Where can I compare rates for immediate annuities?

By Austin Kilham August 2, 2012

This article appeared at the following website: blogs.money.cnn.com

Is there a website that provides the best rates for immediate annuities? — Dale D.

First off, a quick definition: Unlike other types of annuities, immediate annuities start paying out right after you buy them with a lump sum payment. Immediate annuities can vary based on the duration of their payments. For instance, they can be "period certain," which pays out over an allotted period of time (typically 5–20 years), or they can pay out over your lifetime and/or that of your spouse. Immediate annuities can also vary based on the calculation of the payments themselves — some are fixed for the duration of the annuity while others may vary based on inflation rates. A number of websites give immediate quotes, but you still have to be careful of hidden fees and surrender charges that won't show up on these sites.

Dr. Steven Weisbart of the Insurance Information Institute, a New York-based industry group, offers one option for comparing rates: www.immediateannuities.com. Plug in your home state, age, and the amount you wish to invest — or the monthly annuity income you want to receive — and the site crunches the data and offers several rate quotes from different companies.

Regardless of the website you use, Weisbart suggests you do some additional research before diving headlong into an annuity. "Don't ride off into the sunset with one Internet site," he says. "At the very least, call the company and make sure that rate is correct."