How to Get Out of a MetLife Variable Annuity

Annuities are financial instruments designed to extend income during retirement years so that it endures to the end of life. Investors can draw from annuities upon depositing a significant lump sum, or they can opt for a deferred payment structure. Furthermore, annuities can be fixed, making unchanging payments according to an established schedule. Alternatively, they can be variable, in which the payments will grow and shrink in line with market conditions.

MetLife offers almost 40​ variable products. Some customers are pleased or, at least content, with these annuities. Others regret the lack of predictability typical of variable rate retirement funds. While there are ways for investors to extract themselves, they should use judgment and count the costs before doing so.

How Does a MetLife Variable Annuity Work?

At its most basic, a variable annuity involves investor payment upfront, in full or over an accumulation period, from which a retiree will receive periodic distributions for the remainder of their lives. The variable component affects the size and frequency of the payouts. The funding sources could be stocks, bonds or money-market funds, among other instruments.

Thus, disbursements will depend on how well the portfolio is doing. It might mean larger distributions in flush times or less generous ones when the investments go south. Variable annuities carry more promise and more risk.

How Do You Check a MetLife Account?

Customers can check on the performance of their annuities through a portal if they have set up online access. Note that many MetLife annuities are managed by Brighthouse Financial.

Otherwise, there are two toll-free MetLife variable annuity customer service numbers available. If the annuity was set up through an employer, the group annuity number is (800) 560-5001. If the annuity was purchased independently or through a broker, the number is (800) 638-7732.

Having the most recent information helps customers to make an informed decision about staying with MetLife or exploring other annuity companies.

What Are the Options When an Annuity Is Doing Poorly?

If the MetLife variable annuity is not doing well, holders have a decision to make. The first thing is to determine where you are in the surrender period. Cashing out or otherwise getting out of the annuity is provided for in the annuity contract. This contract specifies a surrender period during which MetLife accumulates monies to offset the commission payments and other administrative expenses.

For a customer to withdraw from the variable annuity early in the surrender period, the company must absorb the financial loss, unless the loss is alleviated. Accordingly, the financial institution charges a surrender fee, deducted from the cash-out proceeds when a customer withdraws from the annuity.

Surrender fees can be as much as seven percent of the annuity's cash value. As the surrender period approaches its end, usually seven years or so, the percentage diminishes as the company acquires more funding in the annuity's coffers. Regardless, surrender charges are significant and calculating the financial hit should inform any customer who wishes to terminate the contract.

Getting Out Without the Surrender Charge

The easiest way to terminate an annuity contract without cost is to wait out the surrender period and cash out with zero penalties. If this is not acceptable, customers can at least save on the taxes they would incur from a straight withdrawal. A 1035 Exchange is a vehicle for moving assets from one annuity to a different company.

In addition to submitting the pertinent IRS paperwork, a copy of the latest MetLife variable annuity statement should be forwarded as well. This way, investors avoid paying taxes on a lump sum withdrawal.