Strong Tower Advisors · Educational guide

Questions to ask before buying an annuity

Use this checklist before committing money to any annuity.

How we are involved. Annuities are insurance products. Strong Tower Advisors offers fixed and fixed indexed annuities through its insurance license (agency NPN 22216236) and Eduardo J. Valdes (individual NPN 8687827). Insurance and annuity sales are separate from investment advisory services provided through TLG Advisors, Inc., and TLG Advisors does not offer or supervise these insurance products. When we sell an annuity, we may receive a commission from the insurance company. Ask us how we are paid before you buy.

Questions to ask before buying any annuity

What problem am I trying to solve, and are there simpler or lower-cost ways to address it?
How long is the surrender period, and what is the charge each year?
What are all of the fees, including rider charges, and what do they add up to each year?
For indexed annuities: what are the cap, participation rate and spread, and can the insurer change them?
What is the insurer's financial strength rating, and from which rating agencies?
What happens to the money if I die, need long-term care or need cash early?
How is the person selling it paid, and what other products could they offer me?
If this replaces an existing annuity or policy, what am I giving up?
How long is the free-look period?

Other points to know

Buying an annuity inside an IRA or 401(k) does not add tax deferral; the account is already tax-deferred.
Exchanging one annuity for another can start a new surrender period and may cost you benefits you already have. Compare both contracts side by side.
Most states provide a "free look" period after delivery during which you can cancel; the length varies by state and situation.
Rates, caps and rider terms can change after purchase within limits stated in the contract.

Frequently asked questions

Should I buy an annuity inside my IRA?

An IRA is already tax-deferred, so an annuity inside it does not add tax deferral. People who consider it usually do so for a specific feature, such as lifetime income, and should weigh that feature against its cost and liquidity limits. This is a decision to review with a professional.

What is a free-look period?

Most states provide a “free look” period after the contract is delivered during which you can cancel. The length varies by state and situation, so check the contract and your state's rules.

Should I exchange one annuity for another?

Exchanging one annuity for another can start a new surrender period and may cost you benefits you already have. Compare both contracts side by side, including what you would give up, before deciding.

Sources

Educational only. This guide is not individualized investment, tax, legal or insurance advice and does not recommend any account, transaction or product. Rules and individual circumstances vary. Verify current official information and consult qualified professionals.