Introduction
Time is the most expensive commodity. When you lose it, it will not come back. If you have plenty of it, you stand a better chance in life. If you don’t have much left of it, there is nothing else you can do. Here, let’s see the Largest Annuity Companies.
Many would not understand what this would mean or imply. It simply suggests that one should never waste time, it will never come back. Make the most of time and reap what is sown by time itself. Again, many would be at a loss with this.
To make it bare to the minimum, think of a fruit seed. It will grow and bear fruit in time. From the first harvest, it is an unbreakable chain of cycles that will give extra income. That fruit tree, for discussion’s sake, lives up to 50 years then one has had 47 years of reaping the fruits.
That scenario will never happen if one enjoys the fruit tree in its first 5 years only. He/She passes away much earlier than the fruit tree. This is when one does not have enough time anymore. If, by some whip of the wand, one has ample time still then preparation for the future is a bee’s nectar.
The life of man and what he does with his future is of the essence. Not with nectar shall we stand to weather those coming years. It is with tools that we bear on our burden. Tools in their form. Intangible tools. Tools that are practical and sensible. There are several of them out there. One of which lurks in the shadows in its enormity is an annuity.
What Is Annuity?
An annuity is one product of any life insurance company. Not all life insurance companies have this product in their portfolio, though. The absence of which may be because of a reason or two which could be the size of the company. The size of the company will reflect the liquidity of the company itself.
A straightforward definition of annuity would be that it is a contract between an individual and an insurance company. This involves investing one’s money into the vaults of that insurance company and, in return, one will get a regular flow of income in due time. Annuity contracts will always be in guarantee, mostly.
There would be more questions in one’s mind than answers. We will slowly cover all that needs to be shed light on, one step at a time.
Types of Annuity. Like the flavors of ice cream, annuities come in many types, but for sure are more complicated than just mangoes and cream. At the top of the ladder, there are three primary types of annuities. There are sub-types below these that depend on the company that guarantees it, along with other factors that are known beforehand.
1. Fixed Annuity. The simplest of the annuities. It is a guarantee the invested amount put into this contract is at a fixed interest rate that, in most events, never fluctuates during the validity of the contract. Whether the investment is of a considerable amount, the rate is steady as always and the risks involved are very low.
2. Variable Annuity. This is the roller coaster of all annuities. It can either go up or go down in extreme manners. The invested money goes into a type of investment portfolio. This is a mutual agreement by both parties of the contract. If the portfolio performs on the positive side, payment for the annuity will increase substantially. It can also work the other way around. There is no guarantee of how much one will get from this type of annuity.
3. Indexed Annuity. Also goes by the names fixed-indexed, or equity-indexed. This is the hybrid of the previous two types of annuities. The type aims to lower the risk of the variable annuity and increase the income from a fixed annuity. It sits at ease in the middle. The beauty of this type of annuity is the higher fees compared with a fixed annuity.
The Time to Receive Your First Annuity. It is up to you when you want to receive your first annuity and thereafter. The free choice not only ends there but there are two choices for you to decide on.
- Immediate Annuity. If this is your choice, the first payment for the annuity will begin a full year after the signing of the contract and be paid for by the annuity owner.
This is best exemplified by a big lottery winner. He is not a big spender, but he still loves to spend sometimes. He deposits most of his winnings in an annuity account for immediate disbursement of funds. This is to stop him from impulse buying but gives an allotment of money for a year.
- Deferred Annuity. The first payment for the annuity will be in the future. This is, on the usual, the preferred choice for people who are working with the expectation to work until retirement. There are many conditions that the insurance company must deal with. But the commencement of annuity will be at the retirement age.
The insurance company, however, would like to play their card and will offer a long-term contract. Because of that, another concern comes to mind.
The Extent of Time to Receive Annuity. There are also two choices for a prospective annuity buyer here. One will have to imagine what one’s life will be like in the future, some thirty or fifty years forward.
- Lifetime Annuity. A stream of income for life, guaranteed for the annuity buyer. Sometimes, by the generosity of the life insurance company, an annuity will continue to the beneficiary even after the passing of the annuity buyer. Age and health are very important for the life insurance company in this one.
- Fixed-Period Annuity. A more precise name for this is the term-certain annuity. The annuity buyer chooses not for his entire life but for a definite amount of time, 20 or 30 years into the future. With this type, the life insurance company does not put a premium on the age and health of the buyer.
The Behemoths of Annuity.
