Income For LifeWant to know the ONLY time to consider a Bonus rate in an Annuity Decision? Many products include attractive bonus interest rates. Some annuities offer bonuses as high as 10% or more just for signing up.
Companies lose money on this from the start!
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To pay for this expensive form of marketing, the insurance company will need to guarantee they can hang on to your money for long enough to recoup the cost and turn a profit. If you buy such a product, you are married to a serious surrender schedule with substantial fees. Say goodbye to your money for a long time. Bonus rates are just a form of flashy packaging for annuity products and should definitely be ignored nearly every time an annuity is evaluated. When they make sense: Once all other contract provisions are equal, a bonus rate can break a tie between two annuities. Then, and only then, is a bonus a deciding factor. Regrettably, we have yet to see an annuity where all the other factors are equal. 
Action Items:
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Bonus rates are carrots that pander to the base human emotion of greed. |
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Set aside greed and examine your true motivations – if you really don’t need liquidity, or don’t mind a long surrender charge, a bonus rate might be worthwhile |
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In general, avoid bonus rates until the end of a decision making process, once YOU lay out EXACTLY what you want your annuity to do for your financial future. |
