Choosing an annuity company is one of the most important financial decisions you’ll make — you’re trusting an insurance company to pay you income potentially for the rest of your life. The company you select matters more than the annuity type, because even the best annuity contract is worthless if the insurer can’t pay.
This guide compares annuity companies by financial strength, illustrative payout rates, fees, and reputation across every annuity type. Rates below are illustrative estimates as of September 2026 and change frequently — always request a current, personalized quote before deciding.
Best Annuity Companies at a Glance
Rates below are illustrative, as of September 2026 — request current quotes from each carrier before deciding. Inclusion in this table is not a recommendation; it reflects commonly cited carriers in this space.
| Company | AM Best Rating | Commonly Cited For | Illustrative 5-yr MYGA Rate | Illustrative Immediate Payout (65M, $100K) | Min. Purchase |
|---|---|---|---|---|---|
| New York Life | A++ | Overall strength, fixed annuities | ~5.0-5.5% | ~$670/mo | $10,000 |
| MassMutual | A++ | Fixed annuities, financial strength | ~5.0-5.6% | ~$660/mo | $10,000 |
| TIAA | A++ | Immediate/income annuities | ~5.0-5.5% | ~$690/mo | $10,000 |
| Northwestern Mutual | A++ | Whole life + annuity combinations | ~5.0-5.4% | ~$650/mo | $25,000 |
| Fidelity (FIAC) | A+ | Lower-cost variable annuities | ~5.0-5.4% | ~$655/mo | $10,000 |
| Vanguard annuity (via Transamerica) | A | Lower-fee variable annuities | — | ~$650/mo | $5,000 |
| Pacific Life | A+ | Indexed annuities | ~5.5-6.0%* | ~$645/mo | $10,000 |
| Allianz Life | A+ | Fixed indexed annuities (FIAs) | ~5.5-6.2%* | — | $20,000 |
Indexed annuities show cap rates, not guaranteed rates. Actual returns depend on index performance.
Best Annuity Companies by Type
Best for Fixed Annuities (MYGA)
Multi-Year Guaranteed Annuities (MYGAs) work like CDs from insurance companies — they guarantee a fixed interest rate for a set period with tax-deferred growth.
Rates below are illustrative — MYGA rates change frequently with the interest rate environment. Get a current quote.
| Company | AM Best | Illustrative 3-Year Rate | Illustrative 5-Year Rate | Illustrative 7-Year Rate | Surrender Charge | Min. Purchase |
|---|---|---|---|---|---|---|
| MassMutual | A++ | ~5.0% | ~5.3% | ~5.1% | Yes (declining) | $10,000 |
| New York Life | A++ | ~5.0% | ~5.3% | ~5.1% | Yes (declining) | $10,000 |
| Athene | A | ~5.2% | ~5.6% | ~5.4% | Yes (declining) | $10,000 |
| Global Atlantic | A | ~5.2% | ~5.5% | ~5.3% | Yes (declining) | $10,000 |
| Midland National | A+ | ~5.1% | ~5.4% | ~5.2% | Yes (declining) | $20,000 |
Why financial strength matters: For something you’ll hold for 5–7+ years, the issuer’s solvency matters as much as small rate differences between carriers. Prioritize A-rated or better insurers.
MYGA vs. CD comparison: A competitive 5-year MYGA can beat many 5-year CDs and grows tax-deferred. If you’re in a high tax bracket, the after-tax return may be meaningfully better — but compare actual current quotes, since both MYGA and CD rates move with the broader rate environment. See our best CD rates for current CD comparisons.
Best for Immediate Annuities (SPIA)
Single Premium Immediate Annuities convert a lump sum into guaranteed monthly income starting right away — essentially buying a personal pension.
Payout figures below are illustrative estimates as of September 2026 — get current quotes, as SPIA pricing changes daily with rates.
| Company | AM Best | Illustrative Monthly Payout ($100K, Age 65 Male) | Illustrative Monthly Payout ($100K, Age 65 Female) | Illustrative Joint Payout ($200K, Both 65) | Min. Purchase |
|---|---|---|---|---|---|
| TIAA | A++ | ~$690 | ~$650 | ~$1,150 | $10,000 |
| New York Life | A++ | ~$670 | ~$630 | ~$1,120 | $10,000 |
| MassMutual | A++ | ~$660 | ~$625 | ~$1,105 | $10,000 |
| Principal | A+ | ~$665 | ~$635 | ~$1,130 | $10,000 |
| Pacific Life | A+ | ~$645 | ~$610 | ~$1,080 | $10,000 |
Note on rankings: These payout rates shift frequently and can vary by 5-10% among A-rated insurers at any given time — always compare current quotes across several carriers rather than relying on a snapshot ranking. Inclusion in this table is not a recommendation.
