now a little more knowledgeable when it comes to the different types of annuities. Next up? Learning all about the fees that are associated with annuities.
Regardless if you buy a variable annuity or fixed annuity, there are different fees charged on these different types of annuities. How are they determined? Well, it comes down to the purpose of the contract terms that you agreed to when you signed the contract.
“Generally, variable annuities include an underlying investment (e.g., mutual fund) and charge explicit fees,” clarifies the folks over at Fidelity. “Fixed annuities offer either a fixed rate of return or a guaranteed income stream, which reflects the company’s expenses and profit margins, rather than having explicit charges that you typically find in variable annuities.”
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