What will we be discussing in this annuity review?
In this review of the American Freedom Elevate 5 annuity from Great American Life, we will be going over the following details:
- Product type
- How it may be presented
- Long-term expectations
- How it 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.
The purchase of an annuity is a big decision. After all, these financial vehicles – if they are purchased properly – can help to ensure that you will have an income for the rest of your life in retirement, no matter how long you need it. Today, many people are living much longer than in the past, so knowing that you have ongoing income can be a big relief.
But even though annuities can offer a long list of benefits, there can also be some pitfalls in the products themselves, as well as the way they are sold. Annuities are confusing products, so unless you really read the “fine print”, an annuity may not perform the way that you expected it to.
On top of that, these products can also sometimes be mis-sold by insurance and financial advisors. This doesn’t necessarily happen on purpose, but because advisors who don’t have a focus on annuities may not fully understand them either.
This is where Annuity Gator comes in.
Annuity and Retirement Income Planning Information that You Can Trust
If this is the first time you have visited our website, we would like to officially welcome you here to AnnuityGator.com. We make up a team of experienced financial professionals who are dedicated to providing you with non-biased and comprehensive annuity reviews. We’ve been offering in-depth annuity reviews for many years on our site, and because of that, we have become a trusted source of annuity information online.
As you have been researching annuities via the Internet, you may have noticed that there are other “copycat” sites that try to provide you with annuity reviews, but in reality, many of these are actually just trying to lure you in and give them your contact information.
In order to get you to do so, some of these websites will make some fairly bold claims about the annuities they offer, such as the following:
- Highest income payouts
- Lowest fees
- Top-rated annuity carriers
- Guaranteed income for life
- Get your quote now!
Yet, even though these claims can sound pretty enticing, before you move forward with a purchase, you should also first ensure that they are true – just like you would if you were in the process of purchasing any other high dollar item or service.
If you really want to find out more about the American Freedom Elevate 5 annuity from Great American Life, then you are certainly in the right spot. In fact, we dare say that this website is the only place where you will be able to find out all of the important details. This includes the good, the bad, and even the just plain ugly. This, however, is really the only way that you can truly decide whether or not this annuity is right for you.
Oftentimes, insurance and financial professionals who offer fixed annuities will paint a nice, rosy picture of how their products provide safety – but will often leave out the details on the potential drawbacks that products have. So, before you move a chunk of your hard earned savings into one of these annuities, it is essential that you know the whole story.
Just to be perfectly clear, here, we want to state that we feel that annuities can be highly beneficial for many people – provided that they fit in with your overall short- and long-term financial goals.
This annuity review is here to help you with better understanding all of the “fine print” so that you have a much more clear knowledge of whether or not the Great American Freedom Elevate 5 annuity may work well for your ultimate short- and long-term financial goals.
So, if you’re ready to begin, then let’s dive in!
The American Freedom Elevate 5 Annuity at a Glance
|Product Name||American Freedom Elevate 5|
|Issuer||Great American Insurance Group|
|Type of Product||Multi-Year Guarantee Annuity (MYGA)|
|Phone Number||(800) 854-3649|
Opening Thoughts on the American Freedom Elevate 5 Annuity from Great American Life
Great American Insurance Group traces its roots back to 1872, with the founding of the German American Insurance Company in New York. Today, Great American has more than 100 locations that are disbursed throughout North America, Asia, and Europe. The company is also now a subsidiary of American Financial Group, Inc., which is publicly traded on the New York Stock Exchange.
Over the past 20 years, Great American Life has paid more than $7 billion in guaranteed income benefits to its annuity holders – which includes more than $800 million in just 2018. The parent company, American Financial Group, currently holds more than $60 billion in assets. Due to its financial strength and claims paying ability, Great American has been rated as an A or better by A.M. Best for many years, as well as an A+ by Standard & Poor’s since 2007.
Because of the constant ups and downs of the stock market – particularly over the past decade or so – demand for fixed annuities has grown a great deal, as they provide a way for individuals to get a set rate of return and keep principal safe, while also providing a lifetime income in retirement that cannot be outlived.
