Request an annuity comparison
What is an annuity?
An annuity is a contract with an insurance company. You contribute a lump sum or a series of payments. Depending on the contract, the insurer credits interest, provides future income, or begins paying income soon after purchase.
Fixed annuities are designed for long-term retirement needs, not short-term cash storage. Their guarantees depend on the financial strength and claims-paying ability of the issuing insurer. They are not bank deposits and are not insured by the FDIC or SIPC.
What can an annuity help you do?
- Protect a portion of retirement savings from direct stock-market losses, subject to contract terms
- Lock in a stated rate for a set period with certain fixed annuities
- Defer taxes on growth until money is withdrawn
- Create income for a set number of years or for life
- Continue income for a surviving spouse if you choose a joint option
- Add beneficiary or income features when the contract offers them
Which type of annuity fits the job you need done?
The word “annuity” covers several contracts with different purposes. Start with the outcome you want, then compare the restrictions and costs. The exact features and guarantees come from the issuing carrier’s contract and materials.
| Annuity type | What it is designed to do | May fit when | Important trade-off |
|---|---|---|---|
| Multi-year guaranteed annuity (MYGA) | Credits a stated interest rate for a set number of years | You want predictable accumulation and do not need near-term access to the full balance | Withdrawals above the contract allowance may trigger surrender charges or a market value adjustment |
| Fixed indexed annuity (FIA) | Credits interest using a formula linked to an external index without directly investing your premium in the index | You want index-linked interest potential without direct stock-market exposure | Caps, participation rates, spreads, and other contract terms limit credited interest and may change as allowed by the contract |
| Single-premium immediate annuity (SPIA) | Converts a lump sum into payments that generally begin within one year | You need predictable income soon | After income begins, the election is generally irrevocable and access to the original premium may be limited or unavailable |
| Deferred income annuity (DIA) | Converts a premium into income scheduled to start more than one year later | You want to secure income for a later retirement age | Before and after income begins, access to the premium may be limited or unavailable, depending on the contract |
This page does not compare variable annuities or registered index-linked annuities.
How much income will an annuity pay?
There is no accurate one-size-fits-all payout for a $100,000, $200,000, or $500,000 annuity. The amount depends on:
- How much premium you contribute
- Your age when income begins
- Whether payments cover one life or two
- Whether you choose lifetime income, a period-certain payout, a refund feature, or other beneficiary protection
- The insurer, contract, state, and rates available when you apply
In general, starting lifetime income later can increase the payment because the expected payment period is shorter. Adding protection for a spouse or beneficiaries can reduce the initial payment because the insurer may be responsible for paying longer or returning more value.
LifeQuote does not use a static payout example or an instant website result as a substitute for current carrier information. After you submit a request, a licensed representative can compare available options and explain the assumptions behind any quote or illustration.
The useful comparison is not just “Which option pays the most?” It is “Which option provides the right balance of income, access, spouse protection, and legacy for me?”
Can you use an IRA or 401(k) rollover to fund an annuity?
Eligible money from an IRA, a former employer’s 401(k), or another qualified retirement plan can often be used to fund an annuity when the transaction is completed correctly. A direct rollover generally avoids the mandatory federal withholding that can apply when an eligible retirement-plan distribution is paid to you first.LifeQuote does not actively solicit consumers to move assets out of former employer plans. If you initiate a rollover question, a licensed representative can explain available annuity options while the carrier and representative handle product-specific suitability, calculations, paperwork, and disclosures.An annuity inside a traditional IRA or other tax-deferred retirement account does not create a second layer of tax deferral. Its potential value must come from contract features such as guarantees, income design, or beneficiary choices, not from additional tax deferral.Rollovers can affect investment choices, fees, access, required minimum distributions, and creditor protections. Review the old plan, the proposed annuity, and the tax rules before moving money.Can you exchange an existing annuity?
