Due to the fact that many people are living so much longer today than ever before, making sure that you have money available if it is needed for long-term care and/or other related health care issues are important.
In order to get a clearer picture regarding the inner workings of the American Equity Bonus Gold annuity, it can be beneficial to review the statement of understanding, along with the illustration that your insurance or financial advisor should provide you with.
That is because, unlike the colorful brochure that paints a beautiful picture of how this annuity can provide you with the “best of all worlds” in terms of income, safety, and growth, the statement of understanding outlines more about how this annuity actually works. And, while looking at all of the small print can make your eyes glaze over with all of its in-depth details, it can be well worth it to take the time and the effort to review it, as it could end up saving you a great deal of time, money, and frustration down the road.
What is the Statement of Understanding on an Annuity?
The Statement of Understanding that is affiliated with the American Equity Bonus Gold annuity is basically an outline that lists out the key items about this product, as well as provides more details on how the annuity works. For example, just some of the information that you’ll find in this document includes:
- The type of annuity (in this case, the American Equity Bonus Gold is a fixed indexed annuity product)
- The growth options that are available (such as the underlying market indexes that are available with the annuity, as well as an explanation of the annuity’s fixed account)
- How the index credits will be calculated, as well as how and when these may be changed
- Other criteria that could also have an impact on the annuity’s return
- The amount of the cash surrender value – and how you can withdraw funds from the annuity (there is a surrender charge on this annuity, however, you can withdraw up to 10% of the annuity’s value each year without penalty)
- The options that you’ll have for taking your annuity’s income stream in the future
- What happens to your annuity funds if the annuitant dies
- Any other additional benefits and/or riders that may be associated with the annuity
Why the Statement of Understanding is Necessary
In addition to the product’s illustration, an annuity’s Statement of Understanding should be provided to you by your agent before you move forward with purchasing the annuity. That is because this information will show you how the annuity’s index performance can have an effect on your overall return. This can give you a better idea of what you can – and can’t – expect from the annuity over time.
As an example, with the American Equity Bonus Gold annuity, you will have various options for your interest crediting, including annual monthly average, monthly point to point or annual point to point. There is also a fixed rate option where the rate is declared by the insurance company.
This annuity also offers you several index options, including the:
- S&P 500
- Dow Jones Industrial Average
- 10-Year U.S. Treasury Bond Value
It is important to note that the Statement of Understanding – while it is quite detailed – is not an actual annuity contract. Rather, you will be issued with the annuity’s contract if you decide to move forward and purchase the American Equity Bonus Gold annuity (or another annuity that you choose).
Once you have decided to go ahead with your purchase, your agent should forward the application, along with the annuity illustration and Statement of Understanding, to the insurance company.
Considerations Before Purchasing the American Equity Bonus Gold Annuity
Even after reading over the American Equity Bonus Gold annuity’s Statement of Understanding, you may have some questions about how – as well as if – this particular annuity will work for you. So, if you still are not fully comfortable with this annuity, please feel free to reach out to us via our secure contact form here.
By only considering the information that is presented in the annuity’s brochure, it may seem like this is an ideal product. However, when considering the fact that annuities can require a large chunk of your savings, it is essential to know just exactly what you are getting.
Know that the fixed rates, as well as other options that are currently available on this annuity, may be subject to change in the future – which in turn, could have an effect on your money, and on how it performs.
Also, keep in mind that an annuity’s illustration is not valid if it doesn’t include all of the related pages, as well as without the Statement of Understanding. That being said, be sure that if you do apply for this annuity, your agent or advisor includes everything that is required for the application package.
Have Any Additional Questions About the American Equity Bonus Gold Annuity?
Although the “fine print” that is included with any insurance or financial product can be helpful in providing you with what you need to know about it, reading through this information can also induce additional questions or concerns.
If this is the case with you, and you want to discuss your options further, you can contact us at any time through our secure contact form here. Our annuity experts will provide you with the unbiased details that you are looking for so that you can move forward with making your decision.