What Will We Be Covering in this Annuity Review?
In this review, we will be covering the following features regarding the Ameritas Accumulation 7 index annuity:
- Type of product
- Current rates
- Realistic long-term return expectations
- How the annuity is best used
- How the 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’ve been considering the purchase of a fixed index annuity (FIA) because it can provide you with more growth than other “safe” investments, as well as a future income stream, then the Ameritas Accumulation 7 Index Annuity could be an option for you.
That’s because a fixed index annuity can provide you with the ability to grow your money tax-deferred, without the worry of market losses – even if there is a substantial “correction”. And, that, can provide you with peace of mind.
Yet, before you go out and purchase this – or any – annuity, it is best if you have a good understanding of exactly how it works, as well as what you can anticipate. Otherwise, you could be locked into something that isn’t doing what you expected it to do!
Annuity and Retirement Income Planning Information You Can Trust
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Who exactly are we?
At Annuity Gator, we are made up of a team of experienced financial and annuity professionals who focus on providing in-depth, and unbiased, annuity reviews on the Internet. We have been at this for quite a while now – far longer than our competitors have – even though there are now a number of “copycat” websites that are popping up.
Our mission is to provide detailed information about annuities to consumers online so that they know what they may – or may not – be getting into. Annuities are highly complex financial vehicles, so it can be beneficial to have a guide. This is particularly true if you plan to plunk down a large chunk of your retirement savings on an annuity.
Don’t get us wrong – we think annuities are great…but only if they are purchased for the right reason. It is also easy to be lulled into some of the other “educational” annuity websites out there in cyberspace – especially when they make bold claims, like:
- Lowest fees
- High income
- Top-rated annuity carriers
- Income stream for life
On top of the general confusion regarding annuities, these products are now including more bells and whistles on them, therefore, the more small print you are likely to come across. Not that it’s a bad thing, but it can make shopping for the right annuity much more cumbersome.
That being said, if you have landed here in search of more details on the Ameritas Accumulation 7 index annuity, then you are definitely in the right place. In fact, we dare say that this is the only website where you can find all of the information you need.
This includes an honest review of the good, the bad, and yes, even the ugly. But that way, you will be able to make a much better decision regarding whether or not this is truly the best annuity for you.
So, if you’re ready to get started, let’s dive in!
Ameritas Accumulation 7 Fixed Index Annuity at a Glance
|Product Name||Accumulation 7|
|Type of Product||Fixed Indexed Annuity|
|A.M. Best Rating||A (Excellent)|
|Phone Number||(800) 745-1112|
Opening Thoughts on the Ameritas Accumulation 7 Fixed Index Annuity
Ameritas is a mutual company, meaning that it is essentially owned by its policyholders (as versus stockholders). As of year-end 2018, Ameritas Life and Ameritas Life of New York had approximately $1.7 billion of statutory basis total adjusted capital.
The company offers a wide range of insurance and investment products, including life, disability, and retirement plans, as well as annuities – immediate, variable, deferred, and fixed indexed. Due in large part to its financial strength and positive claims-paying reputation, Ameritas has earned high ratings from Standard & Poor’s (A+ / Strong) and A.M. Best (A / Excellent).
A fixed indexed annuity is oftentimes touted as the “best of all worlds,” because they 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.
You can access our annuity buyers guide HERE for more information on how fixed index annuities work, and to help you determine whether or not this type of annuity would be right for you and your specific objectives.
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. Ameritas 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.
How Ameritas Describes the Accumulation 7 Index Annuity
Ameritas describes the Accumulation 7 Index Annuity as a flexible premium deferred annuity that is designed for providing protection of assets, along with the ability to take advantage of market growth opportunities.
For instance, with this annuity, it is possible to:
- Experience protection against market fluctuations, regardless of market performance
- Accrue interest that is tax-deferred, allowing for greater earning potential
- Help create a legacy for your loved ones with death benefit proceeds
- Have the opportunity for your money to grow faster than with traditional deposit products, and
- Use your income for anything you want
Indexed annuities allow you to earn a return, based on the underlying performance of one or more market indexes (but without actually investing in the indexes themselves). In the case of this annuity, the index choices include:
- S&P 500 Sector Rotator Daily RC2 5% Index
- S&P 500 Index
- Russell 2000 Index
- MSCI EAFE Index
For more in-depth information on each of these indexes, you can reference the Ameritas Accumulation 7 Index Annuity brochure HERE.
There is also a fixed account option where you can place some (or all) of your money. As with other annuities, the money that is in your account is allowed to grow on a tax-deferred basis, meaning that no tax is due each year. Rather, you pay tax at the time of withdrawal.
