YOU ASK:

What is the definition of Annuity Insurance Charges?

WE ANSWER:

The Annuity Insurance Charges pays for the life insurance component of the annuity. This means the cost regarding mortality, as well as expense risk costs and other administrative insurance charges.  The life insurance component of the annuity usually charges around 1% of the annuity's value.

The Annuity Insurance Charges form part of the basic fees levied by annuities. Other charges include administrative charges, sales commissions, management charges and so on.  These fees are part of the computation in finding out the annuity payment amounts as well as the interest.  It would do good to look at these expenses when determining the best annuity.

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