The 10 Best Annuity Companies of May 2023
| Company | Rating |
|---|---|
| Massachusetts Mutual Life Insurance Company |  |
| USAA Life Insurance Company |  |
| New York Life Insurance Company | |
| TIAA-CREF Life Insurance Company | |
| Allianz Life Insurance Company of North America |  |
| MetLife Annuities | |
| Pacific Life & Annuity Company |  |
| Prudential Financial—PRUCO |  |
| Securian Life Insurance Company |  |
| Western & Southern Life Assurance Company | |
Massachusetts Mutual Life Insurance Company
5.0
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A++
S&P Global Rating
AA+
COMDEX score (out of 100)
98
AM Best Rating
A++
S&P Global Rating
AA+
COMDEX score (out of 100)
98
Why We Picked It
The Massachusetts Mutual Life Insurance Company, MassMutual for short, has been in business since 1851. They are one of the oldest and largest insurance companies in the country. MassMutual’s headquarters are in Springfield, Mass., and the company operates nationwide.
MassMutual is our pick for the best annuity company because it has an incredibly secure financial foundation. The company has earned the highest possible AM Best rating, the second-highest possible S&P Global credit rating and a nearly perfect COMDEX score. MassMutual’s financial stability is supported by a very strong capital ratio.
MassMutual delivers fantastic customer service, and has an incredibly low customer complaint ratio. For annuities, MassMutual offers a full product selection including fixed, fixed index, variable and immediate annuities. Thanks to all of these benefits, MassMutual ranks as our pick for the top annuity company of 2023.
- Availability: All 50 states, the District of Columbia and Puerto Rico
- Customer complaints: 96% below average
- Annual Direct Premiums Sold: $10,415,834,474
- Capital Ratio: 5.43%
USAA Life Insurance Company
4.6
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A++
S&P Global Rating
AA+
COMDEX Score (out of 100)
99
AM Best Rating
A++
S&P Global Rating
AA+
COMDEX Score (out of 100)
99
Why We Picked It
USAA provides banking, insurance and other financial services to U.S. military service members and their families. This includes annuities sold by the USAA Life Insurance Company. USAA is known for going above and beyond for its members, which is evident by its low number of customer complaints. USAA is very financially secure, and its annuity products are available in all 50 states.
One big drawback of USAA is that not everyone can buy its products. To qualify, you must be a military service member, a veteran or the spouse or child of a USAA member.
When it comes to annuities, USAA’s product selection is also limited compared to other major life insurance companies. USAA only sells basic fixed annuities and immediate income annuities. However, if those are the products you want and you can qualify with USAA, it’s an excellent choice.
- Availability: All 50 states
- Customer complaints: 94% below average
- Annual direct premiums sold: $5,407,721,448
- Capital ratio: 4.76%
New York Life Insurance Company
4.5
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A++
S&P Global Rating
AA+
COMDEX score (out of 100)
100
AM Best Rating
A++
S&P Global Rating
AA+
COMDEX score (out of 100)
100
Why We Picked It
Founded in 1845, New York Life is another of the oldest insurance companies in the U.S. New York Life thrived for almost 180 years thanks in large part to its financial stability. This still applies today, as the company maintains a very healthy capital ratio and top scores from all the rating agencies, including a perfect COMDEX score.
New York Life specializes in selling life insurance and annuities. In 2021, it was the number one provider of deferred income annuities, fixed deferred annuities and principal-protected variable annuities according to data from Limra.
New York Life has a solid customer complaint ratio as well, showing overall good customer satisfaction. If you would like to sign up with New York Life, you can do so in all 50 states, as well as D.C. and Puerto Rico.
