What will we be covering in this annuity review?We will be covering the following information about the EMC National Life Accumulator FPDA (Flexible Premium Deferred Annuity) so that you can have a better understanding of how the product works:
- Product type
- Current rates
- Realistic long term return expectations
- How it is used
- How it 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.
For anyone who might be thinking about purchasing an annuity so as to assure that income will continue flowing in (regardless of how long you need it), as well as knowing that principal will be safe, then the EMC National Life Accumulator Flexible Premium Fixed Deferred Annuity may be a viable option for you. One reason for this is because regardless of what happens in the volatile stock market – or even in the economy overall – your money will be safe inside this product. In addition, when the time comes to convert the annuity funds over into an income stream, those payments will keep coming in, alleviating the worry of running out of income before you “run out of time.” Even so, though, before you go out and make a long-term commitment to the Flexible Premium Deferred Annuity from EMC National Life, it is important that you understand the benefits that it can provide you, as well as any of the features that could be a drawback. For instance, even though fixed deferred annuities can offer a long list of nice guarantees, they can be quite difficult to get out of once you’ve gotten in. So, it is best to know all that you can before you do so. Over the past several years, fixed deferred annuities have greatly increased in popularity – particularly with people who are retired and those who are approaching that time in their lives. However, due in part to this increase in demand, there are many insurance companies that have been coming out with new products. And, while it can provide you with many more options, doing so has also ended up making an already confusing product even more so. Because of that, unless the insurance or financial advisor that you work with really knows the ins and outs of annuities, it may be necessary for you to do some additional research, as annuities can typically require a substantial amount of your overall savings. This is where we come in.
Annuity and Retirement Income Planning Information You Can TrustIf you have never been to our website before, please allow us to personally welcome you here. We at Annuity Gator are a team of experienced financial experts who are dedicated to helping you decode the complicated world of annuities. Here, we strive to create unbiased, yet highly comprehensive, annuity reviews – and we have been at this for far longer than most of those “copycat” websites out there. Annuities are a unique type of insurance product in that they are the only financial vehicle that can make the promise of providing you with a lasting, lifetime income stream. Unfortunately, though, some advisors – albeit unintentionally – will tend to make them sound better than they actually are. One reason for this is because, in order to obtain the nice benefits, there are oftentimes also some tradeoffs that you need to make. So, the reality is that you really do need to know just exactly what you might have to give up in order to get the guarantees and other benefits an annuity can provide. Many annuity sales reps, and even many of the annuity websites that you’ll see online, will make some pretty bold claims about the performance of the annuities that they offer, such as:
- 7 to 8% return
- Low fees
- Guaranteed income for life
- No market risk
EMC National Life Accumulator Flexible Premium Deferred Annuity at a Glance
|Issuer||EMC National Life|
|Type of Product||Flexible Premium Deferred Annuity (FPDA)|
|A.M. Best Rating||A-|
|Phone Number||(800) 232-5818|
Opening Thoughts on the EMC National Life Accumulator AnnuityEMC National Life is a financially strong life insurance carrier. It is an affiliate of EMC Insurance Companies, an insurance enterprise that has been in business for more than a century. With a rating of A- (Excellent) from A.m. Best, this company offers simple products and provides superior services to its policyholders. As of year-end 2018, EMC National Life had total assets in excess of $909 million, and total life insurance in force of $13.42 billion. Likewise, the carrier’s total capital and surplus and asset valuation reserve for 2018 were more than $122 million. So, the company is well-capitalized and considered to be strong, stable, and able to pay out the claims of its insurance and annuity holders. Given the unpredictability in the stock market over the past several years, the demand for fixed annuities has grown a great deal. One reason for this is because fixed annuities can provide the benefits of keeping assets safe, as well as an assurance of a stable and reliable income stream in the future. However, because of the extremely low-interest-rate environment that we have been in for roughly the past ten years, the return that is offered by most fixed annuities is painfully low – and that can create problems for you and your money. For instance, the returns that are obtained on fixed annuities have not even been enough to outpace the inflation rate over time. Because of these low rates, your future purchasing power could be affected – especially if you plan to use the income from a fixed annuity as a primary source of your retirement income down the road. So, even though your money is technically “safe,” going this route may or may not actually be the most beneficial course of action for you. That’s why we’ve compiled this annuity review so that you can weigh the pros and cons.
