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Independent Review of the F&G Power Accumulator Annuity

What we will be covering in this annuity review:

In this review, we will be covering the following features of the newly-released F&G Power Accumulator fixed indexed annuity:
  • Product typeFidelity and Guaranty Life
  • Fees
  • Current rates
  • Realistic long-term return expectations
  • How this annuity is best 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.

If you have been thinking about buying a fixed indexed annuity because of the index-linked (and tax-deferred) growth you can obtain without any worry about market-related losses, then the F&G Power Accumulator fixed indexed annuity could be a good option for you. While fixed indexed annuities can be appealing to those who are seeking the opportunity for increased growth – while at the same time, keeping principal safe from market downturns – the Power Accumulator annuity from F&G is somewhat unique in that is geared more towards those who may benefit from exchange-traded funds (ETFs) in their portfolios. The Power Accumulator annuity is a financial vehicle that was built in partnership with iShares by BlackRock and is offered through F&G (Fidelity and Guaranty Life Insurance Company). As with other fixed indexed annuities, the Power Accumulator annuity provides a nice list of benefits, including the ability to:
  • Preserve your savings with no downside market risk
  • Leave a financial legacy to your loved ones, and
  • Meet your living expenses in retirement with a steady, ongoing income stream
But before you run out and purchase the F&G Power Accumulator sight-unseen, there are some things you need to know first.

Annuity and Retirement Income Planning Information You Can Trust

If 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 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. It’s been our mission to provide information about annuities to consumers so that they know exactly what they may (or may not!) be getting into when considering an annuity. These products can be highly complex, so it helps to have someone who is adept in how annuities work, and who can pare down the massive amount of “fine print” into something that is more easily understood. That’s where we come in! When looking for annuity information online, it is essential that you know who is trying to provide education on the products, and who is simply trying to sell you something…regardless of whether or not it is the right financial vehicle for you. It’s easy to be lulled into some of the other websites out there in cyberspace – especially when they make bold claims, like:
  • Lowest fees
  • High income
  • Top-rated annuity carriers
  • Income stream for life
Look familiar? In addition, the more “bells and whistles” an annuity has, 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 F&G Power Accumulator fixed indexed annuity, then you are in the right place. In fact, this is the only website where you can obtain all of the information you need about this – and many other – annuities. This doesn’t just include a list of all the benefits. Rather, we provide you with items to consider, as well, before you purchase the annuity. That’s because we feel like you can’t really make a well-informed financial decision with only bits and pieces of the pertinent information. That being said, if you’re ready to get started, then let’s jump right in!

Fidelity & Guaranty Power Accumulator Annuity at a Glance

Product NamePower Accumulator
IssuerFidelity & Guaranty Life Insurance Company
Type of ProductFixed Indexed Annuity
S&P RatingBBB+
Phone Number(888) 513-8797

Opening Thoughts on the F&G Power Accumulator Fixed Index Annuity

Fidelity & Guaranty Life (F&G) has been in the business of offering life insurance and annuities for more than six decades. The company offers its products through the growing independent agent market. F&G’s parent company, USF&G, launched Fidelity and Guaranty Life Insurance Company in 1959, with a mission of providing life coverage and annuities through the property and casualty insurance market. In 2001, a UK-based company, Old Mutual, acquired Fidelity & Guarantee Life Insurance Company in order to expand into the U.S. market. Since that time, F&G has added to its annuity product line, and today offers fixed and fixed indexed products. Currently, F&G has approximately 700,000 policy holders. The company is headquartered in Des Moines, Iowa, and as a publicly-traded company, its stock is listed on the New York Stock Exchange and trades under the symbol FG. In an economy that is filled with unknowns, it’s nice to know that there are financial options available that can keep your money safe, while also offering you the ability to earn more than a miniscule return. The F&G Power Accumulator does this by providing exchange-traded funds (ETFs) as a tracking mechanism. ETFs trade life stocks, but they can track a market index, like the S&P 500. These financial vehicles actually combine some of the features of stocks (such as liquidity) and mutual funds (diversification). In the case of the Power Accumulator annuity, the underlying ETFs are managed by BlackRock, a company that has its investment teams in 30 countries around the globe, and is the world’s largest provider of exchange-traded funds, managing roughly $6.9 trillion. The Power Accumulator annuity actually offers a broad array of options that are benchmarked to ETFs, including:
  • iShares Core S&P 500
  • iShares MSCI EAFE
  • iShares U.S. Real Estate
  • iShares Gold Trust
There is also a market index options – the Balanced Asset 10 Index – and a fixed interest option, where the rate is set annually, but is guaranteed not to be below 1%. With the Power Accumulator annuity, there are two options for the crediting period. These are 7 years (via the Power Accumulator 7 annuity), and 10 years (with the Power Accumulator 10). More in-depth details on the F&G Power Accumulator Series index crediting options can be found HERE. You can also find more details on the F&G Power Accumulator interest rates – as well as iShares past performance – HERE. The Power Accumulator also has some additional bells and whistles, such as:
  • Access to funds penalty-free in the event of a terminal illness or the need for long-term nursing home care
  • A death benefit paid to a beneficiary
There are also a number of different income payout options to choose from. For additional details on the F&G Power Accumulator 7 annuity, you can check out the consumer brochure HERE. The brochure with more details on the F&G Power Accumulator 10 can be accessed by going HERE. F&G is the first carrier to offer BlackRock iShares ETF in an open platform. So, putting your money to work in one of the Power Accumulator annuity options from F&G can not only be a great way to grow and protect your savings but can also place you in an elite group of “annuity pioneers.” You’ll also find some added benefits here, with no caps and no fee, along with real, trackable returns. So, unlike many other annuities, the Power Accumulator 7 and 10 annuities from F&G are not only trackable but transparent. 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 necessary legal disclosures…

This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Fidelity & Guaranty Life Insurance Company 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. Before purchasing any type of insurance and/or investment 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 situation. All of the names, marks, and materials that were used for this annuity review are the property of their respective owners. For more information on how to compare annuities in order to determine which one may be the best for you and your financial circumstances, contact us to obtain our free annuity report.

