When it comes to most financial products, once you buy them, you’re committed. If you change your mind or the stock market falls, you won’t be able to cancel your stock or mutual fund purchase and get your money back. You can’t normally cancel a bank’s certificate of deposit (CD) without paying the penalty. Annuities aren’t like other investments. States require insurance companies to provide a “free look” period for annuities since they are very complicated. You can terminate the contract and receive a full refund from the insurer during that time. However, the canceled policy will not earn you any interest. Free Look Senior citizens in a few states must work for a more extended period. Only a few jurisdictions require a free look period for replacement-funded contracts, but not for new-money annuities. A free look is not necessary for at least two states. Furthermore, some insurers provide coverage for longer-term than is required. While you’re unlikely to employ the free look option, it gives you peace of mind. It allows you to analyze the annuity contract carefully and even seek advice from a trusted advisor. You can cancel without penalty if there’s anything you don’t like about it or if you’ve just found a better price in the meantime. If a catastrophic life event, like the death of a spouse or the loss of your employment, occurred soon after you purchased the annuity, you may be able to cancel it. Fixed-rate, fixed-indexed, variable, and income annuities are all covered under the free look provision. If you’re thinking about canceling your annuity, be sure you can meet the free look date by contacting your annuity agent or the issuing insurance company. The insurer must be notified in writing, and the policy must be returned. The advantages and disadvantages of employing a free look. You won’t need to terminate your contract if you compare products from multiple insurance firms before purchasing. If you didn’t, the free look period allows you the opportunity to do so. Several companies offer fixed-rate annuity rates that are adjusted regularly. Fixed annuity rates usually don’t fluctuate much from month to month When Is It Worth It to Cancel an Annuity? Now and then, the financial markets see a significant shift, for example, in September 2008. Then rates could skyrocket to the point that you’d be better off canceling and replacing it with a new, higher-paying annuity. Assume that rates rose unusually over the free look period, from 3% to 3.5%. In this situation, you’d recoup the $370 in lost interest in just nine months, and having a better rate would almost certainly be worthwhile.
Contact Information:
Email: [email protected]
Phone: 5167611515
Bio:
I have worked with Deloitte Partners, Directors and Principals for approximately 30 years, saving them considerable amounts of money on their Group Term Life Insurance Premiums. We have also addressed Long Term Care within Life Insurance and Fixed Index Annuities. The Annuities Guarantee fixed interest rates and Long Term Care doubling. Protected from any corrections in the stock market. Great for retirement planning.