Payout context: A $100,000 SPIA paying roughly $670-$690/month generates roughly an 8-8.3% annual payout rate. Because the payout blends return of principal and mortality credits (not just interest), it isn’t directly comparable to an investment return — but for retirees who live to or beyond average life expectancy, the annuity pays out more than they put in.
Best for Variable Annuities
Variable annuities let you invest in subaccounts (similar to mutual funds) with tax-deferred growth. The biggest concern: fees.
| Company | AM Best | Annual Fee (M&E + admin) | Fund Expense Range | Total Annual Cost | Investment Options |
|---|---|---|---|---|---|
| Fidelity Personal Retirement Annuity | A+ | 0.25% | 0.00–0.08% | 0.25–0.33% | Fidelity funds incl. ZERO |
| Vanguard Variable Annuity (administered via Transamerica) | A | 0.10–0.25% | 0.04–0.15% | 0.14–0.40% | Vanguard index funds |
| TIAA-CREF | A++ | 0.37–0.45% | 0.05–0.50% | 0.42–0.95% | TIAA + third-party |
| Industry average | — | 1.00–1.50% | 0.50–1.00% | 1.50–2.50% | Varies |
Why these providers stand out on cost: Most variable annuities sold through commissioned agents charge 1.5–2.5% annually in combined fees, which meaningfully reduces long-term returns. The providers above have total costs under 0.40% in many cases — potentially saving tens of thousands over 20 years, though confirm current fee schedules directly.
Variable annuity warning: Most variable annuities sold by insurance agents have fees of 2–3% plus surrender charges lasting 7–10 years. Compare total annual cost carefully — a low-cost provider can make a meaningful difference versus a taxable index fund portfolio; a high-cost one rarely beats it.
Best for Fixed Indexed Annuities (FIA)
Fixed indexed annuities offer returns linked to a stock market index (like the S&P 500) with a guaranteed floor (typically 0–1%) and a cap on upside.
Cap rates and participation rates below are illustrative — these change periodically and vary significantly by product. Confirm current terms before purchasing.
| Company | AM Best | Floor | Illustrative Typical Cap | Illustrative Participation Rate | Surrender Period | Min. Purchase |
|---|---|---|---|---|---|---|
| Allianz Life | A+ | 0% | ~8.5–11.5% | ~100% | 10 years | $20,000 |
| Pacific Life | A+ | 0% | ~7.5–10.5% | ~100% | 7–10 years | $10,000 |
| Athene | A | 0% | ~8.0–11.0% | ~100% | 7–10 years | $10,000 |
| North American (Sammons) | A+ | 0% | ~7.0–10.0% | ~100% | 7–10 years | $25,000 |
FIA reality check: These products are complex. The “0% floor” means you won’t lose money due to index declines in a given crediting period, but the caps mean you won’t capture full upside. Over long periods, FIAs commonly return in the low-to-mid single digits — less than a pure index fund portfolio in strong markets, but with principal protection from market losses. They’re best evaluated by conservative investors in or near retirement, alongside a fee-only advisor.
How to Evaluate Annuity Companies
Financial Strength Ratings Explained
| Rating Agency | Top Ratings | What It Means |
|---|---|---|
| AM Best | A++, A+ | Insurer can meet policy obligations for decades |
| Moody’s | Aaa, Aa1, Aa2 | Low credit risk |
| S&P | AAA, AA+, AA | Very strong financial security |
| Fitch | AAA, AA+, AA | Strong capacity to meet commitments |
Minimum commonly recommended: AM Best A+ or higher. You’re trusting this company to pay you income for 20–40 years. Consider whether a slightly higher rate from a lower-rated insurer is worth the added risk.
State Guaranty Association Protection
If an annuity company fails, state guaranty associations provide a safety net. Coverage varies significantly by state — verify your specific state’s limit at NOLHGA.com before purchasing:
| State (examples) | Coverage Limit (confirm current at NOLHGA.com) |
|---|---|
| Most states | Commonly $250,000 per person per company |
| A growing number of states (roughly 19, including) | $500,000 per person per company |
| New York | $500,000 per policy |
| California, Florida, and others | Limits and product-type distinctions vary — verify directly, as these are not uniform |
Most states also apply an aggregate cap (commonly around $300,000) across combined annuity and life insurance benefits for one person from the same insolvent insurer, even where the specific annuity limit is higher.
Strategy: If buying more than your state’s per-company limit in annuities, consider spreading purchases across multiple insurers to stay within guaranty limits at each.
