The Best Annuity Companies and How to Choose the Right Ones

Annuities are a bit like an ace up your sleeve. They’re one of the secrets to winning at retirement. Good annuities, used properly, can help create financial stability and eliminate worry.

But not all annuities are good annuities. Some companies charge policyholders hidden fees and some products are riskier than others.

Some sales agents may even engage in annuity fraud—they’ll trick you into buying a product that isn’t good for you or even sell you a product that isn’t real.

So, how can you make sure you’re buying a good annuity?

Lots and lots of research.

Luckily, we can help. We’ve compiled a list of the top annuity companies and annuity businesses to help you understand who the big players are and who has the best products.

In our view, Puritan Life is the best annuity company in the business, and Canvas Annuity has the best products around. But we’ll also share the other companies that are worth a mention. In this article, we provide a list of the best annuity companies out there, along with some pros and cons for each. We also provide some further advice for buying an annuity and choosing the right product for you.

Top Annuity Companies

We’ve done the research to find the best annuity companies based on the above features. After a thorough review, here are our picks, with the best listed first.

What To Consider When Selecting an Annuity Company

Who sells annuities?

Annuities are insurance products, offered by life insurance companies. They’re typically sold by insurance agents, investment brokerage firms, banks, and other financial services companies.

Remember that not all annuity companies are created equal. A good insurer has the following qualities: 

• It has good ratings from independent reviews. Pay special attention to reviews where policyholders mention difficulty withdrawing money from their annuity or having to pay hidden fees—these are red flags.
• It has low fees. Annuities sometimes get a bad rap for having high fees. While some companies, like Canvas, work hard to be transparent about all the costs of an annuity, others don’t. Some companies even try to hide their fees. Always look for a company that’s upfront about what you pay.
• It is financially healthy. Annuity contracts guarantee income, but that guarantee is only as good as the financial health of the annuity company. Try to choose a strong company. Credit rating companies, like AM Best, Moody's, and S&P (previously, Standard & Poor's), provide credit ratings to help you understand a company’s financial health. (For the record, Canvas is backed by Puritan life, a company with a very strong financial history.)

Using these factors as guidelines can help steer you toward reputable companies. That way, you can get a solid product and avoid annuity companies with poor business practices.

When To Purchase an Annuity

Annuities are for retirement, right? So should I wait until retirement to purchase an annuity?

Not necessarily! Yes, annuities provide retirement income. But the earlier you buy your annuity, the more time it has to grow, and the more income you’ll have when retirement finally rolls around.

To maximize the amount of money you have for retirement, you’ll want to invest as early as possible. It’s true that people typically buy annuities in middle age.

Canvas is trying to change that—ideally, even young adults are proactively planning their retirement.

That’s why Canvas sells annuities to anyone 18 years old and older. You’re never too young to start thinking about your financial future!

How To Buy an Annuity

To purchase an annuity, most insurance companies require you to talk to a sales agent. But that’s not always the case.

For example, at Canvas, you can buy an annuity online without talking to anyone (although, we encourage you to reach out to our licensed non-commissioned reps if you have any questions or want to learn more about our products).

Regardless of how you do it, the process of buying an annuity generally works like this:

Determine Your Financial Needs and Find a Suitable Product

This is the hardest part. You need to choose a product that fits your personal finance goals. This includes figuring out your risk tolerance.

For example, if you have a low-risk tolerance, you may want the lowest-risk product—one that guarantees your money to grow over the term of the annuity. With a low-risk tolerance, you may want a fixed annuity.

Or, if you have a high-risk tolerance, you may want a higher-risk product—one with the chance of a higher interest rate and the potential to lose money. With a high-risk tolerance, you may want a variable annuity.

Select the Best Annuity Provider

Choose a top-rated annuity company that is transparent. Try to avoid a company that pays commissions to their agents to avoid undue pressure for a product that doesn’t suit you.

Read the Contract

Once you find a suitable annuity, always read the contract carefully before you buy it. That way, you understand all the details, including the fees.

Complete the Application

Once you’re ready to buy, complete the application form. Canvas allows you to complete the application 100% online in minutes. The company will review the application form to ensure that you’re a good fit for the product.

Transfer the Funds

Depending on the type of annuity, you may pay your premium in a single lump sum or in multiple payments over time. You may also rollover payment from an individual retirement account (IRA) or a brokerage account. Depending on how you fund, there may be different tax implications. It is always a good idea to talk to a tax advisor.

Use Your Free Look Period

Most annuity companies offer you a period of time to change your mind about your annuity. If you decide you acted too quickly and an annuity isn’t the best option for you at this time, you can get your money back with no penalties during the free look period.

Once you’ve bought your annuity, let it sit. Leaving your money alone lets it grow and helps you avoid any early withdrawal fees and penalties.

Of course, if you really need to, some companies including Canvas let you take out some money penalty-free to pay for long-term care expenses and hospital fees.

But in general, it’s best to leave it alone until you annuitize and convert it into periodic income payments At Canvas, we’ve made buying an annuity easy.

We are one of the first to offer annuities that you can buy completely online. With transparent contracts and zero account charges, we offer one of the most convenient annuity options in the industry!

Give Your Retirement Plan a Boost

For those that have them, annuities can feel almost too good to be true: You get an income in retirement without working.

You can sit around all day listening to your grandkids explain Tik Tok, and you still get a paycheck. Amazing, right?

That’s the benefit of planning for the future. Buy an annuity now, watch it grow over time, and enjoy your payouts in your golden years.

At Canvas, we offer no-nonsense annuity options that simply make good financial sense. We don’t pay our agents commission, and we don’t need to: Our products are good, so we don’t need to push them.

We have zero account charges or fees. And even with all that, our rates are among the highest out there. Get a start on your retirement planning today with a fixed annuity from Canvas. It could be the best financial decision you make.