A Section 1035 exchange may allow an existing annuity to be replaced without recognizing current gain when the transaction meets federal tax requirements. A replacement is not automatically beneficial. The carrier and licensed representative must review surrender charges, existing benefits, new contract terms, suitability, and required replacement disclosures.Disclosure: This is general educational information, not tax advice. Consult a qualified tax professional about your situation.Annuity vs. CD, bonds, and invested retirement assets
These tools solve different problems. The best choice depends on whether you value liquidity, growth potential, principal protection, or guaranteed income most.
| Feature | Fixed annuity | Bank CD | Individual bonds | Invested retirement portfolio |
|---|---|---|---|---|
| Guarantee source | Issuing insurance company’s claims-paying ability | Issuing bank, with FDIC coverage when eligibility rules and limits are met | Issuer’s ability to pay, unless backed by the U.S. government | No guarantee against market loss |
| Access | Contract limits, surrender charges, and adjustments may apply | Early-withdrawal penalty may apply | Can usually be sold, but value may be higher or lower | Generally liquid, but selling during a decline can lock in losses |
| Tax treatment | Growth generally tax-deferred until distribution | Interest generally taxable annually outside a retirement account | Interest and gains depend on bond type and account | Depends on the assets and account type |
| Lifetime income | Available through annuitization or certain income features | No contractual lifetime guarantee | No contractual lifetime guarantee | No contractual lifetime guarantee unless paired with an income product |
| Growth potential | Depends on fixed rate or index-crediting formula | Stated rate | Stated yield if held to maturity, subject to default and reinvestment risk | Varies by asset mix and is exposed to market gains and losses |
This table is a general comparison, not a recommendation. Product terms, tax treatment, and protections vary.
Companion page link: Compare fixed annuities and CDs in detail.What are the biggest disadvantages of an annuity?
The biggest disadvantage is often reduced liquidity. Many annuities are long-term contracts. Taking more than the contract permits during a surrender period can reduce what you receive.
Before buying, ask about each of these items in the carrier’s contract and disclosure materials:
Surrender charges
A surrender charge may apply if you withdraw more than the contract’s free-withdrawal amount or cancel during the surrender period. The charge often declines over time, but the schedule differs by contract.
Market value adjustments
Some fixed annuities adjust the amount you receive when you take money out early. Depending on interest-rate changes and contract terms, a market value adjustment may increase or decrease the withdrawal value. It may apply in addition to a surrender charge.
Rider and benefit costs
Some income, death-benefit, or other optional features have an additional charge. Ask what the base contract provides, what each rider costs, and whether the rider affects growth or access.
Index-crediting limits
An FIA does not give you the full return of the index. Caps, participation rates, spreads, index terms, and the exclusion of dividends can reduce credited interest. Some values may reset or change under the contract.
Inflation and opportunity cost
A level income payment may buy less over time as prices rise. Money committed to an annuity may also miss growth available from other assets. Inflation or cost-of-living features may be available on some contracts, but they can lower starting income.
Insurer risk
Annuity guarantees are obligations of the issuing insurer. They are not guaranteed by LifeQuote, Pinney Insurance, or a federal agency. Review the carrier’s financial strength and the contract itself.
Taxes on distributions
Tax treatment depends on how the annuity was funded and how money comes out. Taxable amounts are generally taxed as ordinary income. A federal additional tax may apply to taxable distributions before age 59 1/2 unless an exception applies.
When can an annuity make sense?
An annuity may deserve a closer look when:
- You have retirement savings beyond the cash you need for emergencies and near-term expenses
- Social Security and pension income do not fully cover essential spending
- You want a portion of your retirement income to continue for life
- A major market decline near retirement could disrupt your plan
- You want to protect income for a spouse
- You understand the contract and can leave the money committed for the required period
When might an annuity be the wrong fit?
An annuity may not be appropriate when:
- You may need most of the money during the surrender period
- You do not have adequate emergency savings
- You are carrying high-cost debt that should be addressed first
- Your guaranteed income already covers your essential expenses
- Maximum liquidity, market growth, or inheritance value matters more than predictable income
- You do not understand the costs, restrictions, or recommendation
- Someone is pressuring you to act before you can compare alternatives
There is no universal “best age” to buy an annuity. The right timing depends on when you need income, how much liquidity you have, your other guaranteed income, your goals for a spouse or heirs, and the specific contract.
