Independent Review of the American General Power Select Plus Income Annuity – April 2018 Update
What Will Be Covered in this Annuity Review
In this annuity review, we will be going over the following updated details regarding the American General Power Select Plus Income Annuity:
- Product type
- Current rates
- Realistic long-term return expectations
- How the annuity is best used
- How ithe annuity is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you are considering the purchase of an annuity because you want assurance that you’ll have a guaranteed stream of income in retirement and that your money will be safe up until that time, then the American General Power Select Plus Income annuity could be a good option for you.
But before you make a long-term commitment to this – or any other – annuity, it is best if you first get a good understanding of how the product works, and how it may or may not live up to what you need it to do for your specific financial goals and needs.
This updated review of the American General Power Select Plus Income Annuity will help you to do just that.
Over the past decade or so, annuities have become quite a bit more popular for those who are planning for their future retirement income. One reason for this is because an annuity can offer you a guaranteed stream of income for life, regardless of how long you may need it.
However, with the good also comes the bad – or at least certain tradeoffs that you might need to make in order to get that guarantee. For instance, during their growth phase, a fixed annuity will provide you with safety of your principal. But the returns that are generated on fixed annuities are typically quite low – and are oftentimes in life with the returns generated on CDs, money market accounts, and other safe alternatives. Because of that, even though you aren’t actually “losing” money, you are losing future purchasing power, as fixed annuity returns oftentimes won’t even keep pace with inflation.
Alternatively, you could go the route of a variable annuity. Here you have the opportunity to get higher returns, based on the performance of the underlying investments. This would be great if the market always went up….but we all know too well that it doesn’t. So, with a variable annuity, you run the risk of losing principal. And that really isn’t very appealing if you’re trying to keep your hard-earned money safe as you approach retirement.
Enter the fixed indexed annuity!
With a fixed indexed annuity like the American General Power Select Plus, you have the opportunity to earn a higher return than a regular fixed annuity because your return is based on the performance of an underlying market index, such as the S&P 500.
So, if the index performs well, you’ll be credited with a positive return. If, however, the underlying index performs poorly during a given year, your annuity won’t lose value, but rather will be credited with a 0% return.
This ability to earn, but not lose, has made fixed indexed annuities a popular choice among pre-retirees. But, just like anything else that may sound too good to be true, you need to find out the whole story before you dive in.
That’s where we can help.
Annuity and Retirement Income Planning Information You Can Trust
If this is the first time you’ve visited our website, then please allow us to personally welcome you to Annuity Gator. We are a team of experienced annuity professionals who focus on offering very in-depth, and unbiased, annuity reviews online.
We’ve been doing this for quite some time now – longer than many of our competitors…even though there are some websites that offer “copycat” information, based on our reviews.
If you’ve spent any amount of time on the Internet looking for annuity information, you may have come across some conflicting details about these financial tools. That really isn’t all that surprising, though, as there are many varied opinions about annuities.
There are also a fair number of annuity-related websites that will try to lure you in for the purpose of giving them your contact information. They’ll oftentimes do so by stating some pretty bold claims, like:
- Lowest fees
- High income
- Top-rated annuity carriers
- Income stream for life
Yet, while these claims might sound truly enticing, it’s important to be aware of whether or not they are actually true.
Annuities can have a great deal of “fine print,” so reading up on the ins and outs of how they work can be somewhat time-consuming. But there is an easier way to learn how a particular annuity works by going over a comprehensive review.
That being said, if you are here to obtain more details about the American General Power Select Plus annuity, then you are certainly in the right place. In fact, dare we say that Annuity Gator is the only website where you will find all of the information that you need – which includes the good, as well as the not-so-good. This, however, is really the only way for you to make a realistic and well-informed decision about whether or not this annuity is right for you.
So, if you’re ready to get started, let’s go!
American General Power Select Plus Income Annuity at a Glance
|Product Name||Power Select Plus Income|
|Issuer||American General / AIG|
|Type of Product||Fixed Indexed Annuity|
|S&P Rating||A+ (Strong)|
|Phone Number||(800) 445-7862|
Opening Thoughts on the American General Power Select Plus Income Annuity
American General Life Insurance Company has been offering its products for more than 160 years. The company has a mission of being the premier provider of protection, investment, and income solutions that are needed for both financial and retirement security. Today, the company is a part of AIG.
