Immediate annuity fees are not transparent; all the fees are built into the monthly income quote the insurance company gives you.
This means the insurance company has calculated out your life expectancy, determined how much money they would like to make, and then they give you a quote of the amount of lifetime income they can provide to you based on the lump sum you give to them.
You’ll want to get immediate annuity quotes from several companies, as some may charge less than others. Keep in mind that the company that pays the highest monthly amount may not always be the best deal for you. Companies with lower ratings may pay higher monthly annuity amounts in order to attract your business.
A lower rating means the company's financial strength is not as solid as a similar company with a higher rating; so if your lifetime income is dependent on it, you’ll want to do your homework and check out the financial strength of the insurance companies who give you the best quotes. To assess the financial strength of an insurance company, look at their ratings.
