Who Sells Annuities and What Each Type of Seller Offers

Annuities are sold by five main types of financial organizations

You can buy an annuity from an insurance company, a bank, a brokerage firm, a financial advisor, or a direct online platform. Each seller operates under different rules, charges different fees, and offers different products. The seller you choose affects what annuity options you see, how much you pay, and what support you get after you buy.

Insurance companies are the original annuity sellers and still dominate the market. Banks sell annuities but usually focus on simpler products. Brokerages and independent advisors offer wider ranges of products but may push higher-commission options. Online platforms have grown in recent years and often show lower costs, but they provide less personal guidance. Understanding who sells what helps you compare prices and know what questions to ask.

Key Takeaways

• Insurance companies sell the widest range of annuity types, including variable and indexed annuities, but their fees vary widely by company.
• Banks typically sell fixed annuities and when ready annuities, which are simpler products with lower complexity but fewer customization options.
• Brokerages and independent financial advisors can show you products from multiple companies, but they earn commissions that may influence which products they recommend.
• Online annuity platforms let you compare quotes from multiple insurers and often show lower costs, but you receive no personal information during the process.
• The same annuity product can cost significantly different amounts depending on which seller you buy it from, so comparing quotes across seller types matters.

Insurance companies: the primary annuity sellers

Insurance companies created annuities and remain the largest sellers. Companies like Fidelity & Guaranty Life, Athene, Equitable, Principal, and Voya all sell annuities directly to consumers and through advisors. They offer fixed annuities, variable annuities, indexed annuities, and when ready annuities. Each company sets its own rates, fees, and product features, so the same type of annuity costs different amounts at different insurers.

When you buy directly from an insurance company's website or call their sales line, you typically speak with a company representative who explains their products. When you buy through an advisor or broker, that intermediary earns a commission from the insurance company, which is built into the price you pay. Insurance companies are regulated by your state's insurance commissioner, not the federal Securities and Exchange Commission, though some of their products (like variable annuities) fall under SEC oversight as well.

Banks: simpler products, familiar institutions

Most major banks—including Wells Fargo, Bank of America, and regional banks—sell annuities through their branches or wealth management divisions. Banks typically focus on fixed annuities and when ready annuities because these products are straightforward and carry less regulatory complexity. A bank annuity often appeals to customers who already have savings accounts or mortgages there and want to keep their finances in one place.

Bank annuities are usually sold by bank employees who are not necessarily trained as investment advisors, so the sales process tends to be simpler and faster than at a brokerage. However, banks generally offer fewer product choices than insurance companies or brokerages. The bank earns a commission on the sale, which is included in your price. Banks are regulated by banking authorities, and their annuity sales are also subject to state insurance rules.

Brokerages and independent advisors: wider choice, commission-based incentives

Brokerage firms like Fidelity, Charles Schwab, and E*TRADE, as well as independent financial advisors, can show you annuities from multiple insurance companies. This means you can compare products and rates from different insurers in one conversation. Brokerages employ registered representatives or advisors who have passed licensing exams and are regulated by the Financial Industry Regulatory Authority (FINRA).

The trade-off is that brokers and advisors earn commissions on annuity sales, typically ranging from 3% to 10% of the purchase price depending on the product type. This commission is paid by the insurance company and built into the price you pay—you do not pay it separately, but it affects how much of your money goes into the annuity versus how much goes to the seller. Because of this commission structure, advisors may have an incentive to recommend products with higher commissions. Ask your advisor which products they recommend and why, and request a written explanation of their compensation.

Online annuity platforms: quotes and comparison, no personal information

Websites like when ready Annuities, Annuity.com, and Fidelity's online annuity tool let you enter your age, health status, and desired income, then see quotes from multiple insurance companies. These platforms do not sell annuities themselves; they connect you with insurers or brokers who do. Online platforms have grown because they show you side-by-side pricing and let you compare without speaking to a salesperson.

