NAIC annuity buyer's guide: proposed changes for 2026

The National Association of Insurance Commissioners (NAIC) is rewriting its buyer's guide to deferred annuities, the plain-English booklet shoppers are often handed alongside a contract. Comment letters filed on September 18 show where the debate is: how illustrations are explained, how lifetime income actually works, and what rights you have once the contract arrives.

Nothing is final. But each proposal points to a question you can ask about any annuity offer today, whether or not the new wording is ever adopted. Here is what was proposed and how to use it.

Review status, October 13: The September 24 agenda scheduled discussion of comments on the August 3 draft. At our October 13 check, the working-group page listed no later meeting and no posted minutes, revised draft or adoption notice. The revisions discussed below are proposals.

A concrete example: what happens at the minimum rate?

The illustration definition in the NAIC's published fixed deferred annuity guide tells readers: Ask what is guaranteed and what isn’t. It also directs them to ask which assumptions the illustration uses.

The proposed illustration section in the American Academy of Actuaries' submitted draft asks: What does the accumulation value look like if I get the minimum credited interest rate? It also asks readers to consider the effect of flat or falling markets. Accumulation value means the value building up inside the contract; it may differ from what you can receive by surrendering it.

In plain terms: today's guide tells you to ask about assumptions. The proposed version tells you which scenario to ask for, the one where the contract earns only its minimum.

That matters when you compare offers. A bigger projected balance does not make one contract better than another, because the two illustrations may rest on different assumptions. Ask for each contract's guaranteed values and charges, and compare those side by side. An illustration is a what-if, not a forecast.

Lifetime income: ask how the payments would work

A September 18 industry response asks for more explanation of lifetime-income benefits, particularly benefits accessed through riders. The letter comes from the Insured Retirement Institute, American Council of Life Insurers, Committee of Annuity Insurers and National Association for Fixed Annuities.

The distinction matters in practice. Annuitization generally exchanges control of the value being annuitized for scheduled payments and is usually irrevocable. Some contracts offer a rider permitting lifetime withdrawals without annuitization. FINRA explains both arrangements, including their different costs and restrictions.

If an offer describes lifetime income, ask which arrangement produces it. Then ask what happens if you need an additional withdrawal, and what your beneficiary would receive after your death. Those answers depend on the contract and payout option. Our income rider versus annuitization guide explains the differences to discuss with a licensed professional.

Buyer rights: use the contract-review period

Michigan's Department of Insurance and Financial Services says its September 18 recommendations, developed with NAIC consumer representative Brenda Cude, aim to simplify the guide and strengthen its explanations of rights after purchase.

One existing protection to check is the free-look period. The SEC's annuity guidance says state law gives buyers time to reconsider after receiving the contract, usually 10 to 30 days. The contract should state the applicable period and return instructions. Check the actual deadline promptly.

Use that time to compare the issued contract with the documents discussed during the sale. Identify the exact product, any riders, the withdrawal provisions and the promised benefits. Ask the insurer or licensed professional to explain a mismatch while the review period is still open. Keep a copy of the explanation with your contract.

What an annuity buyer's guide cannot tell you about an offer

A general guide cannot supply the surrender-charge schedule or withdrawal terms of a particular contract. The published NAIC guide also explains that a market value adjustment can raise or lower withdrawal proceeds, depending on its formula and interest-rate conditions. An advertised interest rate alone does not tell you what an early exit would pay.

For each offer, request the surrender-charge schedule and the rules for any withdrawals permitted without that charge. Ask whether a market value adjustment applies and how it is calculated. Our surrender-charge guide and annuity fees guide explain those terms.

Keep the insurer's obligation in view, too. As the SEC explains, the company's ability to honor its promises depends on its financial strength and claims-paying ability. Clearer wording helps a buyer understand a guarantee; the insurer still has to fulfill it.

Documents to bring to your next annuity discussion

Whatever the NAIC adopts, you can ask these questions now. Bring the buyer's guide, the product disclosure and any illustration you received, and ask:

• Illustration: Which figures are guaranteed, and what assumptions produce the rest? What does the value look like at the minimum credited rate?
• Income: Would lifetime payments come from annuitization or from a rider? What happens if you need an extra withdrawal, and what would your beneficiary receive?
• Getting out early: What is the surrender-charge schedule, how much can you withdraw each year without a charge, and does a market value adjustment apply?
• Free look: How many days do you have to review the issued contract, and how do you return it?

Our guide to buying an annuity covers the broader comparison process. Get the answers tied to the specific contract you are considering, in writing, before you sign.