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Horace Mann Annuities Review

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This review was produced by SmartAsset based on publicly available information. The named firm and its financial professionals have not reviewed, approved, or endorsed this review and are not responsible for its accuracy. Review content is produced by SmartAsset independently of any business relationships that might exist between SmartAsset and the named firm and its financial professionals, and firms and financial professionals having business relationships with SmartAsset receive no special treatment or consideration in SmartAsset’s reviews. This page contains links to SmartAsset’s financial advisor matching tool, which may or may not match you with the firm mentioned in this review or its financial professionals.

Horace Mann Educators Corporation provides annuities, insurance and other financial products to educators across the U.S. The company offers annuities through traditional individual retirement (IRA) accounts, 403(b) accounts and other tax-advantaged retirement plans. Two teachers from Springfield, Illinois,  founded Horace Mann in 1945. Its current CEO is Marita Zuraitis.  

Can’t decide which annuity and riders make the most sense for you? A fiduciary financial advisor can cut through the complexity and help you choose one that fits your needs. 

Annuity Fees Annuity Type Minimum Initial Premium More Information
Horace Mann Flexible Premium Deferred Variable Annuity Find an Advisor

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  • $25 annual maintenance fee
  • 1.25% mortality and expense fee
Variable annuity $300

Annuity Type

Variable annuity

Minimum Initial Premium

Horace Mann Fixed Annuities Find an Advisor

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  • No annual contract fees
Fixed annuity $25

Annuity Type

Fixed annuity

Minimum Initial Premium


As with all annuity contracts, the guarantees of lifetime income are subject to the claims-paying ability of the company that issues them. In other words, you should check the long-term financial outlook of an insurance company before buying an annuity from it. A.M. Best, Fitch Ratings and Standard & Poor’s each gave Horace Mann an A (excellent and strong, respectively).

Horace Mann Flexible Premium Deferred Variable Annuity

The Horace Mann Flexible Premium Deferred Annuity allows you to invest in different funds run by major financial institutions such as Fidelity Investments, Vanguard and Charles Schwab. These broadly diversified funds are composed of various stock, bond and money market securities. You may allocate your money toward one or several fund options. So your return would reflect the performance of these funds. 

This strategy may reap stronger returns than a fixed annuity that credits a guaranteed minimum interest rate that cannot drop below 1.5%. But if you want to protect some of your assets from the volatility of the market, you can allocate a portion of your premiums to a fixed account option. This rate would change over time, based on the overall interest rate environment.

You can open a Premium Deferred Variable Annuity with a minimum annual premium of $300. This option also comes with a death benefit. So should you die before you annuitize, your beneficiary would receive the greater of the following: 

  • Full account value
  • Net premium paid to Horace Mann, minus withdrawals and adjustments for any outstanding loan balance

When you’re ready to cash out, you have the following payout options:

  • Lifetime payments
  • Lifetime annuity with guaranteed period of 10, 15 or 20 years
  • Payments throughout a set period from 10 to 30 years (your beneficiary receives payments if you die before the time period ends)
  • Joint life annuity with survivor benefit and without guaranteed period


Horace Mann charges a $25 annual maintenance fee for the Flexible Premium Deferred Variable Annuity. Annuitants with at least a $10,000 balance will have this fee waived, though. The company also charges a mortality and expense fee of 1.25% of the account value.

These fees are independent of charges imposed by other financial institutions involved in the management of your account. Their fees include fund expense ratios, which generally average below 1%. You can find expense ratios on fund prospectuses. These are available online, including on the Horace Mann website. 

With the Flexible Premium Deferred Variable Annuity, you can take withdrawals at any time without incurring surrender charges. However, the IRS will impose a 10% federal tax penalty on any withdrawals made before you reach the age of 59.5. This is in addition to ordinary income taxes. 

Realistic Return Expectations 

Your return depends on the performance of your investments, fees and riders. You can view performance data on fund prospectuses. You should consider a fund or funds with consistent performance. In order to pace ahead of inflation, most experts recommend you aim for investment options with returns greater than 3%. Some index funds track the S&P 500. Historically, it has returned on average about 10% a year since its inception.

Horace Mann Fixed Annuities

Horace Mann offers fixed annuities through tax-advantaged retirement plans such as 403(b) plans, traditional IRAs and Roth IRAs. Ordinarily, an annuity outside of these plans grows tax-deferred. But when it’s in, say, a traditional IRA, you can deduct your premium from your taxable income. In a 403(b), your contributions are pre-tax. In both cases, you won’t pay income taxes until you retire and start making withdrawals.

The most straightforward of annuities, a fixed annuity pays a fixed interest rate that resets according to the terms of the contract. With Horace Mann’s fixed annuities, (the company offers several and we’ll cover the basics common to all of them here), the rate resets on every fifth contract anniversary. The company guarantees the rate will never dip below 1%. 

You can open an account with a minimum monthly premium of $25. You don’t have to pay every month, so presumably you could open an account with just $25. When it’s time to annuitize, you can choose either to receive a specific amount each month for a specified number of years or a lower set amount for life.


There generally are no annual contract fees associated with the Horace Mann fixed annuity options. You also have penalty-free access to 10% of your account’s value each year for the first 10 years. But you may face a market value adjustment fee if you withdraw more money at a time when the interest rate has gone up. The IRS will also hit you with a 10% income surtax if you withdraw before age 59.5.

Realistic Return Expectations 

Horace Mann Fixed Annuities credit a minimum annual interest rate of 1%. The current interest rate the company is providing is about 2.25%, as of Jan. 1, 2021. At this rate, you likely won’t stay ahead of inflation. These types of accounts are generally designed for investors who are more interested in preserving their nest egg than growing it.

Retirement Tips

  • Annuities are by no means one-size-fits-all products. Having so many different options, though, can be confusing. For help, turn to a financial advisor who specializes in risk management or insurance planning. SmartAsset’s advisor matching tool will connect you with up to three pros in your area based on your preferences and needs.
  • To stretch your nest egg and annuity payments further, you may want to reconsider where you live. Check out our guide to the most tax-friendly states in the U.S. to see if and to where you should relocate.

All information is accurate as of the writing of this article.

Best Places for Small Business Owners

SmartAsset analyzed data to find the best places for small business owners in the country. This interactive map shows the best counties for small business owners in the U.S. and in each state. Zoom between states and the national map to see the top spots in each region. Also, scroll over any county to learn about that region's small business statistics.

Rank County Small Business Returns Small Business Income Income Taxes

Methodology Which places are best for small businesses owners? To answer this question, we considered three factors: the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income compared to the total tax-filing population of the region. Next, we compared the total amount of small business income to the overall amount of income reported in each region.

Small businesses are typically incorporated as pass-through entities, meaning that the business owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can play a major role in determining the financial success of a given small business. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.

These three factors were then indexed and equally weighted to yield our small business index. Places with the highest small business index are the places which ranked the highest in the study.

Sources: Internal Revenue Service (IRS), US Census Bureau 2018 American Community Survey, Government Sources, SmartAsset