"What are the fees?" is one of the most misunderstood questions about annuities. Here's a straight answer — including why many fixed annuities have no annual fees at all.
"What are the fees?" is one of the most common — and most misunderstood — questions about annuities. The honest answer depends on the type. Fixed annuities (like MYGAs) typically have no annual fees at all. Other types can have costs, but they're usually tied to optional features you choose to add. Let's clear up exactly what's what.
With a basic fixed annuity (MYGA), the rate you're quoted is the rate you get — there's no separate annual fee skimming your balance. Fees mostly come into play with more complex products or optional add-ons like income riders.
| Product | Typical annual fee? | What to know |
|---|---|---|
| MYGA (fixed rate) | None | The quoted rate is what you earn. No annual management fee. |
| Fixed Indexed Annuity (FIA) | Usually none on the base contract | The "cost" shows up as caps or participation rates that limit your upside, not as a fee line item. |
| Optional income rider | Yes — an annual fee | If you add a guaranteed-lifetime-income rider, it charges a fee (often ~0.5%–1.5%/yr against a benefit base). Optional. |
| Immediate income annuity (SPIA) | None separate | The insurer's costs are built into the income amount you're quoted. |
Instead of hidden annual fees, the things that actually affect what you keep in a fixed annuity are usually these:
Not a fee in the normal sense — it's a charge only if you withdraw more than your allowed amount before the term ends. Avoid it by matching the term to your timeline. (We cover this in depth on the Surrender Charges page.)
On indexed annuities, these limit how much of the market's gain you receive. They function like a cost, but they're not deducted from your balance — they shape your potential upside. Worth understanding clearly before buying.
If you add a lifetime-income rider or an enhanced death benefit, that feature charges an annual fee. These are entirely optional — you only pay if you choose to add them, and only if the guarantee is worth it for your situation.
Before recommending anything, the costs — whether it's a rider fee or an indexed-annuity's caps — get laid out plainly, so you know exactly what you're getting and what (if anything) it costs. No surprises buried in the fine print.
No pressure, no obligation. Explore the rate tool, take the 2-minute quiz, or ask Devin anything — whatever helps you understand your options.