Annuity Rates in Michigan

Current Annuity Rates in Michigan

Buying an Annuity in Michigan

If you are interested in purchasing an annuity, it’s important to remember that these products are regulated at the state level. Understanding how your state handles annuities — from what protections it has in place for its residents to how these products are taxed — can go a long way in helping you determine if an annuity is the right choice for you.

Michigan has enacted many of the standard regulations offered across several states to help protect annuity customers. So, when you buy an annuity in Michigan, you will have some safeguards in place to help ensure you are making the right decision.

Michigan’s robust consumer protection laws and regulations govern the sale and administration of annuities, providing added peace of mind for investors. These protections may include requirements for clear disclosure of fees and terms, suitability standards for sales and recourse options for consumers in case of disputes.

The state’s laws regarding creditor protection for annuities are particularly strong, shielding annuity assets from certain types of creditors or legal judgments. This can be especially valuable for individuals concerned about asset protection and estate planning.

This includes a mandated 10-day free look period, ensuring you the opportunity to thoroughly look over your contract and walk away from the annuity provider without penalty if you choose.

Michigan — like the vast majority of U.S. states — has also adopted the latest revisions to the NAIC Suitability Model Regulations, which work to protect customers from any potential predatory practices.

Only a handful of states have not enacted these revisions.

I have many clients in Michigan who have purchased annuities as part of their retirement planning. Annuities offer them tax deferral, safety of principal and an income rider to guarantee lifetime income. The state department of insurance provides guarantees similar to FDIC on bank deposits, regulating annuities as well. The potential tax savings and compounding earnings make annuities an attractive option for retirement planning.

I always advise my clients to diversify their product ownership, incorporating short-term and long-term investments, fixed and variable returns products and growth-based and income-based annuities. A sound financial plan goes a long way in ensuring consumers have a robust retirement strategy.

Aamir M. Chalisa, MBA, LUTCF, MDRTGeneral Manager at Futurity First Insurance Group

Aamir M. Chalisa is the GM at Futurity First, leading Oak Brook’s top branch. With 30+ years’ expertise, chairs GAMA Global, driving diversity worldwide.

Regulations/Tax Implications in Michigan

Michigan currently has a state income tax rate of 4.25%, which stacks up reasonably well with other regions of the country. This means that you will likely get more out of your annuity in Michigan than you would in a state like New York or California.

Additionally, the Tax Foundation rated Michigan 12th in its State Business Tax Climate Index.

The Michigan Life & Health Insurance Guaranty Association is also available to protect consumers, which provides another layer of protection for policyholders within the state.

Michigan Resources

Michigan’s state websites offer a lot of information on annuities for potential customers. Most of these resources are available through the Department of Insurance and Financial Services.

Michigan Government Annuity Resources

• General Information on Annuities
• Breakdown of Purchasing an Annuity

These resources provide consumers with an unbiased, vetted and reliable way to learn what they need to know about annuities in their state.

As mentioned previously, the Michigan Life & Health Insurance Guaranty Association is also active within the state and provides its own information and resources to consumers.