- Availability: All 50 states, the District of Columbia and Puerto Rico
- Customer complaints: 78% below average
- Annual direct premiums sold: $378,799,885
- Capital ratio: 5.73%
TIAA-CREF Life Insurance Company
4.3
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A++
S&P Global Rating
AA+
COMDEX score (out of 100)
99
AM Best Rating
A++
S&P Global Rating
AA+
COMDEX score (out of 100)
99
Why We Picked It
TIAA-CREF started offering retirement products and planning for teachers in 1918. Today, it still specializes in supporting employees working for nonprofits in fields like education, healthcare and government. While TIAA-CREF primarily focuses on group benefits through workplace plans, you can also sign up for its retirement products—including annuities—as an individual.
TIAA-CREF is very financially secure, shown by its high financial strength ratings across the board. It also scores highly for customer satisfaction, with 49% less customer complaints than average. TIAA-CREF offers a solid variety of different annuities and credits itself with the invention of the first variable annuity in 1952 to help keep pace with inflation.
- Availability: All 50 states and the District of Columbia
- Customer complaints: 49% below average
- Annual Direct Premiums Sold: $120,271,387
- Capital Ratio: 3.28%
Allianz Life Insurance Company of North America
4.1
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A+
S&P Global Rating
AA
COMDEX Score (out of 100)
97
AM Best Rating
A+
S&P Global Rating
AA
COMDEX Score (out of 100)
97
Why We Picked It
Allianz is one of the largest global insurers, and operates worldwide. The company sells annuities in the U.S. through Allianz Life Insurance Company of North America.
Allianz Life specializes in selling fixed index annuities, which offer growth based on a market index like the S&P 500, with some protection against investment losses. Allianz Life does not sell other popular products like fixed or variable annuities.
If you want a fixed index annuity, Allianz Life delivers excellent customer satisfaction. It has a low complaint ratio and scored well on J.D. Power’s 2022 survey for customer satisfaction. Allianz Life’s financial strength ratings are also solid.
- Availability: All 50 states
- Customer complaints: 89% below average
- Annual Direct Premiums Sold: $13,438,394,149
- Capital Ratio: 2.75%
MetLife Annuities
4.0
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A+
S&P Global Rating
AA-
COMDEX Score (out of 100)
95
AM Best Rating
A+
S&P Global Rating
AA-
COMDEX Score (out of 100)
95
Why We Picked It
MetLife is another stalwart of the U.S. life insurance industry, tracing its roots back to 1864, when it started by selling insurance to Civil War soldiers and sailors. Over time, MetLife grew into one of the largest life insurance and annuity companies in the country.
Today, MetLife primarily sells insurance, investment products and annuities through group benefit programs. It focuses on selling lifetime income products that can be used in workplace retirement plans, like a 401(k). MetLife is a major player in this sector, with a large market share and great customer satisfaction.
MetLife no longer sells annuities to individuals. It split this business off into a separate company, called Brighthouse Financial. If you’re interested in a MetLife Annuity, you’ll need to convince your company’s human resources to use them, or you’ll have to go through Brighthouse Financial.
- Availability: All 50 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico
- Customer complaints: 60% below average
- Annual Direct Premiums Sold: $14,188,072,260
- Capital Ratio: 2.14%
Pacific Life & Annuity Company
3.8
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A
S&P Global Rating
A
COMDEX Score (out of 100)
74
AM Best Rating
A
S&P Global Rating
A
COMDEX Score (out of 100)
74
Why We Picked It
Pacific Life launched over 150 years ago in Sacramento, Calif. It still has its headquarters near the Pacific Ocean, in Newport Beach, Calif. Pacific Life has since expanded to sell throughout most of the country. It does not operate nationwide though, missing some states primarily in the Northeast.
Pacific Life offers an excellent selection of different types of annuities including variable, fixed index, fixed and immediate annuities. Pacific Life also has the very best score for customer complaints. In fact, they didn’t receive a single one during the most recent year measured by the NAIC.
Pacific Life did lose some points for its financial strength ratings. While its AM Best and S&P Global scores were decent, it had a noticeably low COMDEX score. However, this is partly balanced out by its strong capital ratio.
