What will be covered in this annuity review?In this review of the American General Power Index Advisory annuity, we will be discussing the following details:
- Type of annuity
- How the annuity works
- Pros and cons
- Where the annuity may or may not fit in a portfolio
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.
If you’re considering the purchase of a fixed index annuity, it is likely that you want the opportunity for market-linked growth, but without subjecting your hard-earned money to the constant ups and downs of the stock market. This being the case, the American General Power Index Advisory annuity could be a good choice for you. But, before you give the thumbs up on this, or any, annuity, it is essential that you learn how the product may or may not be in your best interest. Otherwise, you could make a costly mistake if you end up buying – then surrendering – it. That’s where the Annuity Gator comes in!
Annuity and Retirement Income Planning Information that You Can TrustIf this is the first time you have visited our website, please allow us to personally welcome you here. Annuity Gator is a team of highly knowledgeable financial and annuity experts who are focused specifically on offering very in-depth and unbiased reviews of annuities and other related financial tools. We have been doing this for quite some time – much longer than our competitors – and because of that, we’ve become a highly trusted source of annuity information online. If you are researching annuities for the tax-deferred savings they allow, as well as for the reliable income stream that they provide, it is likely that you’ve run across a whole host of information and opinions about annuities on the Internet. You might also have been “lured” into other various websites on the world wide web that state a variety of enticing claims such as “highest annuity payouts” or “lowest annuity fees.” Unfortunately, though, as nice as these features might sound, many of these websites are only hoping to get your contact information so that they can send you endless emails and hope that you buy an annuity from them or one of their affiliates. If you are really interested in being educated about the Great American Power Index Advisory annuity, though, the best way to do so is through an unbiased, objective expert…like us! In fact, we dare say that we are the only place online where you can find the good, the bad, and yes, even the ugly details about annuities and their components. That’s not saying annuities are bad financial tools – because they’re not – but only if they are purchased for the right reasons. Otherwise, they could turn out to be an expensive mistake. We feel that complete transparency we provide is the only way to make a truly well-informed decision about whether or not a particular annuity – or for that matter, any financial vehicle – will be a good fit for you. That being said, this review is here to help you get a better understanding of all the “fine print” regarding the Power Index Advisory annuity from American General. So, if you’re ready to get started, let’s just right in!
American General Power Index Advisory Annuity at a Glance
|Power Index Advisory
|American General / AIG
|Type of Product
|Fixed Indexed Annuity
|A.M. Best Rating
Opening Thoughts on the American General Power Index Advisory AnnuityAmerican 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 American International Group, or AIG. AIG has operations in more than 80 countries and jurisdictions around the world. The company employs nearly 50,000 and is known as an insurance powerhouse, offering both personal and commercial coverage. Based on its financial strength and claims-paying ability, AIG is highly rated by the insurer ratings agencies. These include a(n):
- A+ (Strong) from Standard & Poor’s.
- A2 (Stable) from Moody’s Investor Services.
- A (Excellent) from A.M. Best.
- A+ (Stable) from Fitch.
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 Describes the Power Index Advisory AnnuityAmerican General/AIG describes index annuities as a beneficial solution to help grow your retirement assets without risking your principal. With these annuities, you can get the protection of a fixed annuity, along with the potential for tax-deferred interest earnings that are based on the performance of a specific underlying market index. As an added bonus, you also have the opportunity for a guaranteed lifetime income – regardless of how long you may need it. While these benefits might sound really enticing, though, just like most other things in life, there are some tradeoffs you’ll need to make. For instance, earnings on this (and most other) fixed indexed annuities are “capped” at a certain percentage. As an example, if the cap is 5%, and the underlying index attains an 8% or 10% (or more) return in a given year, then your annuity will only be credited with a return of 5%. In return for this (no pun intended!) you aren’t subject to losses if or when the underlying index performs poorly during a given year. With that in mind, fixed indexed annuity owners likely slept much better than direct equity investors during the 2008 recession, and the more recent market downturn due to the 2020 COVID-19 outbreak.
How an Insurance or Financial Advisor Might “Pitch” this AnnuityGiven 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 Index Advisory annuity is most likely where an insurance or financial advisor would focus when presenting this product to clients or prospects. Certainly, the ability to grow assets based on the performance of an underlying index(es) without worry about losing money in a market downturn, is another potential plus in the “advantage” column for this product. But you need to keep in mind the limitation that the cap imposes. So, if you are a firm believer that the stock market “always comes back up,” then this annuity may not be right for you, because it won’t provide you with the full amount of gain in the underlying index. On the other side of the coin, if you’re risk-averse – and you are also inching closer to retirement (and want to keep your principal safe from losses), then a fixed index annuity like the Power Index Advisory from AIG/American General might just be a good fit. With that in mind, though, you need to remember that this – and any – annuity is a long-term commitment. In fact, while you are allowed to withdraw up to 10% of the contract value per year without penalty, if you access more than that during the annuity’s surrender period, you will be hit with a fee. This is on top of any tax that you may owe, as well as a 10% IRS “early withdrawal penalty” if you do so before you have turned age 59 ½. Ouch!
The Annuity Gator’s End Take on the American General Power Index Advisory AnnuityWhere it works the best: Although this 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 has the potential to provide a higher return than a regular fixed annuity
- Guaranteed income for life
- Will need access to more than 10% of the contract’s value within the surrender period
In SummaryThere 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! In terms of the Power Index Advisory 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 Any Additional Questions About this Annuity? Did You Happen to Notice Any Mistakes on this Annuity Review?We realize that this annuity review 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. Best, 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
- AIG – American General Life Insurance Company QLAC
- AIG – American Pathway Annuity
- AIG – Pathway SolutionsMYG Annuity
- AIG – American General Power Select Plus Income Annuity – April 2018 Update
- AIG – American General Life Insurance Company Power 10 Protector Index Annuity
- Independent Review of the American General Power Select Plus Fixed Index Annuity