Best Annuity Companies
Choosing the right annuity provider can be a daunting task with so many options available, yet with the across-the-board support of Annuity Educator, undertaking this venture has never been so simple. By leveraging our platform, you’re able to compare the financial strength ratings and customer service scores of all the best insurance companies. The evaluations provided through our database are sourced by industry-leading third-party agencies, such as A.M. Best, Standard & Poor’s, and many others. As a result, we offer an unbiased assessment to help you better distinguish insurers that excel in fulfilling obligations, which makes them all the more likely to deliver an exceptional customer experience.
Best Overall: North American Company for Life and Health
Best for being confident in your financial future
The North American Company for Life and Health Insurance is a prominent force in the annuity market. With over 135 years of experience, the company holds an A+ rating from A.M. Best, S&P Global Ratings, and even Fitch Ratings, reflecting its strong track record in meeting the diverse financial needs of a broad clientele. As of December 2022, it was reported that North American managed more than 459,000 life insurance plans and over 219,000 annuity policies, with $569 million paid in death claims.
Pros
- Long-standing history of financial strength
- Assorted range of life insurance and annuity products
- Privately owned; shielded from pressures to prioritize short-term earnings and stock price
- Seasoned customer service reputation
- Commitment to aiding communities and empowering employee growth
Cons
- Limited brand recognition in comparison to larger insurers
- A few customer complaints regarding policy information and handling claims
Why we chose North American
We selected North American Company for Life and Health Insurance due to its exceptional financial ratings, variety of product offerings, and commitment to long-term stability. With solid customer approval scores, the company has seen sustained success in the retirement planning sector. Its private ownership structure allows for a focused emphasis on the interests of policyholders in the long run.
Third-party ratings
Types of annuities
FIA, MYGA and SPIA
Riders
For income
2nd place: Athene Annuity and Life Company
Best for no-charge income and death benefit riders
Athene Annuity and Life Company is a top-tier insurer known for its financial strength, boasting an A rating from some of the finest rating agencies: A.M. Best, Fitch, and Standard & Poor’s. Initially founded in 2009, Athene became the sole leading provider of fixed-indexed annuities in 2020 by besting every other insurer in total sales numbers across the entire U.S. With an emphasis on retirement savings products, Athene offers a wide-ranging selection of fixed-indexed and other income annuities, securing the financial future of countless American retirees.
Pros
- Outstanding financial strength ratings from many major agencies
- Various fixed-indexed annuities offered, as well as an array of other annuity products
- Ranked the no.1 provider of fixed-indexed annuities in 2020
- Low complaint index–calculated through customer reviews–standing at 0.10 in 2021, which is far below the industry average
- High employee satisfaction
Cons
- Relatively young company, having been founded in 2009
- Limited product offerings beyond annuities
Why we chose Athene
Athene Annuity and Life Company is amongst our top picks due to its impressive financial strength ratings, diverse annuity product offerings, and position as the leading provider of fixed-indexed annuities in the U.S. market. Each one of these factors reinforces Athene’s reputation as a reliable and well-managed insurer, having consistently been able to fulfill obligations to its clientele, ensuring financial stability in their golden years.
Third-party ratings
Types of annuities
FIA, RILA, MYGA and SPIA
Riders
For income and legacy
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3rd place: Corebridge Financial Inc. (AIG)
Best for financial stability
Corebridge Financial Inc., previously known as AIG Retirement Services, is a major financial services company specializing in annuities, life insurance, asset management, and retirement solutions. Officially founded (under its current name) in 2022, the company has a long history dating back to 1926, when it was referred to as the American General Insurance Company. As of 2022, the company carries $350 billion in assets under management, over 8,000 employees, and reportedly earned $26.7 billion in revenue and $8.1 billion in net income, showcasing its large operational scale.
Pros
- Expansive corporation with $350 billion in assets under management and more than 8,000 employees
- Solid financial performance over the years
- Long history and brand recognition from predecessor companies
- Various insurance, annuity, and retirement products to choose from
Cons
- Recently spun off as Corebridge Financial in 2022, making it quite new as a separate public company
- Limited data on its current financial strength ratings due to its latest status
Why we chose Corebridge (AIG)
With a great history going back almost a century, Corebridge Financial Inc. stands out thanks to its comprehensive diversity of product offerings across the insurance, annuity, and retirement solutions sectors. Furthermore, the company is backed by the sheer size of its operations, making it a top choice in terms of reliability. Having existed through predecessor firms like American General since 1926, Corebridge is no stranger to the financial services industry, with extensive experience as a state-of-the-art insurer.
Third-party ratings
Types of annuities
FIA, Fixed, MYGA, SPIA and VA
Riders
For income
4th place: Fidelity & Guaranty Life Insurance Company
Best for creating a predictable income stream
Fidelity & Guaranty Life, more commonly referred to under its acronym F&G, specializes in providing annuities and life insurance policies across the U.S. Founded in 1959, F&G now has over $35 billion in assets under management. Selling its products through independent agents and financial professionals alike, the company offers various fixed and fixed-indexed annuities, as well as term life insurance products. With a mission to guide its clients towards financial stability in retirement, F&G is among the Sammons Financial Group and its subsidiary, North American Company for Life and Health Insurance.
