What will we be going over in this annuity review?In this review of the Bankers Life & Casualty Security Builder Premium Bonus Indexed Annuity, we will be discussing the following information:
- Type of annuity
- How the annuity works
- Pros and cons
- Realistic long-term return expectations
- Where this annuity may or may not fit in a financial plan
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simpleIf you have been considering the idea of purchasing an annuity because you are seeking additional tax-deferred growth, protection of principal (in any market environment), and a lifetime income stream, then the Bankers Life & Casualty Security Builder Premium Bonus fixed indexed annuity could be a good option for you. However, even though fixed indexed annuities might initially appear to offer the best of all worlds – with growth, safety, and income – things are not always what they seem – and this is particularly the case when it comes to financial and insurance products. With that in mind, prior to diving in and making a long-term commitment sight unseen, it is recommended that you obtain a good, solid understanding of how this annuity works, and how it may – or may not – work out for your particular financial objectives. Throughout the past ten years or so, fixed indexed annuities, or FIA 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. While there are many new annuities appearing in the marketplace today, the truth is that annuities actually date all the way back to the Roman empire. Throughout the years, these products have however been updated – and many of them can include a long list of enticing bells and whistles, such as penalty-free withdrawals (in certain circumstances), and optional riders that can provide you with even more guarantees. However, with the good also comes the bad – or at least certain tradeoffs that you might need to make in order to get the guarantees that are offered by annuities. 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 usually pretty low – and are oftentimes in line with the returns that are generated on CDs, money markets, and other “safe” alternatives. For this reason – even though you are not actually “losing” money – you are losing out on future purchasing power, as fixed annuity returns won’t usually even keep up with inflation. So, here again, there is no loss on paper per se, but trying to pay your future living expenses can become more and more difficult as prices go up. As an alternative, you could consider going with a variable annuity. With these financial vehicles, 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 Bankers Life & Casualty Security Builder Premium Bonus IA, 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 it will simply 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 the Annuity Gator can help.
Annuity and Retirement Income Planning Information You Can TrustIf you have never been to our website before, please allow us to officially welcome you here to Annuity Gator. Who exactly are we? At Annuity Gator, we are a team of experienced financial and annuity professionals who focus on providing in-depth, and unbiased, annuity reviews on the Internet. In fact, we have hundreds of annuity reviews in our annuity review database on our website. These are available to everyone at no charge so that you have a better idea of what to anticipate if you’re considering a particular annuity product. 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. We don’t really mind, though, because imitation is the highest form of flattery. If you’ve spent any amount of time online looking for annuity information, you may have come across some highly conflicting details about these financial tools. That really isn’t all that surprising, though, as there are many varied opinions about these types of products. Some good, and some that are not so good. There are also a fair number of annuity-related websites that will try to lure you in just 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
Bankers Life & Casualty Security Builder Premium Bonus Indexed Annuity at a Glance
|Product Name||Security Builder Premium Bonus|
|Issuer||Bankers Life & Casualty|
|Type of Product||Fixed Indexed Annuity|
|Phone Number||(800) 787-1431|
Opening Thoughts on the Bankers Life & Casualty Security Builder Bonus AnnuityAlthough Bankers Life & Casualty is not considered to be one of the largest insurers in the marketplace, this company has a good reputation, and it offers a nice product variety, especially for those who are preparing for retirement. The company is a wholly-owned subsidiary of CNO Financial – which has a history that dates all the way back to 1879. Bankers has more than 300 offices across the U.S., and roughly 5,000 insurance agents who market the company’s products, which include:
- Medicare Supplement Insurance and other supplemental health coverage
- Long-Term Care Insurance
- Life Insurance
- Annuities – Fixed, Fixed Index, and Immediate Income
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. Bankers Life & Casualty 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 Bankers Life & Casualty Describes the Security Builder Premium Bonus FIABankers Life initially introduced the Security Builder Premium Bonus fixed indexed annuity back in 2007. Since that time, a myriad of other FIAs have made their way into the marketplace, so it honestly has faced some pretty stiff competition. This annuity offers the simplicity of a fixed annuity that is combined with the opportunity to earn returns that are linked to the S&P 500 index – all while protecting the principal and growth against downside market risk. Just like with other annuities, the Security Builder Premium Bonus annuity from Bankers Life allows the money in the account to grow on a tax-deferred basis. This means that there is no tax due on the gain in the account until the time of withdrawal. (Just like in a 401k or traditional IRA account). As an added feature, the Premium Bonus Index Annuity offers an up-front premium bonus. This is credited to the index value when the annuity is initially issued – so it can essentially help the annuity to earn money right from the get-go. The annuity also has some added “bells and whistles” included, including penalty-free withdrawals for convalescent care and/or expenses if you are diagnosed with a terminal illness. So, while this is certainly not a replacement for having long-term care insurance, it can offer you a safety net just in case.
How an Insurance or Financial Advisor Might Present this Annuity to a ClientBecause so many 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 Bankers Life & Casualty Security Builder Premium Bonus fixed indexed annuity is most 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 death benefit. 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. 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.
What Fees are Associated with the Bankers Life Security Builder Premium Bonus FIA?It has often been said that there is no such thing as a free lunch. There is also no such thing as a free annuity – even if it doesn’t charge you an up-front agent commission. Typically, with fixed indexed annuities, 100% of your contribution will go to work for you. But, if you take money out of the annuity during the “surrender period,” you could end up paying a hefty fee. In this case, if you take out more than 10% of the annuity’s contract value during the surrender period, you will incur a surrender, or withdrawal, fee. In addition, if you make such a withdrawal before you have turned age 59 ½, then you could also be liable for an additional 10% “early withdrawal” penalty from Uncle Sam. So, when you purchase this – or any – annuity, make sure that you know it is a long-term financial commitment.
The Annuity Gator’s End Take on the Bankers Life Security Builder Premium Bonus AnnuityWhere 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
- Will need access to more than 10% of the contract’s value within the surrender period
- Do not intend to use the lifetime income feature
In SummaryThere is a long list of criteria 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 Bankers Life & Casualty Security Builder Premium Bonus fixed indexed annuity, you can definitely 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 on any other income-related annuity 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 run a bit long. But quite frankly, we would much rather know that you have “too much” information on this product than 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 Bankers Life annuity reviews here are some links to check out:
- Independent Review of Bankers Life
- Independent Review of the Bankers Life & Casualty Premium Bonus IA Fixed Indexed Annuity
- Independent Review of the Bankers Life and Casualty Guaranteed Lifetime Income Annuity.