You need to know about your variable rate contract before you exchange it. When you own a variable annuity contract, a broker can make a temptation to offer you an opportunity to exchange your contract to another. You should consider this? Maybe, but it can not be in your best interest.
The problem with exchanging one contract to another by broker or agent can spin a story to make it sound very attractive. What you must remember is the grass is not always green on the other side of the fence. Your contract may offer the same or better benefits that can be added after the purchase of variable annuities.
That’s right, and many companies offer the opportunity to buy newer benefits for existing variable annuity policyholders. Many times the agent can not realize this, or just want to earn a commission. When it does, that part is omitted from the sales talk. The availability of new features not available from your current annuity business, or in the rare event that the insurer’s financial problems are really the only reasons to switch variable annuity contracts.
You should never ever exchange a variable annuity for another, if you are still subject to a deferred sales charge or penalty. Many brokers tell you that you can make up of the surrender charge with a new “bonus”variable rate. The fact is you will never reach this penalty, you can take. Everything you have done is to return a contract to another, which have longer surrender charges and / or higher fees.
The only acceptable reason to take a penalty if the current insurance carrier is in very bad economic situation. Other than that it is therefore perhaps just one reason for the agent to generate a second commission.
If you are considering to exchange a floating rate to another brand that you do it for the right reasons. If it is for the opportunity to get a better service, be sure your current company does not already offer this service. Also make sure you get the best performance for the money you spend.
Making a comparison of the annuity being offered, you should get the annual performance report that I offer. I show you exactly how the benefits work, and the costs associated with them. You must have the facts, especially when switching from one annuity to another. The sad fact is that exchange annuity contracts are big business and there are a lot of money in it.
Always make sure you get the right information the first time around. Research, compare and evaluate variable annuities at your own pace, without a salesperson. Read “The Annuity Report ‘, get the facts and not get hoodwinked.