The advantage is transparency and speed—you can see multiple quotes in minutes and understand the price differences. The disadvantage is that you receive no guidance on which product fits your situation, no explanation of contract terms, and no ongoing support after you buy. Some online platforms earn referral fees from the insurers or brokers they connect you with, which may influence which quotes they show you first. If you use an online platform, treat the quotes as a starting point and then contact the insurers directly or speak with an advisor before deciding.

Direct sales representatives and captive agents

Some insurance companies employ captive agents who sell only that company's annuities. These agents work for the insurance company directly, not for a brokerage or independent firm. Captive agents know their company's products deeply and can explain features in detail, but they cannot show you competing products from other insurers. You see only what one company offers.

Captive agents are regulated by the state insurance commissioner and must pass licensing exams. They earn commissions from their employer, the insurance company. If you work with a captive agent, ask them directly whether they can show you products from other insurers. If the answer is no, you know you are seeing only one company's options and should compare with quotes from other sellers before deciding.

How seller type affects price and product choice

The same fixed annuity paying the same income can have different prices depending on where you buy it. Insurance company A might charge $250,000 to generate $1,000 per month for life, while insurance company B charges $260,000 for the same income. An online platform might show you both quotes, while a bank branch might show you only company A, and a captive agent might show you only company B.

Variable and indexed annuities have even wider price variation because they include optional features (called riders) that add cost. One advisor might recommend a product with $50,000 in riders, while another recommends the same base annuity with $20,000 in riders. The commission structure also varies: fixed annuities typically pay 3% to 5% commission, while variable annuities can pay 5% to 10%. Higher commissions do not mean a better product for you—they mean the seller earns more.

What to ask any annuity seller

Regardless of who you buy from, ask these questions: What is the total cost of this annuity, including all fees and commissions? Can you show me quotes from at least two other insurance companies for the same product? What happens to my money if the insurance company fails? What are the surrender charges if I need to withdraw money early? What optional features (riders) are included, and what do they cost? How much commission do you earn on this sale?

A seller who answers these questions clearly and in writing is easier to trust than one who avoids them. If a seller pressures you to decide quickly or refuses to put terms in writing, that is a sign to look elsewhere. You have time to compare, and the best sellers know this and welcome comparison.

Frequently Asked Questions

Is it cheaper to buy an annuity directly from an insurance company or through a broker?

The price is usually the same because the commission is built in either way. The insurance company pays the commission to whoever sells the annuity—whether that is their own sales team or a broker. The difference is that a broker can show you multiple companies' prices, while a direct company representative shows you only one. Use an online platform or broker to compare, then contact the lowest-priced company directly to confirm the quote.

Can I buy an annuity online and have it delivered to my house?

No. You cannot buy an annuity the way you buy a book online. Online platforms show you quotes and connect you with sellers, but you must complete the purchase through the insurance company or a broker. This involves providing financial information, proof of identity, and your signature (usually electronic). The process typically takes a few days to a week after you decide to buy.

What does it mean if an advisor is "independent"?

An independent advisor is not employed by a single brokerage or insurance company. They can recommend products from multiple companies and are not required to sell their employer's products. However, independent advisors still earn commissions on annuity sales, so ask them the same questions about compensation and product selection that you would ask any advisor.

Should I buy an annuity from my bank if I already have accounts there?

Convenience is not a reason to buy an annuity. Banks offer limited annuity choices, and their employees may not have specialized training in annuities. Compare your bank's annuity quote with quotes from at least one insurance company and one online platform before deciding. If your bank's product and price are competitive, then the convenience of one institution may make sense.

What happens if the insurance company that sold me an annuity goes out of business?

Each state has a guaranty fund that protects annuity owners if an insurance company fails. The protection limit varies by state but is typically $250,000 per person per company. Ask the insurance company or your advisor what your state's guaranty fund covers before you buy. This protection is separate from FDIC insurance (which covers bank deposits) and does not explore to investment performance—it covers only the company's failure to pay.