As of year-end 2017, AIG held total assets of more than $208 billion. The company serves in excess of 10 million customers around the globe. Considered strong and stable financially, AIG has very high ratings from the insurer rating agencies, including an A+ from S&P, an A2 from Moody’s, an A from A.M. Best, and an A+ from Fitch Ratings.
As of April 2018, the rates associated with the American General Power Select Plus annuity – based on a deposit of under $100,000 or over $100,000, can be found HERE.
Due in large part to the volatility in the stock market, the demand for fixed indexed annuities over the past few years has risen substantially, as these products allow their owners a way to secure a positive return in good times and to hang on to their principal value during market downturns.
But it is essential to know all of the in-depth details about a fixed indexed annuity you are considering before you move ahead with depositing a large chunk of your money into one – as it can be difficult, and costly, for you to get out if you later realize that it really isn’t the best option for you.
Before we get into the gritty details, here are some legal disclosures we need to provide…
This is an independent product review, not a recommendation to buy or sell an annuity. American General has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This review is meant to be an independent review at the request of readers so that they may see our perspective when breaking down the positives and negatives of this particular annuity. Prior to purchasing any type of investment or insurance product, it is important that you do your own due diligence and that you consult a properly licensed professional if you should have any specific questions that relate to your individual circumstances. All names, marks, and materials that were used for this review are the property of their respective owners.
For more details on how you can compare annuities so that you can determine which one may be right for you, click here to instantly download our free annuity report.
How American General / AIG Describes the Power Select Plus Income Fixed Indexed Annuity
American General / AIG describes the Power Select Plus Income annuity as a “powerful solution for your retirement income needs.”
According to AIG, the Power Select Plus Income annuity offers a valuable combination of growth potential, principal protection from market downturns and guaranteed income for life. This blend of accumulation and income features could be the solution to achieving your ideal retirement.
With this annuity, you can attain accumulation based on a fixed interest option and/or through the performance of an underlying market index. Then, when you are ready to start receiving income, the Power Select Plus Income will make regular income payments either for a set time period or even for the remainder of your lifetime.
There are actually seven different interest crediting options that you can choose from with the Power Select Plus.
There are also some added features that you could select if you go with the Power Select Plus Income annuity from AIG / American General, such as a guaranteed living benefit rider. Here, you could obtain lifetime income that could rise for ten years or more – which in turn, could help your income to keep better pace with the rising cost of inflation.
Under each of this annuity’s living benefit riders, you can take lifetime withdrawals of up to 7.25% of the income base – an amount that is initially equal to your paid-in premiums – that has the opportunity to increase with guarantees or with the interest that is earned in your annuity.
This annuity also offers a terminal illness and a long-term care waiver, where if you qualify, you could access the funds in your account without penalty. Likewise, you may also access up to 10% of the contract’s value within the first full ten years of purchasing the annuity, also without penalty.
To access the updated 2018 literature on the American General Power Select Plus fixed indexed annuity, you can go HERE.
How an Insurance or Financial Advisor Might “Pitch” this Annuity
Given that people are living so much longer today than ever before, having enough income in retirement has become a top concern for many retirees. With that in mind, the guaranteed income concept of the Power Select Plus Income is likely where an insurance or financial advisor would focus when presenting this product to clients or prospects.
An additional aspect is the beneficiary protection that is provided by the Power Select Plus. Here, in the event that the annuitant passes away before receiving all of the contract value back, a named beneficiary can receive the funds, without them having to pass through probate.
But even with all of these awesome features, you really need to be careful, as there are some “tradeoffs” you may need to make with this product. For instance, even though you have the ability to obtain a positive return based on the performance of an underlying index (or indexes), the upward potential is capped.
So, if the tracked index has a stellar year, you’ll really only get a portion of that. As an example, if there is a cap of 4%, but the underlying index has a return of 8% in a given year, then your return for that year will only be 4%.
