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Don’t Make Me Say I Told You So 182

It may also include costs associated with issuing, selling, and
administering an annuity contract. The industry average mortality
and expense fee is 1.36% of the contract value.

Annual record maintenance fee – This is for record-keeping and

communication costs, which include statements of investment
performance and account activity. The average fee is 0.13% of the

contract value.

Total fund operating expense – This pays for the professional

management of the annuity’s mutual fund subaccounts, as well as
investment-related services and operating expenses. The average

industry subaccount fee is 0.87%.

Average Contract Charges

Type of Expense Charge
Mortality and Expense Risk 1.36%
Annual Maintenance Fee 0.13%
Total Fund Expense 0.87%
Total Average Expense 2.36%

Source: Morningstar

Costs for Riders

There are also fees for optional benefits and guarantees, or riders,
which the annuity offers.

Chapter 4: Annuities

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