How Do Annuity Companies Make Money?

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    Steve Savant
    Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
    The are 3 basic tax deferred annuity crediting methods: interest rate crediting, indice crediting and separate accounts using equity and bond investments. The annuity company makes money in their portfolio spread between what earn and what they credit to a policy as well as mortality costs. They also charge fees that generate income for the company.
    Answered on July 30, 2013
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