Likewise, the participation rate can also work against you. In this case, if the participation rate is 50%, then you would only get 50% of the overall index return during that time frame. For instance, if the index returns 9%, and the participation rate is 50%, your return for that year would be 4.5%. (9% x 50% participation rate = 4.5%).
And then there are the fees.
What About the Fees on the American General Power Select Plus Income Annuity?
As with most other annuities, the Power Select Plus Income has some fees that you will need to be mindful of. One of these is the 1.10% annual fee (charged to the income base) for the Lifetime Income Plus income rider. This fee is deducted each year on the contract’s anniversary.
There is also a fairly lengthy surrender period on this annuity – ten full years – where, if you withdraw more than 10% of the contract value, you will incur a withdrawal/surrender charge. These fees start at a whopping 10%, and they gradually grade down as follows:
In addition to that, if you make such withdrawals before you turn age 59 ½, then you could be hit with an additional 10% “early withdrawal” penalty from the IRS. Yikes! With all of these penalties, it could end up netting considerably less than you anticipated.
The Annuity Gator’s End Take on the American General Power Select Income Plus Annuity
Where it works the best:
Although the Power Select Plus Income annuity offers many nice benefits, it will typically work the best for those who are seeking the following attributes:
- Safety of principal
- The opportunity for additional, index-linked growth, which can provide a higher return than a regular fixed annuity
- Guaranteed income for life
Where it works the worst:
Conversely, there are some areas where this product may not be the best option. That may be for people who:
- Will need access to more than 10% of the contract’s value within the 10-year surrender period
- Do not intend to use the lifetime income feature
If you are still considering the purchase of the American General / AIG Power Select Plus Income annuity, but you’re still on the proverbial fence regarding whether or not it will be right for you, we can help you to “test” it, based on your specific scenario, at no cost or obligation.
Just let us know if this is something that you are interested in doing, and we’ll get on the case right away!
There is a long list of factors that need to be considered when you are planning for your future retirement income. And, when it comes to using annuities for either your primary income stream or even for filling in any retirement income “gaps,” it is essential that you know just exactly what you can anticipate. That’s because a different amount of income than you were planning on can make a big difference in your retirement lifestyle and on your life!
With regard to the Power Select Plus Income fixed indexed annuity from American General, you can be assured that you will have an income for life. But at the same time, depending on your other goals and needs, this product may still fall a bit short – and there quite frankly may be something else out there that is a better fit for you.
If you do have any questions on this or other income related products, we are here to help. So please feel free to contact us directly via our secure online contact form here.
Do You Have More Questions on the American General Power Select Plus Income Annuity? Did You Notice Any Mistakes on this Review?
We realize that this annuity review of the Power Select Plus Income annuity from American General may have been a tad bit longer than usual. But, we would much rather that you have too much information on this product than to not have enough. So, if you found this annuity review to be beneficial, please feel free to pass it on and to share it with other people who could also find value in it. (And, if you found it to be confusing, please also let us know that, too.)
In addition, we are aware that information regarding annuities can, and often does, change. So, if you happened to notice anything in this review that should be updated or revised, let us know and we will be happy to make the necessary edits.
Any other annuities that you would like to learn more about?
If so, just give us a shout and let us know, and our team will get to working on them right away.
The Annuity Gator
P.S If you would like to read more of our AIG annuity reviews here are some links to check out:
- AIG – Polaris Choice IV Variable Annuity
- AIG – Polaris Platinum III Variable Annuity
- AIG – Power Index Plus Annuity
- AIG – Power Index Plus Income Annuity
- AIG – American Pathway 7 Fixed Annuity
- AIG – Choice Index 10 Annuity
- AIG – American Pathway 5 Fixed Annuity
- AIG – Assured Edge Income Builder Fixed Annuity
- AIG – American Pathway Solutions MYG Fixed Annuity
- AIG – American General Power Advantage 10 Fixed Index Annuity
- AIG – American General Power Select Fixed Index Annuity
- American General Life Insurance Company QLAC
- AIG (American General) American Pathway Annuity
- AIG (American General) Pathway SolutionsMYG Annuity