Work through this sheet with your latest annuity statement in hand. Four questions, three decoded numbers, about five minutes — and you will know more about your contract than most owners ever do.
Free · Educational · Bring your latest statement
Most annuity statements show at least three different values, and owners routinely mistake one for another. Find all three on yours:
Contract value (sometimes “accumulation value”) — the running total inside the contract, after credited interest or market performance and after fees come out. It is the number that grows or shrinks — but it is not what you would walk away with today.
Surrender value (sometimes “cash surrender value”) — what you would actually receive if you cashed the contract out today: the contract value minus any surrender charge still in force, and before any taxes. Early in a contract this can be thousands less than the contract value. This is your real exit price.
Income base (sometimes “benefit base” or “guaranteed withdrawal base”) — a bookkeeping number that exists for one purpose only: calculating your guaranteed lifetime income payments, if your contract has an income rider. It often grows at a stated rate that looks generous — but you cannot withdraw it, cash it out, or leave it to anyone as a lump sum. It is a measuring stick for income, not a pile of money.
The one-sentence version: contract value is the scoreboard, surrender value is the exit price, and income base is the ruler your future income checks are measured with.
1. What do I actually own — and what is it costing me? Find your contract type (fixed, fixed indexed, or variable) and list every rider attached to it. Each rider — income, death benefit, long-term care — carries its own annual charge, often a percentage of the income base rather than the contract value. Add them up. If your statement does not show them clearly, that is itself an answer worth having.
2. What will it pay me? Look in three places: the guaranteed income amount if you turn on the income rider (and at what age it pays best), the death benefit as it stands today (not the day you bought it), and the do-nothing path — what the contract projects if you simply leave it alone. Guaranteed figures and illustrated figures are different animals; know which one you are reading.
3. Where am I in my surrender period? Most contracts charge a penalty for leaving in the early years — commonly starting around 7–10% and stepping down to zero over 6–10 years. Find your contract's anniversary date and its surrender schedule. The gap between your contract value and surrender value tells you exactly what leaving today would cost, and the schedule tells you when that cost disappears.
4. Is it still doing the job I bought it for? You bought this contract for a reason — safety, income, growth with a floor, something for the grandkids. Write the reason down in one sentence. Then ask whether the contract, as it stands today, is still the cleanest way to do that job. Sometimes the answer is yes, and you can file the statement away in peace. Sometimes the reason itself has changed — retirement arrived, a spouse died, income needs moved — and the contract never got the memo.
☐ Your latest annuity statement (the whole thing, not just the summary page)
☐ The contract itself, if you still have it
☐ This sheet, with anything you could not answer circled
☐ Your questions — including the one you think sounds basic. There are no basic questions about your own money.
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This sheet is educational material from Reserve Investment Group, Inc. It is not tax or legal advice and not a recommendation to buy, sell, surrender, or exchange any contract. Figures on your statement that are labeled illustrated, hypothetical, or projected are not guarantees; annuity guarantees rest on the claims-paying ability of the issuing insurer.