One can not simply walk into the office of a life insurance salesperson to buy oneself a contract of the annuity. Perhaps a sister or a close friend works at an insurance company and you help them out. Unless the company your sister works for is at the top of the list, then that is okay. If not, it is not fair on your part if you have not thought about it.
Here is a short list of life insurance companies in the United States. Ranked from highest to lowest in terms of direct annuity totaled for a certain year where the two previous consecutive years have no data yet released. The number beside the name is the total amount of annuities for the year.
1. Prudential Financial. ($26.52B).
This is the top in terms of the annuity, and by a mile from the second. This life insurance company started its roots in 1875 in Newark, New Jersey, by a man who later became a senator of the US Senate, John F. Dryden.
It had a funny name at the start and it also had a very cheap weekly premium for its insured. The Widows and Orphans Friendly Society, as was its previous title back then, only collected three cents a week from each of its customers.
It is now the biggest life insurance company in the United States, with over 40,000 employees. It operates in four of the seven continents in the world; North and South America, Asia, and Europe. Forays are now afoot into the African market.
It has hundreds of subsidiaries under its wings and has an array of products available. There are no relations with the UK Prudential plc which owns the American Jackson National Life, a competitor which is number 3 on this list.
2. American International Group (AIG). ($18.37B).
Cornelius Vander Starr traveled to Shanghai and set up his mission to make a mark in this world. The company, American Asiatic Underwriters, was born. It is now present in 80 countries around the world with almost 50,000 employees.
Based in New York, New York, the company has a concentration on only investments and insurance to cater to individuals, businesses, and enterprises. Despite the small product line, it is the second in terms of annuity in the United States.
Above that, AIG, the mother company, has a considerable number of subsidiaries all over the world. Two of these subsidiaries, however, changed hands with Prudential Financial a decade ago. Probably because of its history, the company also has a Chinese insurance subsidiary.
3. Jackson National Life. ($17.63B).
With just less than a billion-dollar difference from the second placer in total year annuity, this is something this company should be very proud of. It is far too smaller than the first and second placer with just over 4,000 employees and only two handfuls of subsidiaries underneath it.
It is, however, enormous in its total assets, which has grown to a little over a third of a billion dollars. It has an army of over 3,000 associates to cater to individuals and businesses.
Founded in 1961 by A. J. “Tony” Pasant and based in Lansing, Michigan, it is now owned by the British insurance company Prudential plc which bought Jackson in 1986.
4. New York Life. ($17.07B).
The present-day New York Life started with the grant given by the state legislature of New York in 1842 to provide and sell marine and fire insurance to the public. The name of the company in the grant was the Nautilus Insurance Company.
The company started selling only after 4 years that marks their official founding. Not long after, they scrapped fire and marine insurance for life insurance and pleaded with the state legislature with their new name.
Today, the company is the third biggest life insurance company in the United States, with assets of over half a trillion dollars. With its 11,000+ employees, it has had recognition on the Fortune 500 list.
5. Transamerica Corporation. ($16.96B).
Founded in 1928 in San Francisco, California, just before the Great Depression, it started as a holding company for two financial companies. One is the forerunner of the Bank of America of today, and the other was an insurance company.
The company’s website, however, claims its history goes farther than that. It states that in 1904, Amadeo Giannini started a bank that started the long process towards the birth of Transamerica Corporation.
The company is now owned by another insurance company, not American but from Holland, Aegon. The company itself has transferred its headquarters from San Francisco to Cedar Rapids, Iowa. Even though it is now a subsidiary with subsidiaries, coming in at number 5 is no small feat in a competitive world.
6. Lincoln Financial. ($16.96B).
A group of men from Fort Wayne, Indiana, quietly gathered to form an insurance company with an honest intention to use the name and picture of the man where the company eventually adopted the name. They had to get permission from the family and Robert Todd Lincoln gave them the nod in 1905.
Lincoln comes in at the number 6 position, but looking deeper into the figures, numbers 3 to 6 have small margins between them. If we interpret it differently, four athletes from four different countries occupy the bronze medal.
Lincoln Financial had long reached the milestone of achieving a billion dollars of insurance in force. Of all times for it to happen was in the middle of the Great Depression. They are proud to say that they are one of the very few companies in all the United States that did not have to dismiss a single employee.
Its headquarter is in Radnor, Pennsylvania, and is on the list in the New York Stock Exchange.
7. Massachusetts Mutual. ($15.8B).
With its headquarters in Springfield, Massachusetts, it is one of the life insurance companies that were already present before the turn of the 20th century. And still survives with top ten performances. The company came about to be in 1851 in Springfield, where it still stands up to today.
