It’s important that the client reads the small print before signing an annuity contract. There can be various additional fees that might not be so clear. These include: the fee incurred for an early withdrawal which usually starts at 7 percent and then drops a percent each year until the seventh year; mortality fees of 1 to 1.35 percent of your account; maintenance fees of approximately $25 a year; investment advisory fees of between 0.3 to 1 percent. Sometimes – to your advantage – you have the option of a “bail-out” provision whereby the annuity can be cashed in when interest rates fall below a stated amount. As well, a “persistency” bonus rewards clients who keep their annuity for a set time frame.
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