Can I Get My Money Out of My Annuity?

Can I Get My Money Out of My Annuity?

A question I get from my clients sometimes is once I make a place into an annuity contract can I get my money out again? The answer to that question is Yes you can! You have a few options to consider.

The most shared method of taking money out of an annuity contract is the annual free 10% withdraw characterize. This 10% annual withdraw of both rule and interest is shared among most of the insurance annuity companies. Depending on the insurance company, some companies make you wait a year before you can make a withdraw, some allow for a withdraw from day one.

Annuities come in terms. The terms can be as short as 6 years and as long as 16 years for some carriers. So while you are within the term, you can withdraw 10% per year of your rule and interest. (*some insurance companies allow for only a withdraw of “interest only” not rule without incurring a surrender charge, so be aware of the insurance companies free withdraw provision)

You can take all of your money out of an annuity before the term has finished, but if you take out more than 10% you will pay a surrender charge. Surrender charges are usually higher in the beginning and decline over the term, again, each annuity company has different terms and surrender charges.

Another method of taking money out of your annuity is to ask for a settlement option called “annuitization” which allows for you to avoid early surrender charges by selecting a term of payments. (*some insurance companies “do not waive early surrender charges” at annuitization, so be careful of the insurance company and know their provisions before you annuitize) The terms can be as little as 5 years, 10 years, 20 years or for your lifetime. This payout is what makes an annuity an attractive replace a pension. If you elect a lifetime payout, that method that the insurance company will pay you an income, usually monthly, for the rest of your life in spite of of how old you might get.

If you elect a short 5 year term you can receive “All” of your rule and interest in a 5 year period, this might be important if you need to get your money out before the end of your term to avoid early surrender charges.

Another characterize a lot of insurance companies have in addition is a “nursing home illness” waiver or a “Terminal illness” waiver. The way this waiver works, if you are confined to a nursing home for a certain period of time you can have access to 100% of your accumulated rule and interest and the insurance annuity company will “waive” all early surrender charges and allow for you to have all of your money. The same is true of a terminal illness waiver, if you become terminally ill you have 100% access to your money.

Annuities offer a variety of features and benefits, it’s important to find a specialized licensed insurance agent that is knowledgeable about annuities before you go into into a contract for an annuity.

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