How Fidelity & Guaranty Life Describes the Power Accumulator Annuity

F&G describes its Power Accumulator annuities as “the next generation of accumulation annuities.” As the first fixed indexed annuity to feature exchange-traded funds (ETFs), there is actually a lot to like about these annuities. In addition, there are no “caps” (i.e., maximums) on the performance of the underlying investments. Rather, the annuity is benchmarked to real returns. Plus, rather than just offering one or two basic options, there is a list of various BlackRock iShares available, so you can “custom fit” the annuity to best meet your specific needs. So, with all of this fanfare about the new F&G Power Accumulator annuity that offers ETF tracking for return, what is the catch? After all, these sound a little too good to be true! And you’d be right. There are a few items to be mindful of here. First, according to the Power Accumulator annuity’s fine print, “In calculating the level of the index, the index methodology deducts a maintenance fee of 0.85% per year, calculated daily. This fee will reduce the level of the index and thus the amount of interest, if any, that will be credited to any product.” Ah-ha! But wait, there’s more… “Furthermore, while the volatility control applied to by CIBC as part of the index methodology may reduce in less fluctuation in rates of return as compared to indices without volatility controls, it may also reduce the overall rate of return for products referencing the Index as compared to other indices not subject to volatility controls.” Huh? Exactly! On top of that, even though the Power Accumulator doesn’t impose a cap on its return, there are other factors here that could limit the amount of return you actually get from the underlying investments. For instance, you could still be subject to a participation rate and/or spread. Here, for example, a participation rate states how much of the ETF’s return you can receive. For instance, if the participation rate is 80%, and the underlying ETF achieves a 10% return for a given year, then your account would only get 80% of that or 8%. The spread can also decrease the full amount of return your account would receive. In this case, the spread is a type of asset fee – typically stated as a percentage – that can be subtracted from the gain in the underlying investment(s) that are linked to the annuity. So, beware – this rosy picture might actually include a few rain clouds! Overall, then, even though there is definitely a lot to like about the new F&G Power Accumulator fixed indexed annuities, going into “uncharted territory” can be dangerous unless you have an experienced guide with you. Furthermore, because many annuities today offer a long list of bells and whistles, they can be somewhat confusing, even for experienced financial advisors. So, unless your current advisor is an annuity specialist, we’d recommend that you tread lightly.

How a Financial Advisor Might “Pitch” the F&G Power Accumulator Annuity

Because of market volatility, many people are looking for safer growth or protected growth. This leads many to research and consider an index annuity. With that in mind, the protected growth concept of the F&G Power Accumulator fixed indexed annuity is most likely where 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 already “maxed out” other retirement savings alternatives like an IRA and/or employer-sponsored retirement plan…particularly because the Power Accumulator tracks equities like ETFs. But it’s still really important to be careful here unless you know exactly what you’re getting into, as it could be fairly expensive to get out of this annuity if you find out down the road that it really isn’t the product that it was all cracked up to be! For instance, even though you may withdraw your money from the F&G Power Accumulator annuity at any time, if you take out more than 10% of your account value within the first ten years, you will incur a withdrawal charge. Plus, on top of that, if you do so before you have turned age 59 ½, you could also incur an additional 10% “early withdrawal” penalty from the IRS. So, make sure that you only contribute funds to this annuity that you won’t need to access for at least a decade. For a full list of updated disclosures on the Fidelity and Guaranty Power Accumulator fixed indexed annuity, you can check out the webpage HERE.

The Annuity Gator’s End Take on F&G’s Power Accumulator 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 growth, which can provide a higher return than a regular fixed annuity
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 10-year surrender charge period
  • Do not intend to use the lifetime income feature
If you are still considering the purchase of the Power Accumulator 7 or Power Accumulator 10 from Fidelity & Guaranty Life Insurance Company, but you’re currently on the proverbial fence regarding whether or not it will be right 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!

In Summary

If you’ve ever wanted to run out and purchase a vehicle in its first model year, it’s likely that you were advised to wait a while, at least until the manufacturer got all the “bugs” out. The same could hold true with a new type of financial product. In this case, while the nice shiny finish may be eye-catching, it could also end up costing you more than you bargained for. With regard to the Power Accumulator fixed indexed annuity from Fidelity and Guaranty Life, you can rest assured that your funds are protected from market losses and that you have the ability to earn interest if the market index goes up. 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.

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 that you have way “too much” information on this brand new annuity than to not have enough. With that in mind, if you found this annuity review on the Power Accumulator from F&G 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 annuity 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. Best, The Annuity Gator P.S. If you would like to read more of our Fidelity & Guaranty annuity reviews here are some links to check out: Independent Review of the F&G Power Accumulator Annuity      

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