Information is a customer’s best defense when shopping for annuities. Getting some good basic information before annuity shopping can protect a customer from buying the wrong annuity.
Just asking an agent who is trying to sell annuities a few basic questions can help a customer get a good deal. It can also help annuity shoppers spot unscrupulous or poorly informed agents that could be trying to steer you wrong.
- Can I see your license? An agent who is selling annuities will have to have a license issued by the state. A sale made by an agent without a license or a proper license may not be valid. Never assume that an agent has a current license ask to see it. Agents should display their license in their office but they don’t always do it. Never do business with an agent who refuses to show you his or her license.
- What commissions or fees do you charge on the annuities that you sell? There are some annuities that come with high fees that are paid back to the agent. The agent should come right out and inform you about the commission and fees charged. Remember it is sometimes possible to get an agent to waive fees.
- What annuities do you sell? A reputable agent should sell more than one brand of annuities. A good agent will give you a choice of annuities from several different companies. This can help you get the best annuity at the best rate. An agent that only sells one or two brands of annuities could be limiting your choice to the ones that give him the highest commission. If an agent isn’t selling a popular brand of annuities ask him why not.
- Can I read the annuity contract before signing it? This is one of the most important questions that you can ask. Always try to get a copy of the annuity contract and read it over two or three times before you sign it. Look closely to see that there are not added fees or conditions. If an agent doesn’t want you to see the contract you should probably go elsewhere. A reputable agent will provide you with a contract beforehand.
- What experience do you have with annuities? Annuities are very complex financial instruments that even professionals may have trouble understanding. It is best to find a professional who has had several years experience selling them. Be especially leery of persons who have had little or no experience with annuities. A good way to gauge a person’s experience is to ask her to explain several different annuities to you. That way you can look to see if the agent actually knows what she is talking about.
There are some other things you can do to check out an individual who is trying to sell you annuities. In many states, a government agency usually the state insurance commissioner, keeps records of complaints against insurance agents. These could be public record and it’s often possible for anybody to view these by going to the state’s website. Taking a look at the complaints can show you if the agent has had complaints.
Researching annuities on your own through the internet and other tools can help a person understand these investments. Try comparing what the agent says with the other information available. See if the agent’s claims can be verified. Also, don’t forget to ask your agent to lock in your fixed annuity rates as fast as possible, rates tend to fluctuate fairly often.
A final piece of advice that many people neglect to follow is to trust your instincts. Evaluate the agent’s behavior, manners and attitude. If you don’t like the way he or she is acting it is a good idea to go elsewhere. If you are not comfortable with the agent you will probably not be comfortable with the business relationship.