- Availability: 42 states (AK, AR, AS, AZ, CA, CO, DC, GU, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MO, MS, MT, NC, NE, NH, NM, NV, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY)
- Customer complaints: 100% below average
- Annual Direct Premiums Sold: $376,811,959
- Capital Ratio: 4.11%
Prudential Financial PRUCO
3.7
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A+
S&P Global Rating
AA-
COMDEX Score (out of 100)
69
AM Best Rating
A+
S&P Global Rating
AA-
COMDEX Score (out of 100)
69
Why We Picked It
With annual premiums over $22 billion, Prudential is the largest issuer of annuities on our list. This makes sense as Prudential is also one of the largest global financial companies, ranking high in the Fortune 100.
Prudential sells annuities nationwide as well as in D.C. and Puerto Rico. It sells all the main types of annuities. It works with both individuals and workplace plans. Prudential also scores highly for customer satisfaction. It has both a lower customer complaint number as well as a high ranking on J.D. Power’s annuity customer satisfaction survey.
Prudential did not score quite as well in terms of financial strength. Its COMDEX score was especially low compared to the other major Fortune 100 insurers on this list like New York Life and MassMutual. Still, Prudential’s massive size and decent capital ratio means it should have plenty of assets to fall back on.
- Availability: All 50 states, the District of Columbia, Guam, the US Virgin Islands and Puerto Rico
- Customer complaints: 69% below average
- Annual Direct Premiums Sold: $22,089,305,004
- Capital Ratio: 4.78%
Securian Life Insurance Company
3.6
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A+
S&P Global Rating
AA-
COMDEX Score (out of 100)
96
AM Best Rating
A+
S&P Global Rating
AA-
COMDEX Score (out of 100)
96
Why We Picked It
Based out of St. Paul, Securian was the first insurance company to operate in Minnesota. Today, it is the ninth largest life insurance company in the U.S. Securian operates in all 50 states, plus D.C. and Puerto Rico.
Securian offers a full menu of annuities, selling all the main types of guaranteed income products. Despite operating nationwide, Securian has the smallest volume of annual premiums of the companies on this listing.
The company scores very well for customer service, earning an especially high COMDEX score. Its other financial strength scores are somewhat less impressive, especially S&P Global’s financial strength rating. Securian features a very high capital ratio, which balances out this low S&P Global grade.
- Availability: All 50 states, the District of Columbia and Puerto Rico
- Customer complaints: 78% below average
- Annual Direct Premiums Sold: $225,060,022
- Capital Ratio: 10.28%
Western & Southern Life Assurance Company
3.6
Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.
AM Best Rating
A+
S&P Global Rating
AA-
COMDEX Score (out of 100)
96
AM Best Rating
A+
S&P Global Rating
AA-
COMDEX Score (out of 100)
96
Why We Picked It
Western & Southern was founded in 1888 in Cincinnati, where it is still headquartered today. The company gradually expanded from Ohio by buying different insurers around the country. Today, Western & Southern operates in all 50 states, except for New York.
Western & Southern only sells fixed and variable annuities. Despite not offering other types of annuities, it still has considerable market presence. Western & Southern also received an excellent score for its customer complaints, showing high customer satisfaction.
Western & Southern received a very high COMDEX score for financial strength, as well as a decent AM Best score. It lost points in the ranking due to a lower S&P Global rating for financial strength, its relatively low capital ratio and its small size.
- Availability: The District of Columbia and all states except for New York
- Customer complaints: 98% below average
- Annual Direct Premiums Sold: $6,156,581,991
- Capital Ratio: 3.71%
Methodology
For this listing, Forbes Advisor began by identifying the 75 largest annuity companies in the U.S. based on annual direct premiums sold. We then tracked down the following information in order to build our evaluations, according to the following weightings:
- AM Best Financial Strenth Rating (15%): AM Best is an independent rating agency that specializes in reviewing insurance companies. It gives companies a letter grade based on their financial strength and ability to pay claims.
