Things to remember when buying annuities:

• An annuity contract is a written contract between you and a life insurance company.
• In return for your premium, the company will pay you an annuity which is a series of payments made at regular intervals.
• An annuity contract is not life insurance, health insurance, a savings account or savings certificate and should not be bought for short term investment.
• An annuity is not "risk free" or "guaranteed safe," but is only as safe as the insurance company which issues it.
• If you take your money out of an annuity, penalty provisions of many contracts mean that you may get back less than you put in.
• annuity contracts vary in a number of ways. The following are some of the more important ways:
• Immediate annuities provide income payments that start shortly after you pay the premium.
• Deferred annuities provide income payments that start at a later date.
• The main reason for buying an immediate annuity is to obtain an immediate income, most frequently for retirement purposes.
• The main reason for buying a deferred annuity is to accumulate money on a tax-deferred basis, which can then provide an income at a later date.
• Some annuities are "front loaded," which means that most of the costs to the company are charged to you in the beginning.
• Some annuities are "back loaded," which means that most of these costs are charged to you later on.
• Some annuities spread their charges evenly throughout the life of the annuity.
• Some annuities charges will be fixed by the contract while some may be changed by the company from time to time.
• Before buying an annuity you should know all of the charges that you will pay and when you will pay them.
• Figure out how annuity charges might affect the actual amount of money that will accumulate from your premium payments.
• Load charges may be deducted from each premium before any interest is added. The percentage may reduce after the contract has been in force for a certain number of years or after the total premiums paid have reached a certain level.
• Contract fees could be a flat dollar amount charged either once at the time of issue, or charged once each year.
• Transaction fees could be a fixed charge per premium payment or other transaction.
• Surrender charges are usually a percentage of the value of the contract or of premiums paid (may be reduced or eliminated after the contract has been in force for a certain number of years).
• The insurance company may allow you to surrender your annuity contract if income payments have not yet started (your contract value less the surrender charge).
• The insurance company may allow you to withdraw a portion of your contract value frm the annuity under certain conditions, without terminating the contract.
• You could incur certain tax penalties for early surrender of an annuity.
• Annuity income payments are usually made monthly, although other frequencies are available.
• Your annuity payments are based on the value of the contract and the contract's "benefit rate" when the first payment is made. The benefit rate depends on your age, sex, and the specific features of the annuity you chose.
• Figure out how much annuity income will you need in addition to social security, pension savings, and investments.
• You must receive either a preliminary contract summary or a contract summary prior to the time you pay the initial premium. If you did not receive a contract summary with this buyer's guide, you must receive one when the contract is delivered or you can ask for one now.
• During the first few years, accumulated values and surrender values may be less than premiums paid. This is why an annuity contract should not be purchased for short term purposes.
• The tax treatment of annuity earnings is usually substantially different from that of earnings from other investments.
• Annuity contracts are used to obtain an income, so you should review the life income estimates.
• Guaranteed income figures shows the minimum values and income which would be paid under the contract.
• "illustrated" income figures shows the values and income which would be paid if the current interest and benefit rates were to continue in effect.
• Be certain you understand all charges that will be made and how they may reduce the value of the annuity.
• Make sure you can afford the premium payments.
• Check whether the annuity contract allows you to change the amount and frequency of your premium payments. Find out what happens if you stop paying premiums.
• Obtain and compare contract summaries for similar contracts from several companies. Comparing these should help you in your selection.
• If you are buying an annuity contract for an individual retirement account (ira) or another tax deferred retirement program, make sure that you are eligible. Make sure that you understand any restrictions and tax implications connected with the program.
• make sure the assumptions and illustrations could apply in your case.
• Some companies offer deposit fund arrangements with their life insurance policies or annuity contracts. These arrangements allow you to pay amounts in addition to your premiums that will be accumulated at interest in much the same way as under a deferred fixed annuity contract.
• Make sure you understand any tax penalties that would be imposed on surrender. If in doubt, consult your tax advisor.
• Read the contract
• When you receive your new annuity contract read it carefully. Ask the agent or the company for an explanation of anything you do not understand.
• If you have a specific complaint or cannot get the answers you need from the agent or company, please contact your state's commissioner of insurance