Annuity Comparison Chart

An annuity comparison chart can be useful.

But only if it compares the right things.

A good comparison should focus on contractual guarantees.

A bad comparison may focus on hypothetical returns, projections, back-tested numbers, or other results that are not guaranteed.

The difference matters.

Key Takeaways

• A useful annuity comparison chart should focus on contractual guarantees.
• MYGA comparisons should show guaranteed rates, terms, and carrier information.
• Lifetime income comparisons should show contractual payouts and payout options.
• Hypothetical growth charts should not be treated as guarantees.
• Different annuity types should be compared based on the specific problem they solve.
• Carrier financial strength matters, especially for lifetime income.

What Should an Annuity Comparison Chart Show?

The answer depends on the type of annuity.

For a MYGA, the chart may compare:

• guaranteed interest rate
• contract term
• carrier
• carrier rating
• surrender schedule
• liquidity provisions

For lifetime income, the chart may compare:

• contractual payment
• carrier
• financial strength
• single-life or joint-life structure
• beneficiary protection
• payout option

Those are meaningful comparisons because they are tied to the contract.

Bad Comparison Charts Focus on Hypotheticals

Be cautious with charts built around:

• projected indexed returns
• back-tested scenarios
• historical hypothetical performance
• participation rates
• cap assumptions
• hypothetical future values

Those numbers can change.

They should not be treated like contractual guarantees.

Why Fixed Index Annuity Projections Can Be Misleading

Fixed Index Annuities can use caps, spreads, participation rates, and other crediting methods.

Those terms may be subject to change after the initial period within the contract.

That makes long-term hypothetical return comparisons difficult to rely on.

If the entire chart depends on projected future indexed performance, understand that those numbers are not guaranteed.

MYGA Comparison Charts Are More Straightforward

A MYGA provides a guaranteed interest rate for a specific period.

That makes the comparison much easier.

You can sort available products by:

• state
• term
• yield
• carrier rating

Then review which contracts fit your liquidity and financial-strength requirements.

State Matters for MYGA Comparisons

MYGAs are state-regulated insurance products.

That means not every product is available in every state.

A meaningful comparison chart should reflect the products actually approved where you live.

Lifetime Income Comparison Charts

Lifetime income is another area where comparison charts can be helpful.

Different carriers may provide different contractual payments for the same:

• age
• premium
• state
• income start date
• payout structure

The goal is to compare the actual guaranteed income.

Compare Payout Structures

Lifetime income quotes can be structured in several ways.

Examples include:

• life only
• life with period certain
• cash refund
• installment refund
• joint life

A good comparison should make clear which payout option is being quoted.

Otherwise, you may be comparing two numbers that solve different problems.

Why Carrier Ratings Matter

For lifetime income, you may rely on the insurance company for decades.

That makes financial strength important.

The source approach is to compare A+ or better carriers for lifetime income and then evaluate the contractual payout.

MYGA Ratings Can Be Evaluated Differently

With MYGAs, the relationship with the carrier is for a specific term.

That can allow for a somewhat different financial-strength evaluation than a lifetime income contract.

The rate should still be considered alongside the carrier's financial condition and ability to meet the guarantee.

Annuities Are Commodity Products

There is no permanently best annuity company.

Carriers compete.

The strongest guarantee can change.

That is why a comparison chart is more useful than simply choosing the company with the most recognizable name.

Company Logos Do Not Determine the Winner

The brochure does not matter more than the guarantee.

The product name does not matter more than the guarantee.

The company logo does not matter more than the guarantee.

What matters is whether the policy provides the strongest appropriate contractual solution for your situation.

Start With the Goal

Before comparing charts, ask:

What do you want the money to contractually do?

When do you want those contractual guarantees to start?

If the goal is a fixed rate, compare MYGAs.

If the goal is lifetime income, compare lifetime income products.

Do not compare products that solve completely different problems as if they were interchangeable.

Where to Compare Annuities

Use our annuity calculators to compare current contractual guarantees from multiple insurance companies.

You can compare MYGA rates and terms or evaluate lifetime income payout options based on your age, state, and retirement goal.

The Bottom Line

An annuity comparison chart is useful when it compares contractual guarantees.

For MYGAs, focus on the guaranteed rate, term, carrier, financial strength, and liquidity.

For lifetime income, compare actual payout guarantees using the same payout structure.

Avoid making decisions based on charts built primarily around hypothetical future returns.

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