If you're interested in an annuity to ensure a guaranteed income stream in retirement – but aren’t sure where to purchase it – you’re not alone. To begin with, annuities are fairly complex financial products. On top of that, hundreds of companies offer annuities, and most people don't know how to research and evaluate them to choose the product that will best meet their financial needs.

Here, we'll provide some basic facts about annuities for retirement. We’ll also explain what to consider when evaluating life insurance companies that offer annuities. That can help you find a highly-rated and financially solid provider that offers the right products for your specific needs – and provides outstanding customer service and support. Here’s what we’ll discuss:

  • What to look for in an annuity company

  • How to understand the financial ratings of an annuity company

  • What are the most common types of annuities

  • Why people choose Guardian for their retirement annuities

What to look for in an annuity company

When looking into annuity companies, the first step is to focus on their financial stability. A company with a strong financial rating is more likely to fulfill its long-term commitments.

Next, you want a company that is transparent about its product offerings and will help you fully understand your annuity investment in terms of fees and conditions. Finally, you want a company that provides comprehensive and responsive customer service and support. In short, a company that is committed to addressing your concerns and aligning your financial goals with the right annuity benefits.

Understanding financial ratings of annuity companies

Annuity companies are rated by independent agencies that assess their financial strength and stability so that investors, policyholders, and partners can have objective, expert evaluations with which to assess their options. Exemplary ratings indicate that a company can honor its financial commitments and pay its claims.

The most well-known rating agencies include A.M. Best, Moody’s, and Standard & Poor’s. These agencies evaluate factors such as a company's financial reserves, investment portfolio, profitability, and ability to meet long-term obligations to policyholders. Ratings are usually expressed in letter grades, with 'AAA' or 'A++' denoting the highest level of financial stability and solidity, and the highest confidence in a company's ability to honor its commitments. When considering your annuity options, it is essential to review these ratings as part of your research.

Ratings

We’re proud of being one of the most highly rated companies in the industry, earning the trust of our policyholders, investors, and partners.*

Aa1 High Quality

A++ Superior

AA+ Very Strong

99 out of 100

2 of 21 Moody's Investors Service

1 of 15 A.M. Best Company

2 of 20 Standard & Poor's

COMDEX**

Look at the range of annuity products offered

Once you feel comfortable with a company’s ratings and reputation, you should review their offerings to see if they offer the types of annuities that will best meet your financial and retirement needs.

Below are some common types of annuities offered by life insurance and annuity companies, including Guardian. Each offers specific features and benefits as follows:

  1. Immediate annuities: Also called an immediate income annuity, an immediate annuity provides a guaranteed stream of income right away (or within one year) in return for a single lump sum payment.

  2. Fixed deferred annuities: A fixed deferred annuity provides income at a future date (more than one year ahead) in return for a single lump sum payment or periodic payments. The payment or payments grow over time based on a fixed interest rate.

  3. Variable annuities: A variable annuity also provides income at a future date, but the initial payment(s) grow over time based on market investments rather than a fixed interest rate. It’s important to note that since they are tied to variable investments that can fluctuate, variable annuities provide fewer guarantees than other annuity contracts. While they may increase in value due to positive market performance, they also may decrease in value due to negative market performance.

  4. Fixed index annuities: A fixed index annuity provides income at a future date, and the initial payment(s) grow over time based on a specific market index. Unlike a variable annuity, a fixed index annuity protects your principal from losses by offering a minimum guaranteed interest rate in the event of negative market performance. Typically, fixed index annuities also cap your potential gains in the event of positive market performance. This may be considered the tradeoff for the extra protection offered.

  5. RILA annuities: Registered Index-Linked Annuities (RILA) are a new and relatively sophisticated type of annuity. RILAs are tied to a market index and, generally, offer less growth potential and downside risk than variable annuities, and more growth potential and downside risk than fixed indexed annuities. A RILA also lets you define the maximum losses you are willing to accept – and the more risk you’re willing to take on, the greater your potential for upside gains.

Again, it’s important to understand the features, benefits, fees, terms, and conditions – and any potential drawbacks – of a specific annuity before you make your purchase decision.

