Can a fixed deferred annuity have more than one value?

Question

Accepted Answer

Yes. Some fixed deferred annuities may use different accumulated values depending on which benefit you choose. While deferred annuities generally build value during the accumulation period, some contracts do not use one single value for every purpose. The NAIC guide explains that some annuities use different accumulated values to pay different benefits. That means the value available may depend on whether you take income, surrender the contract, or choose another benefit. For example, an annuity may use one value if you start annuity payments for retirement benefits and a different value if you surrender the annuity. Another example in the NAIC guide is a contract that uses one value for long-term care benefits and a different value if the annuity is surrendered. This matters because the benefit you choose can affect what amount is available to you. You do not receive more than one benefit at the same time. The NAIC guide says you get only one of the accumulated values depending on which benefit you choose. Before buying, review the contract carefully and ask how the annuity calculates value for each available benefit. The guide specifically suggests asking whether the accumulated value or the way interest is credited will change if you pick a shorter or longer payout period or surrender the annuity.