- S&P Global Financial Strength Rating (15%): Standards & Poor’s is another independent credit rating service. It focuses on companies of all types, not just insurers.
- Comdex Rating (15%): The Comdex rating system looks at how an insurer scored with the four main credit rating agencies: AM Best, Standard & Poor’s, Moody’s and Fitch. The Comdex score then summarizes this average in a single number, from 0-100, with 100 being the best.
- Total Number of States Licensed (10%): Annuity companies that operate in more states received a higher score, as they were more widely available.
- NAIC Complaint Index Score (20%): The National Association of Insurance Commissioners tracks how many complaints an insurer receives. It then gives a complaint index score, showing a ratio of how many complaints an insurer received relative to the average for insurance companies of the same size. An NAIC score below average is a good thing, as it showed an insurer did not receive as many complaints as others.
- Annual Direct Premiums Sold (10%): Annuity companies selling more annuity premiums were rated higher. We viewed a larger market footprint as a sign of success and availability. Larger companies can become too big to fail and would potentially be bailed out in a crisis, whereas smaller companies may not be.
- Capital Ratio (15%): Capital ratio was another measurement of financial stability. The capital ratio shows an insurer’s capital and surplus as a percentage of total admitted assets, excluding separate account assets. A higher ratio shows an insurer is in better shape financially.
Using this measurement, we gave each company a star rating out of five. The 10 highest ranked companies made the review.
How Annuities Work
Annuities are a type of insurance contract designed to turn your balance into future income. You can buy an annuity with a single lump sum payment or through many small payments over time.
The annuity may then grow your balance, according to the type of annuity you choose. When you are ready, you can turn your annuity balance into future income payments. You can select payments that last a set number of years or payments guaranteed to last your entire life.
How an annuity works for the investment return depends on the type of annuity:
- Fixed annuities earn a set return, guaranteed by the annuity company. You pick how many years you want the fixed annuity to last. The annuity company will then pay the return each year guaranteed. This type of annuity is similar to a bank’s Certificate of Deposit.
- Variable annuities allow you to invest your balance in subaccounts, which are like mutual funds. Your return will depend on the performance of the investments.
- Fixed index annuities are based on some sort of market index, like the S&P 500 or the Nasdaq. Your return each year depends on the index. However, a fixed index annuity sets limits on your potential gains and losses. Some even guarantee you will not lose money.
- Immediate annuities start your income payments right away. There’s no investment stage to grow your balance first.
Before buying an annuity, make sure you understand the pros and cons first.
How to Choose an Annuity
Annuities are long-term investments. If you change your mind and cancel within a few years, most contracts come with a sizable surrender charge penalty. That’s why it’s important to pick the right annuity company before buying. A quality annuity company should offer the following:
- Competitive returns and income. Each annuity company offers different investment rates, as well as performance and income guarantees. Make sure the one you buy is competitive.
- Low fees. The more you pay in annual fees, the less you receive from your annuity. Check that what you are paying is reasonable.
- Quality annuity features. Ideally, your annuity gives at least some early access to your money, where you can make a partial lump sum withdrawal without a penalty. Some companies also allow you to customize the contract through riders for extra benefits.
- Financial strength. You might be depending on your annuity to make payments for years, even decades. Your insurance company must still be in business to make these payments. For this reason, financial strength was weighted so heavily in our scoring.
- Customer satisfaction. You can get an idea how often an insurer receives complaints through its NAIC complaint index. You can also see whether a company scores highly in customer satisfaction through the annual J.D. Power survey for annuities. When you’re retired, you don’t want to spend time fighting on the phone trying to get payment issues fixed. The better the customer satisfaction rating with a company, the more likely you are to have few problems, or to have your problems resolved easily
Like with any investment, the right fit depends on your personal situation and needs. For help, consider meeting with a financial advisor that doesn’t earn a commission selling the products.
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