Pros
- Over 60 years of experience in the annuity and life insurance market
- Known for its financial strength, with more than $35 billion in assets under management
- Great variety of products, including an innovative fixed-indexed annuity model
- Distribution through a nationwide network of financial experts
- Part of the well-established Sammons Financial Group
Cons
- Limited brand recognition in comparison to other larger insurers
- Current financial strength ratings are not publicly displayed
Why we chose F&G
With a lengthy history of meeting the demands of its clientele, we chose F&G Annuities and Life due to its financial strength in providing annuity and life insurance solutions to retirees. As a part of the reputable Sammons Financial Group, the company has a wide variety of products tailored to meet the distinct needs of its customer base.
Third-party ratings
Types of annuities
FIA, MYGA and SPIA
Riders
For legacy
5th place: American Equity Investment Life Insurance Company
Best one-stop shop for annuities
American Equity Investment Life Insurance Company specializes in supplying fixed and fixed-indexed annuities to retirees across the U.S. Founded in 1995, the company empowers its clients to fulfill their retirement objectives with financial comfort and peace of mind. Being a large-scale provider with $58 billion in assets under management as of late, the company offers an assortment of traditional fixed annuities as well as fixed-indexed annuities that provide both principal protection and credited interest.
Pros
- Nearing three decades of experience with a particular emphasis on annuities
- $58 billion in assets under management, reflecting its reliability as a top-tier provider
- Diverse fixed and fixed-indexed annuity offerings
- Clear disclosure of fees and charges for each one of its products
- In 2022, the company was ranked no.1 in Customer Satisfaction for annuity providers by J.D. Power
Cons
- Not many product offerings besides annuities
- A few negative reviews when it comes to customer service experiences
Why we chose American Equity
American Equity is amongst our best annuity company picks as its distinct focus on fixed and fixed-indexed annuities allows for a more tailored approach to retirement planning. Offering principal protection, tax-deferred growth, and opportunities for index-linked growth, American Equity’s $58 billion in assets under management are proof of its consistent rise in the annuity market.
Third-party ratings
Types of annuities
FIA, Fixed and SPIA
Riders
For income
Top Fixed (MYGA) Annuity Providers
| Name | Rating | |
|---|---|---|
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New York Life | A++ |
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Midland National | A+ |
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Athene | A+ |
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Corebridge (AIG) | A |
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Americo Financial | A |
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United Life | A- |
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Oceanview | A |
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Aspida | A- |
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American Life | B++ |
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ELCO Mutual | B++ |
Top Indexed Annuity Providers
| Name | Rating | |
|---|---|---|
|
MassMutual Ascend | A++ |
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North American | A+ |
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Allianz | A+ |
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Nationwide Life | A+ |
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Athene | A+ |
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Corebridge (AIG) | A |
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Global Atlantic | A |
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Security Benefit | A- |
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F&G | A |
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American Equity | A- |
Safest Annuity Companies Based on AM Best Rating
| Name | AM Best | Fitch | S&P | Moodys | Comdex | Year Founded | |
|---|---|---|---|---|---|---|---|
|
Massachusetts Mutual Life Insurance Company | A++ | AA+ | AA+ | Aa3 | 98 | 1851 |
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Thrivent Financial for Lutherans | A++ | AA+ | Aa2 | 100 | 1902 | |
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New York Life Insurance and Annuity Corporation | A++ | AAA | AA+ | Aaa | 100 | 1845 |
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MassMutual Ascend Life Insurance Company | A++ | A+ | Aa3 | 94 | 1851 | |
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Reliance Standard Life Insurance Company | A++ | A+ | A1 | 91 | 1907 | |
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The Guardian Insurance & Annuity Company | A++ | AA+ | Aa1 | 99 | 1860 | |
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Allianz Life Insurance Company of New York | A+ | AA | 96 | 1982 | ||
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Protective Life and Annuity Insurance Company | A+ | AA- | AA- | 94 | 1907 | |
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Prudential Insurance Company of America | A+ | AA- | AA- | Aa3 | 95 | 1875 |
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Nationwide Life Insurance Company | A+ | A+ | A1 | 90 | 1929 | |
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What Is an Annuity?
Annuities are financial products that deliver a regular income stream over a set period, typically aimed at retirees. It involves a contract between the investor and the insurance company, where the annuitant makes a lump sum contribution or periodic payments to fund the annuity, and in exchange, the insurer promises to deliver consistent payouts to the annuitant, either for a fixed term or for life. An annuity’s end goal is to convert your retirement savings account into future income, potentially accumulating in value over time, depending on the annuity type you choose.
