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Learn the truth behind 6 common annuity myths

As you learn about annuities, you may come across some common annuity myths. At F&G, we value transparency, and we’re prepared to clarify the facts. Let’s take a look at those annuity myths and get some answers.

1. “Annuities carry hidden fees.”

Depending on the type of annuity you purchase (immediate, fixed or fixed indexed), your policy could have no charges. But some annuities do have surrender charges on withdrawals taken during your surrender charge period. Some plans may offer options to take a portion surrender-penalty free.

Plus, some fixed indexed annuities have additional fees with optional riders for guaranteed lifetime income, a specific growth rate, wealth transfer and healthcare. These features provide more benefits and can add more value to your policy.

2. “Annuities are complicated.”

Annuities with a guaranteed lifetime withdraw benefit work similar to Social Security or a pension. It can guarantee you a lifetime stream of income, subject to certain conditions and assuming no excess withdrawals are taken.

3. “Annuities are tied to the stock market, so I could lose my money.”

With a fixed indexed annuity, your money is not invested directly in the market. It’s linked to an index, so your account value will never be credited less than zero if that index decreases. Linking to an index provides the potential to earn interest, and your account value can grow if the index increases.

4. “If I buy an annuity, I don’t have access to my money.”

Many annuities allow for penalty-free withdrawals, though amounts in excess of the penalty-free amount may be subject to surrender charges.

Many F&G annuities include riders, at no additional charge, that give you penalty-free access to 100% of your money if you meet certain conditions in regards to terminal illness or nursing home or home health care. These liquidity features may vary by state. Talk with your financial or insurance professional about rider details and availability.

5. “When I die, the insurance company keeps my remaining money.”

Fixed and fixed indexed annuities that haven’t been annuitized have surrender charges waived if the annuitant dies. Any remaining account value is passed to the beneficiaries you named and usually avoids probate.

6. “I have to pay the financial professional out of my own pocket in order to buy an annuity.”

You are not required to pay the financial professional directly in order to buy an annuity. Your full premium is available to potentially earn interest from the annuity’s effective date. F&G products are only offered through our licensed insurance producers, who are compensated through commissions which are not deducted from the premium paid for the policy. To find a licensed producer in your area, visit fglife.com.


Do you have some questions about annuities? “Get answers to common annuity questions.”

No bank guarantee. Not FDIC/NCUA/NCUSIF insured. May lose value if surrendered early.

Annuities are long-term vehicles to help with retirement income needs.

Product features, including limitations and riders, vary by state. Optional provisions and riders have additional limitations, restrictions and may have additional charges.

Surrender charges and market value adjustment may apply to partial and full surrenders. Surrenders may be taxable and may be subject to penalties prior to age 59 ½.

Guarantees are based on the claims paying ability of the issuing insurer, Fidelity & Guaranty Life Insurance Company, Des Moines.

Interest rates are subject to change at insurer’s discretion and are effective annual rates.

This is a fixed deferred indexed annuity providing minimum guaranteed surrender values. You should understand how the minimum guaranteed surrender values are determined and the product features used to determine the values. Even though contract values may be affected by external indexes, the contract annuity is not an investment in the stock market and does not participate in any stock, bond or equity investments.

This document is not a legal contract. For the exact terms and conditions, please refer to the contract.