However, as the rate of return on fixed annuities of late has been extremely low, it is possible that this type of annuity will not be able to keep pace with rising inflation, which in turn, could hinder you from being able to purchase the goods and services that you need in retirement – especially if you plan to use this financial vehicle as a primary income source.
Therefore, it is important to take some precautions prior to getting into this, or any, annuity, and ensure that it is the right product for you. Otherwise, you could find out the drawbacks only after you’ve placed a large sum of money into the annuity – and will be subject to fees if you wish to take your funds back out.
Before we get into the gritty details, here are some legal disclosures…
This is an independent product review, and not a recommendation to purchase or sell an annuity. Great American Life Insurance Company has not endorsed this annuity review in any way, nor do we receive any compensation for providing this review. This review is solely meant to be an independent review at the request of readers so that they can see our perspective when breaking down both the positives and the negatives of this particular model annuity product. Prior to purchasing any insurance or investment product, you should be sure to do your own due diligence and 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 fixed annuity review are the property of their respective owners.
For additional information on how to compare fixed annuities so that you can decide which may be the best one for you, click here in order to obtain our free annuity report.
How Great American Life Insurance Company Describes the American Freedom Elevate 5 MYGA Annuity
On its website, Great American Life Insurance Company describes the American Freedom Elevate 5 annuity as an annuity that offers a base interest rate that increases 0.15% in years 2 through 5.
This single premium annuity is available to investors and retirees up to 89 years of age and accepts lump-sum contributions of between $10,000 and $1 million. As with other annuities, the growth that takes place in the American Freedom Elevate 5 annuity is tax-deferred, meaning that there is no tax due on the gain until the time of withdrawal.
There are a couple of other features available with this annuity, including a(n):
- Terminal Illness Waiver
- Extended Care Waiver
With these waivers, you could be allowed to access funds from the annuity penalty-free in certain situations – even during the surrender charge period. (More on surrender charges later in this review).
There are also several options available if or when you decide to convert the annuity into an income stream (i.e., annuitize), including:
- Fixed period payout
- Lifetime payout (for one income recipient)
- Lifetime payout with payments lasting for a set period of time (in this case, if the annuitant dies during the payout period, income will continue to a beneficiary until the set period of time has elapsed)
- Joint and one-half survivor payout (here, upon the death of the first individual, the other income recipient – such as a spouse or partner – will continue to receive a payout, but at one-half the original amount)
If you want to access the product information of the American Freedom Elevate 5 annuity on the Great American Life Insurance Company’s website, you can go here.
How an Insurance or Financial Advisor Might Present this Annuity to You
If you are approaching retirement, then you may be torn between going with financial vehicles that have more risk in order to increase your opportunity for growth, and going with something “safe” and guaranteed, so that you don’t lose any of your hard-earned retirement funds.
Because many pre-retirees today are concerned about not losing what they’ve already saved, having certain guarantees can be comforting – so if you have been presented this annuity by an insurance or financial advisor, it is likely that they keyed in on the safety features of this product, along with the ability to earn a higher return if or when rates rise in the near future. So, in many ways, this annuity can allow you to potentially increase the returns on your “safe money.”
But there are some tradeoffs that you need to be mindful of. For example, even though you can earn more than the guaranteed rate on this annuity, the reality is that you still may not be able to beat, or even meet, the rate of inflation.
For instance, with the American Freedom Elevate 5 annuity, once the initial five-year guarantee period has elapsed, you will have the option of renewing for another guaranteed period (at the then-current interest rate). This, however, may not necessarily be beneficial for you.
That is because, since we have been in a historically low interest rate period for quite some time now, you could end up “trapping” a large portion of your money for a long period of time – which in turn means that you could be giving up the ability to take advantage of other financial opportunities that could provide you with a better rate. (In other words, you could be at risk for lost opportunity cost).
In any case, though, no annuity should be considered a short-term purchase. So, be sure that the funds you contribute to this – or any – annuity won’t need to be accessed for emergencies or other financial obligations (at least during the surrender charge period).
What About Fees Incurred on the American Freedom Elevate 5 Annuity?
And speaking of fees – you could actually incur a hefty one if you cancel the annuity within its 5-year surrender charge period. Actually, even if you just withdraw more than 10% of the annuity’s contract value in any given year during this five-year time frame, you could be hit with a withdrawal, or surrender, charge. These start out in Year 1 at 9%, and then slowly decrease until the start of Year 6.