Types of Annuities
Annuities come in a variety of types, predominantly including fixed, variable, fixed-indexed, immediate, and deferred annuities. Your choice between these options will impact the returns you receive from the initial investment. Let’s take a look at each annuity type in more depth:
- Fixed Annuities: Offer a guaranteed rate of return for a predetermined length of time, often for life.
- Variable Annuities: Link your annuity to the market, enabling you to invest in a broad range of underlying investment options, such as mutual funds or even stocks. Although this comes with the potential for high profits, there are also more risks associated.
- Fixed-Indexed Annuities: Provide the potential for growth by tying your annuity to a specified market index, like the S&P 500, whilst offering downside protection in the case of market collapse.
Choosing the Right Annuity
Selecting the annuity option best suited to your needs involves considering several factors, such as financial objectives, risk tolerance, and retirement timeline. Whereas fixed annuities may be the right pick for those seeking steady income with zero risk, variable annuities might be better for those willing to take on more risk in exchange for profit potential. Additionally, it is indispensable to understand the terms, fees, and potential penalties associated with each annuity type before making a decision.
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Why Choose an Annuity for Retirement?
With a reliable income stream often lasting until the end of your life, annuities serve as a guarantee against longevity, ensuring you don’t outlive your retirement savings. On top of that, they can also offer tax-deferred growth within the annuity, meaning taxes are not applied to any earnings until withdrawals are made. Certain annuities also offer riders or death benefits, allowing you to further tailor the investment to your needs and providing financial protection for any beneficiaries you may have.
How Much Does an Annuity Cost?
An annuity’s cost is likely to fluctuate depending on the type of annuity in question, the total sum of your contribution, and the specific conditions of the contract. Fixed annuities typically require a lump-sum payment upfront, while variable annuities may be more lenient, often permitting periodic contributions. Essentially, the total cost of an annuity is the amount you decide to invest, although this amount is likely to be returned to you over time. However, it is pivotal to acknowledge the fees and charges linked with each annuity product, as this can add to the total cost of an annuity.
Annuity Fees and Penalties
Annuities often come with various fees and charges attached to the contractual agreement, including mortality and expense risk charges, administrative fees, and investment management fees, as well as potential tax penalties and surrender charges if funds are withdrawn early. Before buying an annuity, it is crucial to carefully review these fees and penalties to see how they may impact your returns.
Are Annuities a Good Investment?
Whether or not an annuity is a good investment will depend on your individual circumstances and financial objectives in retirement. Whereas annuities pride themselves in supplying a constant income stream and tax-deferred growth, they may also come with high fees and limited liquidity. Evaluate the pros and cons and how each one may impact your unique financial situation.
Where to Buy Annuities
Annuities can be purchased through various channels, including insurance companies (most popular method), financial advisors, and online platforms. Researching and comparing the different annuity providers is an essential part of the process to find the exact product befitting your needs.
How To Choose an Annuity Company Suited to Your Preferences
When deciding which annuity company to go with, consider factors like financial strength ratings, customer service reputation, product offerings, and fees & charges. Look for companies with high ratings from independent agencies like A.M. Best, Moody’s, and Standard & Poor’s. Such ratings reflect the annuity providers’ ability to meet their financial obligations to their clientele.
Key Questions to Guide Your Annuity Company Selection
- What is the company’s financial strength rating?
- Does the company have a good reputation for serving their customers faithfully?
- Does the company have a broad range of product offerings to choose from?
- Can the company supply the annuity type that aligns best with my financial goals?
- What surplus fees does the company charge for the annuity; how do they compare to competitors?
- Is the company’s track record consistent in honoring commitments and fulfilling claims?
- Are the company’s annuity products easy to understand and transparent in terms of fees and potential penalties?
- Does the company provide riders or other additional benefits that can further tailor the annuity investment to my liking?
Frequently Asked Questions About Annuity Companies
How can I know if an annuity company is financially stable?
To determine whether an annuity provider is financially stable, you can verify its financial strength ratings from impartial rating agencies like A.M. Best, Moody’s, or even Standard & Poor’s. The ratings from such agencies are generally accurate, factoring in crucial aspects like customer service and the ability to meet contractual commitments.
Can I withdraw funds from my annuity before the surrender period is completed?
Although some annuities do allow for early withdrawals, surrender charges, and tax penalties may apply in doing so. Review the conditions of your annuity contract before making an early withdrawal, as this could significantly influence your anticipated returns.
What happens to my annuity if an insurance company faces bankruptcy and can no longer fulfill its obligations?
In the event of an insurer’s bankruptcy, annuitants are generally protected by state guaranty associations, which provide coverage up to certain limits. The exact level of protection is likely to vary by state, however.
What is the taxation method used for an annuity investment?
Annuity payouts are generally taxed as ordinary income, yet the precise taxation process depends on how the annuity was initially acquired. If purchased with pre-tax funds, the whole sum of your annuity’s value will be taxed upon withdrawals. On the other hand, if the annuity was bought with after-tax funds, only the earnings portion of the investment would be taxed during the payout phase.
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