There are a few other bells and whistles on the Accumulation 7 annuity from Ameritas, such as the ability to earn a higher rate the more you contribute to the account. In this case, lower rates are given if you contribute $99,000 or less, while the highest rates can be obtained by contributing $250,000 or more in premium.
You may also be able to access your money penalty-free – even during the surrender charge period – if you require confinement in a nursing home, home health care, or if you have been diagnosed with a terminal illness. (There are, however, certain criteria that must be met in order to qualify for this penalty-free access).
There is also a death benefit that will be paid out to your named beneficiary (or beneficiaries) if you should pass away before you receive all of your contributions back. In order to enhance your legacy, this annuity offers an Enhanced Death Benefit rider. If you purchase this rider (which requires an additional amount of premium), the death benefit can grow.
If you want to take a look at the full product brochure for the Ameritas Accumulation 7 Fixed Indexed Annuity, you can go HERE.
How an Insurance or Financial Advisor May “Pitch” this Annuity
Because 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 Accumulation 7 fixed indexed annuity from Ameritas is most likely where an insurance or financial advisor would focus on when presenting this product to clients or prospects.
In addition, the tax-deferred growth of your money inside of the contract can also be a bonus – and it could even allow for an additional option for tax-advantaged accumulation, even if you have “maxed out” other alternatives like an IRA and/or employer-sponsored retirement plan.
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.
In other words, this annuity uses an annual index rate cap, which is another way of saying that there is a maximum amount of return you can earn each year – even if the underlying index(s) have a stellar performance. In this case, if the cap on earnings is 4%, and the underlying index return 6%, you will only receive 4% for that time period. In addition, excess withdrawals will void any income credits, and can even reduce the income base.
Plus, while there are some added benefits that you can include with this annuity, such as the Enhanced Death Benefit rider, this comes at an additional cost. So, you really need to determine whether the added amount of premium will be worth the benefit that is ultimately received.
Are There Any Fees on this Annuity?
In addition to paying a higher amount of premium for certain riders/benefits, you could also incur a surrender penalty if you withdraw more than 10% of the contract’s value during the first several years of purchasing the Accumulation 7 annuity.
The surrender charge is a percentage of the amount that is accessed, based on the following charge schedule:
With the Ameritas Accumulation 7 annuity, you have an option to go with just a 5-year surrender period – although there is an additional monthly charge that is assessed until the fifth policy year. So, here again, you really need to decipher whether or not the added fee is worth it – especially if you only contribute funds to the annuity that you plan to leave alone as a long-term endeavor.
If you do go with the shorter surrender period, the surrender schedule would be as follows:
It is also important to note that the 5-year surrender charge schedule must be purchased at the time you initially purchase the annuity. Also, this surrender charge schedule may not be purchased along with the Enhanced Death Benefit Plus Rider.
In addition, if you take distribution(s) from the annuity occur before you turn age 59 ½ (regardless of which surrender period you choose to go with), you could also incur an “early withdrawal” charge of 10% from the IRS. You may also be subject to a market value adjustment (MVA) on your remaining funds in the annuity.
With that in mind, this (and for that matter, any) annuity should be considered a long-term financial commitment. So, the money that you contribute to this annuity should not consist of funds that you might need to access for an emergency in the future.
The Annuity Gator’s End Take on the Ameritas Accumulation 7 Fixed Index Annuity
Where it works the best:
Although this fixed indexed 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 their funds within the annuity’s 7-year surrender charge period (or alternatively, the 5-year surrender period)
- Do not intend to use the lifetime income feature
If you are still leaning towards purchasing the Ameritas Accumulation 7 annuity, but you still aren’t 100 percent sure that it’s the very best annuity 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!
While there are many factors that need to be taken into consideration when you are buying an annuity, one of the biggest concerns is making sure that the annuity is truly right for what you want – and need – it to do.
With regard to the Accumulation 7 fixed index annuity from Ameritas, you can rest 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 could very well be something else out there that is a better fit for you.
If you have any additional questions on this, or other income-related products, we are here to help. We can also run side by side annuity comparisons in order to determine how various annuities might perform. So please feel free to contact us directly via our secure online contact form here.
Have More Questions About the Ameritas Accumulation 7 Fixed Indexed Annuity? Want to See Other Annuities Reviewed?
We realize that this Ameritas Accumulation annuity review may have run a tad bit long. But quite frankly, we would much rather give you “too much” information on this product than to not provide you with enough.
That being said, if you found this annuity review to be beneficial, then 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.
Are there 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 Ameritas annuity reviews here are some links to check out:
- Independent Review of Ameritas
- Independent Review of the Ameritas No-Load Variable Annuity
- Independent Review of the Ameritas Compass Index Annuity