How to Review an Annuity You Already Own
A step-by-step way to understand a contract you purchased years ago, before deciding whether it still fits.
Anyone who owns an annuity purchased in the past and wants to understand what it actually does before making any decision about it.
Annuity contracts are often purchased once and then set aside for years, which means the original terms, riders, and costs can be unfamiliar by the time a decision needs to be made about them.
- How to locate the actual contract and a current statement
- How to identify what type of annuity you own
- Where to find the surrender schedule and remaining charges
- How to read the riders attached to the contract and their ongoing costs
- How the income calculation on the contract actually works
- Why beneficiary and ownership titling deserve a fresh look
- General tax treatment of annuity withdrawals
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Locate the actual contract and a current statement
Start by finding the original contract document, not just a summary or an old brochure, along with the most recent statement from the issuing carrier. If the paperwork can't be located, most carriers can provide a copy on request. This review is general information only and is not a recommendation to buy, keep, or exchange any contract.
Questions to answer- · Do we have the actual contract, or only a summary?
- · How recent is our most current statement?
- · Have we contacted the carrier if documents are missing?
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Identify what type of annuity you own
Annuities come in several structures — fixed, fixed indexed, and variable, among others — and each calculates growth, fees, and income differently. The contract's declarations page or specifications page typically states the type directly. Knowing the type is the starting point for understanding every other feature that follows.
Questions to answer- · What type of annuity does our contract identify?
- · Do we understand how that type credits growth?
- · Has this type of contract changed in any way we're aware of?
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Find the surrender schedule and remaining charges
Most annuities include a surrender charge period during which withdrawing more than a stated amount triggers a fee, and that schedule typically declines over a set number of years. Locate the schedule in the contract and calculate how much time and how much charge remains today. This single figure often determines whether any change to the contract makes sense right now versus later.
Questions to answer- · How many years remain on our surrender schedule?
- · What would the surrender charge be if we withdrew today?
- · Is there a free-withdrawal amount available each year?
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- Locate the actual contract and a current statement
- Identify what type of annuity you own
- Find the surrender schedule and remaining charges
- Read the riders and their ongoing costs
- Understand how the income calculation actually works
- Revisit beneficiary and ownership titling
- Understand the general tax treatment of withdrawals
- Ask whether the contract still fits its original purpose
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Official sources
Rules change. Confirm anything that affects a decision against the current official source.
Where this fits in our work
This guide accompanies our asset preservation & annuities work. Joe Donti meets with Arizona households by appointment — in the Scottsdale office, by phone, or on Zoom.
Related reading
This guide is general education and is not individualized investment, tax, legal, Medicare, or insurance advice, and it is not a recommendation to buy or sell any product or security. Investing involves risk, including possible loss of principal. Insurance and annuity guarantees depend on the claims-paying ability of the issuing carrier. Rules and figures change — confirm current details with the official sources above and with your own tax, legal, or insurance professional.