These questions are general screening considerations, not a product recommendation. Minimum premiums, issue ages, liquidity provisions, and suitability standards vary by carrier, contract, and state. The licensed representative and issuing carrier complete the required product-specific review.
How can an annuity protect a spouse or beneficiary?
The payout option determines what happens after an owner or annuitant dies. Common structures may include:
- Joint lifetime income: Payments continue while either covered person is living
- Life with a guaranteed period: Payments continue for life, with a beneficiary eligible for remaining payments if death occurs during the stated period
- Cash or installment refund: A beneficiary may receive remaining value according to the contract if payments have not equaled the protected amount
- Death benefit during accumulation: Some deferred annuities pay a contract value or defined death benefit before income begins
These options are common, but they are not available on every contract. More protection for a spouse or beneficiary can mean a lower initial income payment. Compare the carrier’s payout choices and contract terminology before choosing.
Compare before you commit
1. Tell us what you want the money to do
Share the amount you are considering, when you may need income, whether the income should cover one person or two, and whether you prefer lifetime or period-certain payments.
2. Connect with a representative licensed in your state
LifeQuote and Pinney Insurance route your request based on the state where you live. The representative can use current carrier information to explain available contracts, rates or income, surrender schedules, withdrawal provisions, beneficiary choices, and carrier strength.
3. Review the trade-offs and required disclosures
The licensed representative and issuing carrier handle the product-specific recommendation, suitability review, illustration, calculations, and disclosures. Ask questions until you understand how the contract compares with your current plan and other choices.
4. Apply only if the option fits
If you decide to proceed, the licensed representative and carrier handle the application and any eligible transfer, direct rollover, or 1035 exchange paperwork. You receive the carrier contract and the applicable review period provided by the contract and state law.
After issue, Pinney Insurance services the contract. Call 800-823-4852 or email lifequote+brokeragesalessupport@pinneyinsurance.com with future questions.
Does it cost anything to request an annuity comparison?
There is no fee or obligation to request a comparison. If you purchase an annuity, the issuing insurance company may pay compensation to the licensed producer and Pinney Insurance. Under their revenue-sharing arrangement, LifeQuote receives 50% of the case-specific compensation Pinney Insurance actually receives from your purchase. Compensation may vary by carrier, product, term, and features, which creates a financial incentive for the parties. You may ask how the producer and the companies are paid and whether compensation differs among the options shown.
Compare the full contract, not only the headline rate or payout.
Publisher and review
Published by: LifeQuote
Reviewed by: Joseph Penchansky, Licensed Vice President, LifeQuote. NPN 417964. Licensed in all states..
Last reviewed: October 1, 2026
LifeQuote reviews this page when relevant tax guidance, product availability, or contract features change materially. Find out what your retirement savings could provide
Compare annuity options based on when you need income, how much access you want, and who the money should protect. A representative licensed in your state will explain the available information and trade-offs before you decide.
Find out what your retirement savings could provide
Compare annuity options based on when you need income, how much access you want, and who the money should protect. A representative licensed in your state will explain the available information and trade-offs before you decide.
Call 800-823-4852
Required Disclosure Draft
Annuities are long-term insurance contracts. Product availability, features, rates, guarantees, surrender periods, and tax treatment vary by contract and state. Guarantees are backed solely by the financial strength and claims-paying ability of the issuing insurance company. Annuities are not deposits and are not insured by the FDIC, SIPC, or any other federal agency. Withdrawals may be subject to surrender charges, market value adjustments, rider charges, ordinary income tax, and an additional federal tax before age 59 1/2 unless an exception applies. Quotes and illustrations depend on the assumptions shown and are not a guarantee that a carrier will issue a contract. This page provides general educational information and is not individualized financial, investment, tax, or legal advice. Consult the contract, a licensed professional, and your tax or legal adviser before making a decision.
LifeQuote does not issue or guarantee any annuity. All guarantees are backed solely by the financial strength and claims-paying ability of the issuing insurance company. This service is limited to non-registered fixed annuities and is available only where the companies and producer are properly licensed and authorized.