Why people choose Guardian

People choose Guardian for life insurance, annuities, and other retirement solutions because Guardian has been helping to ensure financial security for over 160 years. With high scores for financial soundness from independent rating agencies, our 12 million customers trust us to be there when they need us most.1 We have a five-star rating from NerdWallet2, and have been named one of the best life insurance companies by CNBC and U.S. News.3

How Guardian can help

If you’re thinking about annuities as part of your retirement savings plan or as a source of lifetime income, we hope that the information above will be helpful in getting you started. However, as you get deeper into the annuities purchase process, there will be issues that require you to consult a financial professional or financial advisor with specialized expertise. That’s where Guardian can help.

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Frequently asked questions about purchasing annuities

There’s no clear-cut way to identify the single highest-rated annuity company, as certain companies will consistently receive top marks from one or two agencies, and other companies may receive the highest rankings from others. Also, ratings can fluctuate based on the agencies' periodic assessments of each company's financial health and market performance. Rather than trying to identify the annuity company with the highest ratings, it might be advisable to go with a company that achieves consistently high ratings from multiple agencies over time.

Monthly income varies depending on the annuity. In addition, monthly income payments will be affected by a number of factors, most importantly, your age and life expectancy at the time you begin taking income. That said, an analysis of over 1,300 annuity products found that an immediate $100,000 annuity purchased at age 60 can be expected to pay approximately $508/month of income for life. If purchased at age 65, payments go up to $561/month; at age 70, $613/month.4

Annuities, like life insurance policies, involve long-term commitments and the management of longevity risk. Life insurance companies like Guardian can leverage their financial, actuarial, and risk management capabilities to determine appropriate annuity premiums and to ensure they can meet their obligations to annuity holders. By offering annuities, life insurance companies provide a product that helps individuals manage financial risk in retirement, much as life insurance helps manage the financial risks associated with untimely death.

1 https://www.guardianlife.com/about-guardian

2 Guardian Life Insurance Review 2024: Pros & Cons - NerdWallet

3 CNBC, Here are the 6 best life insurance companies of 2023, 2023

4 How Much Does A $100,000 Annuity Pay Per Month accessed July 2023

*https://www.guardianlife.com/financial-highlights

**Comdex is not a rating, but a composite of all ratings that a company has received from the major rating agencies (A.M. Best, Standard & Poor's, Moody's, and Fitch). Comdex percentile ranks the companies, on a scale of 1 to 100 (with 100 being the best). Ratings are as of December 31, 2023 and are subject to change. Ratings do not apply to the underlying investment options

Variable annuities (VA) and registered index-linked annuities (RILA) are long-term investment vehicles designed to help investors save for retirement and involve certain contract limitations, fees, expenses, and risks, including possible loss of the principal amount invested. The investment return and principal value may fluctuate so that the investment, when redeemed, may be worth more or less than original cost. As with many investments, there are fees, expenses, and risks associated with these contracts. These contracts are sold by prospectus only. A prospectus may be obtained by calling 888-Guardian (888-482-7342) or downloaded at guardianlife.com. Please read the prospectus carefully before investing or sending money.

All guarantees, including the death benefit payments, are dependent upon the claims-paying ability of the issuing company and do not apply to the investment performance of the underlying funds in the VA. Assets in the underlying funds are subject to market risks and may fluctuate in value. You can not invest directly in an index with a RILA.

This material is intended for general public use. By providing this content, The Guardian Life Insurance Company of America, The Guardian Insurance & Annuity Company, Inc. and their affiliates and subsidiaries are not undertaking to provide advice or recommendations for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact a financial representative for guidance and information that is specific to your individual situation.

All guarantees are backed exclusively by the strength and claims-paying ability of The Guardian Insurance & Annuity Company, Inc. (GIAC). Annuities are issued by GIAC, a Delaware corporation, and distributed through Park Avenue Securities LLC (PAS). GIAC and PAS are wholly owned subsidiaries of The Guardian Life Insurance Company of America (Guardian). Guardian, GIAC and PAS are located at 10 Hudson Yards, New York, NY 10001.

For more information about annuities, please contact your financial professional or call 888-GUARDIAN (888-482-7342).