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
- 1
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?
- 2
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?
6 more sections in the full guide.
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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.
Includes: “How many years remain on our surrender schedule?”
- Read the riders and their ongoing costs
Riders — such as guaranteed income riders or death benefit riders — usually carry their own annual cost, separate from the base contract, and that cost typically continues whether or not the rider is ever used.
Includes: “What riders are attached to our contract, and what do they cost annually?”
- Understand how the income calculation actually works
If the contract includes an income benefit, the amount it eventually pays is usually based on a formula involving a benefit base, a payout percentage tied to age, and specific start-date rules — figures that are often different from the contract's account value.
Includes: “What is our current benefit base, if the contract has one?”
- Revisit beneficiary and ownership titling
Ownership and beneficiary designations on an annuity affect who controls the contract and who inherits it, and both can become outdated after a marriage, divorce, or death in the family.
Includes: “Who is currently listed as owner and beneficiary on this contract?”
- Understand the general tax treatment of withdrawals
Withdrawals from a non-qualified annuity are generally taxed on a last-in-first-out basis, meaning gains are typically withdrawn first and taxed as ordinary income, while annuities held inside an IRA follow IRA distribution rules instead.
Includes: “Is this annuity held inside a retirement account or outside one?”
- Ask whether the contract still fits its original purpose
Annuities are usually purchased with a specific goal in mind — guaranteed lifetime income, principal protection, or tax deferral, for example.
Includes: “What was this annuity originally purchased to accomplish?”
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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.