Bonus Credits for Annuities

In an attempt to attract purchasers, some insurance companies offer variable annuity contracts with "bonus credits." A bonus credit is the extra amount an insurance company agrees to add to the value of your contract-usually a specified percentage (typically ranging from 1% to 5%) of the payments you make during a certain time period. While bonus credits sound like free money, variable annuities with bonus credits may have higher expenses that offset any gain.

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