Rating and buying annuities

Ratings can be confusing since each rating company has its own way of ranking insurers.

The Insurance Information Institute cites as an example that an A+ from A.M. Best is the next-to-highest rating of its 15 categories while an A+ from Fitch or Standard & Poor's is their fifth-highest rating (out of 24 categories for Fitch and out of 19 categories for S&P). Meanwhile, Moody's doesn't have an A+ rating. Confused?

Financial planners say your safest move is to choose among companies with the highest ratings. You can get ratings by phone or from the Web sites of the ratings companies. It's also best to look at the ratings from several different companies since the companies don't always agree. Independent research is superior to relying on information from the companies that sell annuities. They'll only share their best ratings.

Annuity rating agencies
AgencyWeb sitePhone
A.M. Best Company 439-2200
Fitch 75FITCH
Moody's Investor 553-0300
Standard & Poor' 438-7280
Source: Insurance Information Institute

Where to buy annuities
The monthly payout from an immediate annuity can vary a lot, depending on the source. Check to get a baseline price, but then get quotes from other highly rated providers. Be sure to look into annuities available through low-cost providers such as TIAA-CREF, Fidelity and Vanguard.

Here is a partial list of the companies that offer annuinities:



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