A type of insurance that pays out a fixed sum to the holder every year, annuities can be a great product for people who want to receive a regular income stream for the rest of their lives. But, this kind of contract can come with some hidden surprises.
Some notoriously high fees include commissions by the people who sell the annuities. These charges can soar as high as 10 percent, reported CNN Money. There are also surrender charges, which are implemented if you decide to pull out money in the first few years. These fees can range from 7 percent to 20 percent in the first year.
Additionally, annual insurance fees, investment management fees and insurance rider fees on annuities can cost you a significant amount.
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