The company, and its subsidiaries, is one of the biggest companies in America. It is on the list of Fortune 500 and not just once; we tell you. It has even bought a subsidiary of one of its competitors despite it already has its subsidiaries under it, both in the local and international scene.
Considering the location of its headquarters as compared to New York or California and a performance deserving the number seven spot, it is commendable with what the company’s financial advisers have done. This is one of those companies that will get the sweat out of the competition.
8. TIAA-CREF. ($15.14B).
This is the Teachers Insurance and Annuity Association of America–College Retirement Equities Fund. A financial institution that got what it needed to start from the Carnegie Foundation. The group received a one million dollar endowment from the famous foundation in 1918.
Many would have the perception that this is a non-profit organization, but it is not in reality. It is the brainchild of Andrew Carnegie himself to help the plight of teachers and the related professions during that time.
It has grown to what it is today, with not just teachers among its fold. The company is number 8 on the list for not just any reason. It is a trusted brand and has withstood the rigors of history.
Conclusion
We do not intend to influence somebody’s decision on which of these companies to buy from. The list is short, and it is not a representation of the much larger list of these types of companies. It is solely by the annuity buyer to choose which door to take.
Back then, one could say it was the glory days of the industry. That was not a very long time ago, just about 30 years past when there were over two thousand life insurance companies all over America. Did the Americans had so much money back then? Were there a lot of buyouts, mergers, or plain acquisitions in those days?
There are now less than 800 life insurance companies in the United States. If you are one, you definitely would want to have a splendid array of products for the customer to choose from. An annuity should be on the list.
Company turn-overs may be on the rise since people, droves of them and increasing every year, are moving over to the digital world for more than a decade past without the security of what their life will be by age 60.
To the young of today, this is a tool you must provide yourself with the utmost importance. It may trickle down to your immediate family members when you get to that age, but to you first.
Life insurance is not a small business like a personal injury legal company which we do not demean. There are local and state regulations a life insurance company must meet more than other small businesses.
Questions Most Frequently Asked.
1. Can I buy directly from an insurance company and not a middleman?
Yes, you can. All life insurance companies, however, prefer you go through an associate or advisor. You might think this is an added cost, but it is not. The reason for this is personalized attention to your account. The advisor will earn from the company’s earnings, giving you nothing to worry about.
2. Does life insurance companies have a mobile application?
Yes, most of the companies have mobile applications that will connect you with your account. This is the modern world, and it is digital life. If there is none, however, you either have to go to their nearest office or find another insurance company.
3. Do I need to have an online account with a life insurance company?
If you are not savvy with it, or if your eyes do not seem to see properly now, you do not have to open an online account. It makes things easy and fast for those who do not have any difficulties as yet. Let your child or grandchild ask them through the phone.
4. I want to buy a contract for an annuity, but they do not have an office in my city?
You can buy an annuity contract through their accredited advisor or associate in your area. They may not have an office in your city, but the accredited advisor or associate is the legal representative for them instead, for the absence of an office.
5. Can I sell my annuity contract?
Yes, you may sell your annuity contract to any person you can arrive to deal with. If you intend to sell, the current or future payments in their entirety or in portions of what you will receive are your options for selling.
6. Does talking with a financial advisor cost anything?
Absolutely nothing at all. They are there to help those who need clarifications or clear a path for them towards their goal. Such interaction will cause a co-created, ideal situation for the annuity buyer.
7. Who are my beneficiaries?
These are your family members that you want to receive the money in the event of your passing away. But these can also be other entities that you prefer to receive the annuity other than your family, for what reason you may ever have. A detailed discussion with your financial advisor is in line with this topic.
8. How much can I withdraw from my annuity?
The owner of an annuity contract may withdraw a certain amount from his account. The maximum of which is, in the common practice, ten percent. If, however, you need more than just 10 percent, there will be fees to absorb for that. Such charges depend on the company you bought your annuity from.
9. Can somebody else withdraw funds from my annuity contract?
Nobody else can withdraw money except the contract owner himself. This is to ensure the safekeeping of the funds. A third party may arise only in the instance when the contract owner has given authority.
10. Instead of getting cheques, can I receive my annuity straight into my bank account?
Yes. It is common for companies to do this by electronic transfers, but you need to accomplish certain documents to accomplish this. An online account with the company is helpful.
The more complicated queries will have to find another source for inquiry with an understanding of the subject, like a financial advisor.
