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Vanguard Annuities Review


ConsumersAdvocate.org Rating: 4.9 / 5 (Excellent)
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The Vanguard Group is a privately-owned investment advisor. The company was founded in 1975 and is based in Malvern, Pennsylvania. The Vanguard Group is the second largest provider of ETFs in the world and the largest provider of mutual funds. In addition to ETFs and mutual funds, the company offers other investment products, as well as financial planning services.
 
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How is Vanguard rated?

Breakdown

4.9/5
Policy Features
4.9/5
Fees and Commissions
4.9/5
Reputation and Financial Strength

Overall Rating: 4.9 / 5 (Excellent)

Vanguard is a great choice for those looking for deferred variable annuities with low fees. The Vanguard Variable Annuity offers consumers a variety of investment portfolios to choose from, with many perks like transfers from checking and savings accounts, the ability to move money between portfolios, two income options to choose from, two death benefits, no surrender charges if you’re over the age of 59½, and no commission fees. Something important to keep in mind is that Vanguard’s variable annuity contracts are issued by Transamerica Premier Life Insurance Company and Transamerica Financial Life Insurance Company, which are trustworthy companies that have received superior ratings for operating performance and financial stability, according to A.M. Best.

Vanguard also allows consumers to purchase income annuities, but these are offered in collaboration with Hueler Investment Services Inc.’s platform, Income Solutions. Additionally, Vanguard clients can compare income annuities and quotes from the industry’s top providers by using the Vanguard Annuity Access service.

Customer support is available over the phone, email and through social media. Consumers can get a free annuity “checkup” from Vanguard annuity specialists, who don’t work for commissions, meaning that you’ll get sincere and unbiased advice. So, if you’re looking for a variable annuity that offers great perks, without breaking the bank, Vanguard is definitely an option to consider.

Vanguard Annuity Features

Policy Features - 4.9 / 5

The Vanguard Variable Annuity offers consumers an array of diversified portfolios to choose from, with no surrender charges if you’re over the age of 59½ and no commission fees. However, it should be noted that Vanguard Variable Annuity contracts are issued by Transamerica Premier Life Insurance Company and Transamerica Financial Life Insurance Company. With the Vanguard Variable Annuity, consumers can choose between two income options: Secure Income, which guarantees that your income will never drop below a certain level, and Annuitization, which converts the value of your annuity into steady income payments. There are two death benefits available for the Vanguard Variable Annuity: Accumulated Value and Return of Premium. Additionally, consumers can add money to their variable annuities on a regular basis by using the company’s Annuity Express service, which allows you to transfer money from your checking or savings account, and can move money between portfolios through the Vanguard Variable Annuity Automatic Exchange Service.

In addition to variable annuities, consumers can also purchase income annuities through Vanguard. With income annuities, clients can choose between single-premium immediate annuities, deferred income annuities, and longevity insurance. Payments can begin as early as 30 days after purchase, or as late as on the consumer’s 85th birthday, depending on the selected product, and consumers can opt for lifetime payments, joint lifetime payments, or fixed period payments.

Income annuities are offered in collaboration with Hueler Investment Services, Inc., through the company’s Income Solutions platform, and Vanguard clients can take advantage of the Vanguard Annuity Access service to compare annuities and quotes from the industry’s top providers, which is highly convenient for consumers looking for the best deal.
Annuity Type
Immediate
Deferred
Variable-Deferred
Equity Indexed
Purchasing Options
Insurance Companies
Independent Broker
Minimum Balance
$5,000 for the Vanguard Variable Annuity, and at least $10,000 for income annuities..
Funding
Lump Sum
Series of Payments
Social Security
Payment Frequency
Guaranteed Fixed Period
Lifetime Payments
Survivorship Payments
Withdrawal Options
Stream of Payments
Lump Sum
Annuity Riders
Death Benefit
Income Rider
Refund Rider

Vanguard Fees and Commissions

Fees and Commissions - 4.9 / 5

There are no commission fees or surrender charges (if you’re over the age of 59½) for the Vanguard Variable Annuity and consumers can open an account with $5,000. The average expense ratio for the company’s variable annuity products is of 0.50%, which is lower than the industry average. This expense ratio includes an administrative fee of 0.10% and a mortality and expense risk fee of 0.17%. This expense ratio does not include fees for the Return of Premium death benefit or Secure Income riders. Additionally, contracts with a balance under $25,000 are subject to a $25 annual maintenance fee.

