Fidelity.com Help - Exchanging Annuity Positions (2024)

You can either exchange from one investment option to one or more investment options held or not held in your annuity contract,or change (reallocate) the current percentage allocated among investment options.

Annuity Basics

• Why should I consider making annuity fund exchanges?
• What is an annuity?
• What is a tax-deferred annuity?
• What is an income annuity?
• What is a payout annuity?
• Where can I go to learn more about annuities?

Free Look Period

• What is the free look period?
• Can I allocate assets to the annuity funds during the free look period?

Restrictions and Requirements

• Can I add to my annuity on Fidelity.com?
• What are the allocation requirements for investment options?
• How often can I place annuity exchange orders?
• Can I make exchanges in my fixed income account?
• Are there times when I can't make annuity exchanges on Fidelity.com?

Placing Exchange Orders

• How do I enter information on the Exchange Positions pages?
• When are annuity exchange orders accepted and processed?
• Will I have the opportunity to change or cancel an exchange before executing it?
• What verification and confirmation do I receive online?
• How do I cancel or modify an exchange?
• What are the tax implications of annuity fund exchanges?

Related Help Topics

ANNUITY BASICS

Why should I consider making annuity fund exchanges?

You should re-evaluate your asset allocation strategy at least once a year to make sure that your annuity fund choices arestill meeting your needs.

What is an annuity?

An annuity is an insurance contract, issued by an insurance company, that lets you accumulate assets until retirement andthen receive a steady stream of income at or during retirement. An annuity can be fixed or variable. A fixed annuity pays afixed rate of interest, which is adjusted periodically, while a variable annuity pays an amount depending on the performance ofthe underlying investment accounts you choose for the annuity.

What is a tax-deferred annuity?

Tax-deferred annuities can be a smart way for long-term (five or more years) investors to save for retirement. They enabletax-deferred growth of your assets while reducing your current taxes. Much like a personal "pension" plan, tax-deferred annuitiescan also be used to create an income stream for as long as you live. Unlike individual retirement accounts, a tax-deferred annuityallows for unlimited annual contributions. Tax-deferred annuities can be fixed or variable.

What is an income annuity?

An income annuity is a financial product that you buy with a single lump sum of your savings. Like Social Security and companypensions, it provides you with a regular stream of retirement income for the rest of your life, or if you prefer, for a specificperiod of time. Since your income represents a combination of both interest and principal, you can expect a higher level of incomefrom an income annuity than another investment paying only interest income. Once payments begin, no withdrawals or surrenders areallowed. Income annuities can be fixed or variable.

What is a payout annuity?

When the assets in a tax-deferred annuity are converted into a guaranteed lifetime income, also referred to as "annuitized," anannuity contract becomes a payout annuity. Variable annuity values will fluctuate and you may have a gain or loss when money iswithdrawn. Amounts withdrawn prior to age 59 1/2 are subject to a 10% IRS penalty in addition to income tax.

Where can I go to learn more about annuities?

Fidelity.com offers extensive information about annuities. Access this material at Products > Annuities.

FREE LOOK PERIOD

What is the free look period?

Also known as the right to return contract period, the free look period enables you to return your contract for a refund within10 days (or longer where required by applicable state insurance law) after you receive the contract. When replacing an existinginsurance product with the contract, the free look period is extended to 20 days (or longer where required by applicable stateinsurance law).

Can I allocate assets to the annuity funds during the free look period?

No, all money is held in the VIP Money Market Portfolio during the free look period. (New York residents' money may be allocatedto the variable annuity funds during the free look period). After the free look period, the contract value in the VIP Money MarketPortfolio is transferred to the investment options you chose on your application.

RESTRICTIONS AND REQUIREMENTS

Can I add to my annuity on Fidelity.com?

No. You must either send a check ($250 minimum), or transfer assets from your Fidelity Account® or Fidelity mutual fund to yourannuity, either by phone (800-544-4702) or by mail. You can also add to your annuity regularly with the Fidelity Automatic AccountBuilder® service. You can download the Annuity Account form [[xref]], then complete and return it to Fidelity.

What are the allocation requirements for investment options?

The minimum amount you can allocate to an investment option is 10%. When you exchange to more than one investment option bypercentage, the total must equal 100%. When you exchange to more than one investment option by dollars, the exchange-to total mustequal the exchange-from quantity. Investments in VIP sector funds which are transferred or withdrawn in less than 60 days are assesseda 1% fee, which is retained by the fund.

How often can I place annuity exchange orders?

You can place annuity exchange orders via Fidelity.com and phone for up to 18 days per calendar year. However, there is no limitto the number of days on which you can place exchanges when you do so by mail. As a courtesy, Fidelity sends a letter after you haveplaced orders during nine days in a calendar year.

Can I make exchanges in my fixed income account?

No. You can view your fixed income account with the other annuities and accounts in your portfolio. However, you can't exchangeor reallocate in a fixed income account.

Are there times when I can't make annuity exchanges on Fidelity.com?

You can't make exchanges during the free look period, or if you are an annuity administrator or assignee (as opposed to an annuityowner, joint owner, trustee, custodian, or someone with limited or full power of attorney for the annuity). If you're participatingin a special annuity program (e.g., Systematic Withdrawal), on days on which automatically generated special program transactions occur,you may not be able to place an exchange order using Fidelity.com.

PLACING EXCHANGE ORDERS

How do I enter information on the Exchange Positions pages?

• To exchange to multiple investment options, select the number of investment optionsfrom the "Exchange to" drop-down list (you can exchange to as many as 35 investment options).
• When exchanging all, leave the exchange-from quantity blank, and enter exchange-toquantities in percentages.
• When exchanging by reallocation, the reallocated total must equal 100%.
• Enter dollars and percentages in whole numbers, without dollar signs, percent symbols,or decimal points.

When are annuity exchange orders accepted and processed?

Annuity exchange orders received by Fidelity during business hours will be processed after and are effective as of the market closefor the current business day. Business hours are Monday through Friday, 9:30 a.m. to 4:00 p.m. ET, excluding weekends and holidays.

If the market closes early due to market volatility, exchange orders will continue to be accepted. If the market reopens beforethe regular closing time, the orders will be effective as of the current business day. If the market does not reopen and remainsclosed for the day, the order will be effective as of the next business day.

Will I have the opportunity to change or cancel an exchange before executing it?

Your exchange will not be executed if you leave the Verification page before you click Place Order, or if you click Void.

What verification and confirmation do I receive online?

When you make an exchange online, you always see a Verification page. Review the Verification page carefully beforeplacing your exchange. Once you place your exchange, you see a Confirmation page displaying your confirmation number andexchange details. You can print this confirmation for your records. Once the order has been executed, Fidelity mails youa paper confirmation.

How do I cancel or modify an exchange?

You can view pending exchanges on the Orders page for the annuity account. To cancel or modify (cancel and replace) anorder, call an annuity representative before market close (usually 4 p.m. ET, Monday through Friday). Annuity representativesare available Monday through Friday, 8 a.m. to 8 p.m. ET, at 800-634-9361.

Attempts to cancel or modify (cancel and replace) orders are performed on a best efforts basis. There is no guarantee thatan open order can be canceled or canceled and replaced, in whole or in part.

What are the tax implications of annuity fund exchanges?

Annuity fund exchanges are tax-free.

• Orders