Annuities
Annuities in Minnesota
An annuity is a contract with an insurance company designed to provide tax-deferred growth or a stream of income, often in retirement. Learn the main types, how they work, and the trade-offs to weigh.
Last reviewed: August 29, 2026
An annuity is a contract between you and an insurance company. In its simplest form, you contribute money, either as a lump sum or over time, and in return the insurer provides tax-deferred growth and, when you choose, a stream of income that can last for a set period or for the rest of your life.
Annuities are often used to support retirement income planning: a way to turn savings into predictable income, or to grow money on a tax-deferred basis with certain protections. There are several types, including fixed, fixed indexed and variable, and they differ significantly in how growth works, what is guaranteed, and what they cost.
Because annuities are long-term contracts that can include surrender charges and riders, it is worth understanding them clearly. Charlie can walk through whether an annuity fits your retirement picture, and just as importantly, when it does not.
Who this coverage is often a good fit for
- People approaching or in retirement who want predictable income
- Savers who want tax-deferred growth beyond other retirement accounts
- Those worried about outliving their savings
- Buyers who want certain protections and are comfortable with a long-term contract
How it works
You fund the annuity
You can fund an annuity with a single lump sum or a series of payments, depending on the contract. This is the accumulation phase.
Money grows tax-deferred
Growth inside the annuity is generally tax-deferred until you withdraw it. How growth works depends on the type: fixed (set rate), fixed indexed (tied to an index with caps and floors), or variable (tied to investment subaccounts). Variable annuity availability depends on appropriate licensing, product access, and carrier availability.
You choose how to take income
When you are ready, you can annuitize or use income options to create a stream of payments for a set period or for life. This is the payout phase.
Riders and charges apply
Annuities can include optional riders (such as income or death benefit riders) that add features for a cost, and many include surrender charges for early withdrawals within a defined period.
What it may cost
Premiums are set by the insurer when you apply, based on your specific situation. Rather than publish numbers that may not apply to you, here are the factors that drive the price.
Illustrative Rate Examples
Real premiums are set by the insurer at application, so this site does not publish sample rates until each figure can be tied to a current quote and its assumptions. When rates are shown here, they will list the factors below along with the carrier and effective date.
- The type of annuity (fixed, fixed indexed, variable)
- Current interest rates and, if indexed, caps and participation rates
- Your age and when you start taking income
- Optional riders you add
- Surrender charge schedule and contract length
- The specific insurer and contract
Guarantees in an annuity are backed by the claims-paying ability of the issuing insurance company. Riders add features and cost. Review surrender periods and how income is calculated before purchasing.
Pros and cons to weigh
Advantages
- Tax-deferred growth on contributions
- Options for guaranteed income you cannot outlive
- Fixed and fixed indexed types offer principal protection features
- Can complement other retirement income sources
Trade-offs to weigh
- Long-term contracts with surrender charges for early withdrawal
- Fees and rider costs can reduce returns, especially on variable annuities
- Growth on fixed indexed types is limited by caps
- Complexity means the wrong product can be a poor fit
Annuities are long-term contracts
Not sure if this is the right fit for you?
A short, no-pressure conversation with Charlie is the fastest way to understand what you actually qualify for and what it would cost.
Frequently asked questions
What are the main types of annuities?
The common types are fixed (a set interest rate), fixed indexed (interest tied to a market index with caps and floors) and variable (tied to investment subaccounts, with more risk). They differ in how growth works and what is guaranteed. Availability of variable annuities depends on licensing and product access.
Can an annuity really pay income for life?
Yes. Many annuities offer income options, including lifetime income, that continue as long as you live. The amount depends on the contract, your age, the amount you put in and any riders. Lifetime guarantees rely on the insurer's claims-paying ability.
What is a surrender charge?
Most annuities include a surrender period, often several years, during which withdrawing more than a set amount triggers a surrender charge. This is one reason annuities are meant for money you will not need in the short term.
Are annuities right for everyone?
No. Annuities fit specific goals, such as guaranteed income or tax-deferred growth for long-term money. They are not ideal for funds you may need soon or for someone who has not yet used simpler options. A candid review is the best way to decide.
Keep learning
Licensing and professional information
- Agent
- Charlie Brown, Independent Insurance Broker
- Agency
- Brightside Financial
- National Producer Number (NPN)
- 22266568
- Minnesota insurance license
- #41044475
- Lines of authority
- Life and Accident & Health
You can verify any insurance producer through the Minnesota Department of Commerce before you buy a policy. Any reference to licensing is not an endorsement by the Minnesota Department of Commerce or any government agency.