American Freedom Elevate 5 Annuity Surrender Charge Schedule
In addition to being hit with a surrender penalty, if you make a withdrawal before you reach age 59 ½, you could also incur an additional 10% “early withdrawal” penalty from the IRS. So, given all of the penalties, you could end up netting out far less than you had hoped for if you need this money.
With that in mind, you really need to consider this (or any) annuity as a long-term financial endeavor and know that the money you put into it could be locked up for quite some time before you can use it.
The Annuity Gator’s End Take on the American Freedom Elevate 5 Annuity
Where this annuity works best:
While the American Freedom Elevate 5 annuity from Great American Life may not be right for everyone, it could be a good option for those who are seeking the following benefits:
- Guaranteed growth (at least five years, and then again for another guarantee period once the initial period has elapsed)
- Protection of principal
- Lifetime income in retirement
Where it works the worst:
This annuity may not be right for you if:
- You want the opportunity to earn an even higher rate of return in order to keep a better pace with future inflation.
- You want to access more than just 10% of the contract’s value each year during the surrender period(s).
- You do not plan to use the lifetime income feature.
If you’ve been thinking about what to do with your savings for the future, there are a number of criteria that you should ideally take into account. For instance, with annuities, you’ll need to make sure that the product allows you the opportunity to earn a nice return (at least enough to meet or beat inflation), while also keeping your money safe.
Likewise, if you are vying for a future income stream, you also need to know how the annuity will pay out when you need to convert the funds into ongoing income, and the way in which you want them to be paid – such as to just you as an individual, or jointly for you and another person.
So, if you are still considering a purchase of the American Freedom Elevate 5 annuity, then you can definitely rest assured that your money will be safe, no matter what goes on with the stock market. You can also count on an ongoing income stream down the road, alleviating the worry about running out of money before “running out of time.”
On the other hand, though, even though this annuity can provide you with a plethora of features, the reality is that this product could still fall a tad bit short, and quite honestly, there could be a better alternative out there for you. This is particularly the case if you have been looking for a way to keep your principal safe, yet still have the opportunity to earn a higher amount of return.
In any case, the only way to really know how this annuity may perform – based on your specific situation – is to have it tested. We can do this for you by running the numbers through our annuity calculator, and we can then provide you with a spreadsheet of the results. In order to receive this information, just simply contact us through our secure online form here and let us know.
Do You Have Any Additional Questions? Any Other Annuities You’d Like to Have Reviewed?
While we know that this annuity review was a bit on the long side, we feel that providing “too much” information is far superior than not providing enough. That being said, we appreciate you sticking with us here to the end.
We also realize that, because everyone’s situation is different, there may have been some questions that went unanswered in this review. If this is the case and you still have any additional questions or concerns, please feel free to reach out to us here.
In addition, if you found this annuity review to be helpful, then please forward it on to anyone else that you think may benefit from it, as there is a lot of misconception out there about annuities and how they work.
Is there any other annuity you would like to see reviewed?
If so, we will get right on it!
There is a long, long list of annuities that are available today. So, if you would like to learn more about a certain product (or products, if more than just one), please let us know and we will be happy to add that review to our annuity database.
The Annuity Gator
P.S. If you would like to read more of our Great American annuity reviews here are some links to check out:
- Independent Review of the Great American – American Legend III Fixed Indexed Annuity
- Independent Review of the Annuity Investors Life Great Flex 6 Fixed Annuity
- Independent Review of the Great American American Freedom Stars and Stripes 5 (MYGA) Annuity
- Independent Review of Great American American Freedom Aspire 7 Annuity
- Independent Review of the Great American Assurance Select 7 Fixed Indexed Annuity
- Independent Review of Great American Life AssurancePlus 7 Fixed Annuity
- Independent Review of the Great American AssuranceSelect 3 Plus Fixed Indexed Annuity
- Independent Review of the Great American Index Summit 6 Variable-Indexed Annuity
- Independent Review of the Great American Landmark 3 Fixed Indexed Annuity
- Independent Review of the Great American Index Protector 7 Annuity
- Independent Review of the Great American Freedom Aspire 5 Fixed Annuity