Annuity Fee Comparison
| Fee Type | Fixed (MYGA) | Immediate (SPIA) | Variable | Fixed Indexed |
|---|---|---|---|---|
| Annual M&E fee | None | None | 0.10–1.50% | None (built into cap) |
| Admin fee | None | None | 0–0.30% | None |
| Fund expenses | N/A | N/A | 0.04–1.00% | N/A |
| Rider fees | N/A | N/A | 0.25–1.50% | 0.50–1.50% |
| Surrender charge | 1–5 years | None | 5–10 years | 7–10 years |
| Commission (paid by insurer) | 1–3% | 1–4% | 5–8% | 5–8% |
The commission problem: Agents can earn 5–8% commission on variable and indexed annuities. A $200,000 indexed annuity could generate $10,000–$16,000 in commission. This creates an incentive to sell complex, high-fee products. Consider a fee-only advisor, or a lower-cost direct provider, to reduce commission-driven recommendations.
How Much Income Will an Annuity Provide?
SPIA Monthly Payout by Purchase Amount (Age 65, Male, Life-Only) — Illustrative, September 2026
Get a current quote — these figures change with interest rates and vary by insurer.
| Purchase Amount | Illustrative Monthly Income | Illustrative Annual Income | Approx. Payout Rate |
|---|---|---|---|
| $50,000 | ~$340 | ~$4,080 | ~8.2% |
| $100,000 | ~$680 | ~$8,160 | ~8.2% |
| $200,000 | ~$1,360 | ~$16,320 | ~8.2% |
| $300,000 | ~$2,040 | ~$24,480 | ~8.2% |
| $500,000 | ~$3,400 | ~$40,800 | ~8.2% |
SPIA Breakeven Analysis (Illustrative)
“Breakeven age” is illustrative and depends on the specific payout rate quoted, which varies by insurer and date.
| Age at Purchase | Illustrative Monthly Payout Rate | Illustrative Breakeven Age | Average Life Expectancy (approximate, general population) |
|---|---|---|---|
| 60 | ~7.0% | ~74 | ~83 |
| 65 | ~8.2% | ~77 | ~84 |
| 70 | ~9.2% | ~81 | ~86 |
| 75 | ~10.7% | ~84 | ~88 |
At every age shown, average life expectancy exceeds the illustrative breakeven age — meaning, on average, the annuity is projected to pay out more than the premium. Individual results depend heavily on your personal health and longevity, which vary widely.
Should You Buy an Annuity?
| Your Situation | Worth Considering? | Why |
|---|---|---|
| Need guaranteed income in retirement | Often yes | SPIAs provide pension-like payments |
| Want tax-deferred growth (high bracket) | Often yes | Competitive MYGAs can beat CDs on an after-tax basis |
| Worry about outliving savings | Often yes | Lifetime income addresses longevity risk |
| Under 50, saving for retirement | Generally no | Max 401(k) and Roth IRA first |
| Small portfolio (under $100K) | Generally no | Need liquidity — don’t lock it up |
| Comfortable managing withdrawals | Maybe | Bucket strategy may work better for you |
| Agent pushing variable annuity | Use caution | High fees are common — compare against low-cost providers and index funds |
For a complete guide, see our annuities explained page.
How to Buy an Annuity
| Method | Pros | Cons | Best For |
|---|---|---|---|
| Fee-only financial advisor | Unbiased, no commission | Advisory fee ($1,500–$5,000) | Complex situations |
| Fidelity/Vanguard/Schwab | Lower fees, no commission on some products | Limited product selection | Lower-cost variable annuities |
| ImmediateAnnuities.com | Compare quotes from multiple insurers | Still uses commissioned agents | Shopping SPIA rates |
| Insurance agent (independent) | Access to many companies | Commission incentive | Fixed/MYGA annuities |
| Captive agent (single company) | Deep product knowledge | Only sells one company | If you already chose the company |
Recommended approach: Get quotes from an online marketplace to compare rates, then validate with a fee-only financial advisor before purchasing.
Frequently Asked Questions
Can I cancel an annuity after buying it?
Most states have a 10–30 day “free look” period where you can cancel for a full refund. After that, surrendering the annuity triggers surrender charges (typically 7–10% in year one, declining annually). MYGAs have shorter surrender periods (3–7 years). SPIAs generally cannot be cancelled once payments begin.
Are annuity payments taxed?
It depends on how you funded the annuity. If purchased with after-tax money, a portion of each payment is a tax-free return of principal (exclusion ratio). If purchased with pre-tax money (like a 401(k) rollover), the entire payment is taxable as ordinary income.
What happens to my annuity when I die?
For life-only SPIAs, payments stop at death — remaining money stays with the insurer. For “life with period certain” SPIAs, payments continue to a beneficiary for the guaranteed period. MYGAs and deferred annuities pass to beneficiaries minus any applicable taxes.
Before shopping, review immediate annuity guide (SPIA) and fixed vs. variable annuity to know which product type you need. Return to the Annuities Guide hub.
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