Annuity Review and Second Opinion
An honest second look at the annuity you already own, and whether it's still the right tool for the plan.
When’s the last time you reviewed your annuity?
Have an annuity and you are not sure what you own? The review looks at the surrender period, the current value, the income base, guaranteed income, the death benefit, rider costs, the crediting method, and the tax if you change it. That is an annuity second opinion. It is not a new product.
Request that review on the contact page. The eight checks before anyone moves a contract are in Should I keep my annuity or move it?. If you want the question people ask after the charge expires, start with the contract date, not with a replacement illustration.
If your annuity is more than five years old, it’s worth a fresh look. The financial landscape moves. Newer products often have better rates, stronger guarantees, and different growth features than what was on the market when yours was issued. Or your old one may still be the right tool. Either way, you should know.
This page is about the review, not the sale. Annuities are useful in a financial plan when they solve a specific problem. They are a poor fit when they’re sold as a one-size-fits-all retirement vehicle to someone who didn’t need one.
What an annuity actually is
An annuity is a contract with an insurance company. In exchange for a premium (paid as a lump sum or over time), the insurer agrees to pay you a stream of income, a defined growth rate, or both, on terms spelled out in the contract.
There are several flavors, each with different mechanics:
- Immediate annuity (SPIA). You hand the insurer a lump sum, and a check starts arriving within a year. Trades flexibility for guaranteed income.
- Deferred fixed annuity. Grows at a fixed rate for a set term, similar in feel to a multi-year CD but with different tax treatment.
- Fixed indexed annuity (FIA). Growth is tied to a market index with a cap or participation rate, protected by a floor (usually zero). You don’t get the full upside, but you don’t take a loss when markets fall.
- Variable annuity. Money is invested in subaccounts that act like mutual funds. More upside potential, more downside risk, and usually higher fees.
Why an annuity review matters
A contract written 7 years ago may have:
- An outdated participation rate or cap that no longer reflects today’s market
- Income riders with fees you’re paying for but never plan to use
- Surrender charges that have rolled off (you may now have flexibility you didn’t have before)
- A spouse continuation feature that doesn’t actually match your current situation
- A death benefit that no longer fits the rest of the estate plan
Sometimes the right move is to leave it alone. Sometimes a 1035 exchange to a newer contract makes sense (tax-free transfer between annuities, when the math supports it). Sometimes the right move is to surrender it strategically and redeploy the capital elsewhere. We work through the numbers honestly.
When an annuity makes sense
Annuities are useful for solving specific planning problems:
- Longevity protection. Guaranteed income that lasts as long as you do, no matter how long that is.
- Principal protection with some growth. For risk-averse savers who can’t afford a market drawdown right before retirement.
- Filling an income gap. When Social Security and pensions don’t cover essential expenses and you’d rather not depend on portfolio returns for the basics.
- Tax-deferred growth for funds outside qualified accounts, especially for high earners already maxing their 401(k) and IRA.
When they don’t
- As a substitute for a retirement plan when 401(k), IRA, and Roth space is still available
- Inside an IRA, when the tax-deferral the annuity provides is duplicative (rarely the right answer)
- When the annuity’s surrender period and fees outweigh the income or protection benefit
How a review works with us
We pull the contract, the recent annual statement, and the original illustration. We look at:
- What it’s actually doing today vs. what it was sold as
- The cost of every rider, layer by layer
- The surrender period and any remaining charge
- What’s available in the current market, with the same protection features
- How it fits with the rest of your plan, Social Security, pensions, portfolio, RMDs
No pressure, no sales pitch. If you already have the right annuity, we’ll tell you so. If you don’t, we’ll show you what would.
Guarantees on annuities are subject to the claims-paying ability of the issuing insurance company. Examples shown here are illustrative and are not necessarily indicative of future performance or results.
Annuity Review and Second Opinion FAQs
What do you look at in an annuity review?
The surrender period and any remaining charge, the account value versus the income base, rider fees, the death benefit, the crediting method, and the tax if you surrender or do a 1035 exchange.
Should I surrender an annuity when the surrender period ends?
Not automatically. The charge going to zero means you can move. It does not mean the guarantee, the income rider, or the tax result improved. Those get checked before anyone moves the contract.
What is a 1035 exchange?
A transfer from one annuity to another that can defer tax, under IRC 1035. It does not erase a new surrender period or a lost rider. The exchange is only useful when the new contract is better after those costs.
Is this a pitch for a new annuity?
No. Sometimes the right result is to keep the contract. Sometimes it is to exchange it. Sometimes it is to surrender and use the money somewhere else. The review is the comparison.
Let's see if we're a good fit.
A 30-minute introductory call, no pressure, no obligation. We'll talk through your goals and whether working together makes sense.