Before buying an annuity, be aware that insurance companies deduct some standard fees from your payments and your cash value.

Keep in mind that these annuity charges vary by product. Please ask your investment professional for specific information about these charges or look on this website for brochures for each specific product.

Common fees & charges for annuities

Administration/contract maintenance charge

These charges cover the cost of maintaining the policy, including accounting and recordkeeping.

Contingent deferred sales charge (CDSC)

The CDSC pays for sales expenses such as commissions, promotions and sales materials. The CDSC is deducted from your cash value if you surrender (terminate) your contract before the end of your surrender charge period. Be sure to check the length of your surrender charge period when evaluating a contract to buy.

Mortality and expense risk charge (M and E)

These charges compensate the insurance carrier for guaranteeing that annuity purchase rates and charges won't change, regardless of mortality rates or actual expenses.

Premium tax

This tax reimburses the insurance carrier for any premium taxes levied by a state or other government entity.

Short-term trading fees

These fees compensate the underlying fund and its contract owners for the negative impact on fund performance that can result from frequent, short-term trading strategies.

Underlying fund expenses

These expenses are deducted from underlying fund assets and pay for fund management distribution fees (such as 12b-1 fees) fees and other expenses.

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