Consumers can also purchase income annuities through Vanguard, but fees and commissions on annuity contracts will depend on the selected insurer. However, Vanguard advises consumers to make an initial investment of $10,000 for income annuities. Additionally, Vanguard will charge a one-time flat transaction fee of 2% of the purchase amount.
Administrative Fee
0.10%
Commission
No commission fees on Vanguard Variable Annuities.
Surrender Charges
Vanguard doesn't charge surrender charges if you're over 59½ for Vanguard Variable Annuities. If you're under the age of 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax.
Yearly Fees
Vanguard charges a $25 maintenance fee on contracts with balances under $25,000.
Other Fees
Insurance Charges
Management Fee
IRS Penalties

Vanguard Reputation and Financial Strength

Reputation and Financial Strength - 4.9 / 5

As previously mentioned, Vanguard is a renowned company, since it is the world’s largest provider of mutual funds and the second largest provider of ETFs. The company has been rated A by the BBB, with 98 complaints in the last three years, of which 43 appear to have been resolved. Additionally, the company appears to not have any complaints filed against it the with the CFPB, which is great.

Vanguard’s annuity products are issued by Transamerica Premier Life Insurance Company and Transamerica Financial Life Insurance Company, which have received A+ ratings by A.M. Best because of their financial stability. Vanguard offers customer support via phone, email and through social media, Monday through Friday, 8:00 a.m. to 10:00 p.m. EST.
Year Founded
1975
BBB Rating
A
Consumer Financial Protection Board (CFPB) Complaints
0
Live Help 24/7
No
Live Help 24/7
No
Customer Support Hours
Monday through Friday, 8:00 a.m. to 10:00 p.m. EST
Contact Methods
Phone
Email
Social Media

Company Profile

Full Name
Vanguard Annuities
Company Website
https://investor.vanguard.com/home/
Headquarters
100 Vanguard Boulevard V26, Malvern, PA, 19355

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Customer Comments & Reviews

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mringenbe
5/6/2023
As soon as I transferred an inherited annuity to Vanguard, they pulled out of the active partner business. TransAmerica is Abyssal. I cannot access my account on the app. When I did it online, I had to get assistance in recovering my account since they kept Vanguard’s separate. Really underwhelming business model.

trurorent
10/3/2021
VANGUARD HAS ABANDONED THEIR ANNUITY HOLDERS--- Vanguard transferred servicing and reporting of my variable annuities to Transamerica. Transamerica's website is hard to navigate, so it's now much more difficult to review performance and holdings of investment subaccounts. I am also finding that it is almost impossible to know what amounts and types of fees are being charged both by Vanguard and Transamerica.

bozzyball
3/12/2021
Upon my review, I will note that on the Vanguard Annuity and likely most other annuities that there are no provisions to make eligible QCD's. In other words, no withdrawals can be made directly to charities as a Qualified Charitable Deduction (QCD). You can apparently only do this with an IRA even though the Variable Annuity was funded with IRA money and withdrawals will be noted on Form 1099-R Box 7 as an IRA. Payments will only be paid to the taxpayer and taxable to him or her. This begs the question of who or how do banks, insurance companies, investment companies and the financial industry watch to make sure investor's interests are changed in conjunction with ever changing... Read More

Samuel C
3/12/2021
vanguard dumped their annuity business a couple months ago. i have had all kinds of problems with transamerica life . not getting paid . thanks a lot vanguard. you must have known !!!

daniel.zelterman
6/20/2019
Vanguard just announced they will no longer service these annuites. What will happen to those low management fees?

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