Before we get into the in-depth details, we have some legal disclosures to present…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. EMC National Life has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners. Want to more about how annuities really work? Click here to receive our updated annuity report.
How EMC National Life Describes the Accumulator FPDA AnnuityEMC National Life describes the Accumulator FPDA annuity as a good plan for IRAs, Roth IRAs, and periodic funding of non-qualified retirement savings. The current interest rate on this Flexible Premium Deferred Annuity is guaranteed for one year. In this annuity, your money will not be invested in the stock market, but rather you will receive a guaranteed interest rate for an initial period of 12 months – and your interest rate will never be less than the guaranteed minimum interest rate that is stated in your contract. You can also make additional purchase payments into this annuity during the first contract year. As with other annuity products, the interest on your money inside of the Flexible Premium Fixed Deferred Annuity is able to grow on a tax-deferred basis. This means that there is no tax due on the gain until the time of withdrawal – which can essentially allow the funds to compound exponentially. Some of the other features of the Accumulator Flexible Premium Deferred Annuity (FPDA) from EMC National Life include the following:
- 1% first-year interest bonus guaranteed
- Minimum premium of $50 per month / $600 per year
- 10% penalty-free withdrawal per year, after the first policy year
- Issue age of up to 90 for non-qualified funds, and up to 80 for qualified funds
- Nursing home/nursing care benefit (not available in all states)
How an Insurance or Financial Advisor May “Pitch” the Accumulator AnnuityGiven our longer life expectancy these days, the intense worry about running out of retirement income is a very real fear, both for retirees and those who are approaching retirement. This is one reason why fixed annuities have grown in popularity of late, as they can offer you the assurance of income for the remainder of your lifetime. Because of that, if you’ve been presented the Accumulator Fixed Premium Deferred Annuity (FPDA) by an insurance or financial advisor, it is likely that they have focused heavily on such guarantees. However, while having these assurances can certainly help you to sleep better at night, the reality is that the interest rates today (and for the past decade or so) that are offered on fixed annuity products would have you hard-pressed to meet, much less beat, inflation. And this could lead you to struggle financially when trying to keep up with the rising cost of the goods and services that you’ll need to purchase in the future.
What Fees are Associated with the Accumulator FPDA from EMC National Life?Before you commit to a long-term financial vehicle like an annuity, you really want to make sure that you are aware of any fees and charges that you could be subject to. One big reason for this is because charges and fees can essentially cause a negative impact on your annuity’s overall return. One fee that most annuity owners need to know about is the surrender charge, during which time if you take out more than a set amount (usually 10% of the contract’s value) within the surrender period, you will be penalized. On top of that, if you take such withdrawals before you have turned age 59 ½, you can incur an additional 10% “early withdrawal” penalty from Uncle Sam. So, all in all, the amount that you actually net from an “early” annuity withdrawal can be quite a bit less than you had hoped. With that in mind, the funds that you contribute to this (or for that matter, to any) annuity should be money that you won’t need to access for emergencies in the near future.
The Annuity Gator’s End Take on the Accumulator Flexible Premium Fixed Deferred Annuity from EMC National LifeWhere it works best: While it may not be right for everyone, this annuity will usually work the best for those who are looking for the following benefits:
- Guaranteed lifetime income
- Safety of principal
- Interest rate guarantee – at least for a certain period of time
- Want access to most or all of your funds within the first several years (during the surrender charge period)
- Are seeking a high rate of return on your money
- Do not anticipate using the annuity for lifetime income