What we will be covering in this annuity review.
In this annuity review, we will be going over the following information regarding the Guaranty Income Life Insurance Company’s Guaranty 4 Annuity:
- Product type
- Charges and fees
- Current rates
- Realistic long-term return expectations
- How the annuity can best be used
- How the annuity is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
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Piecing together the retirement income puzzle can be a daunting task. One reason for this is because many employers have done away with pensions, so employees are oftentimes on their own in terms of generating a steady stream of cash flow from their personal savings and investments (along with possibly a small amount of Social Security).
Adding to the mix, though, is the fact that more people are living longer lifetimes today. So, in addition to simply locking in a set income stream, that income will typically need to continue flowing in for a longer period of time.
One way to help ensure that you will have a dependable income stream later in life is to purchase a deferred income annuity, or DIA. Also referred to as longevity annuities, DIAs allow you to deposit a lump sum of money with an insurance carrier, in exchange for a guaranteed lifetime income stream that starts at a date in the future – in some cases even 30 or 40 years later.
But, even though this can sound enticing, it is important that you know what to anticipate before you lock into a deferred annuity. That way, there will be no big surprises down the road. That’s where the Annuity Gator can help!
Annuity and Retirement Income Planning Advice that You Can Trust
If this is the first time you have come to our website, please allows us to begin by officially welcoming you here to Annuity Gator. Who exactly are we?
Annuity Gator is 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 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 insurance and financial advisors who work out in the field – oftentimes unintentionally – tend to make these financial vehicles sound better than they actually are. One reason for this is because even some well-educated advisors are not entirely sure how all of the pieces to an annuity work together.
But we do!
Working with an advisor who isn’t quite sure how products work can be dangerous to your financial health. This can be particularly true when it comes to annuities because once you commit to purchasing an annuity, you could face some pretty stiff penalties if you want to take all your money out soon afterward (or even over the next several years) due to surrender fees.
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
Does this look vaguely familiar?
The goal of the annuity reviews that you’ll find here on our AnnuityGator.com database is to provide you with information on the features and benefits inside the annuity, and to help you better understand what the benefits could mean to you and your financial situation – both now and in the future.
So, if you’re ready to get started with the review of the Guaranty Income Life Insurance Company’s Guaranty 4 Annuity, let’s dive in!
Guaranty Income Life Insurance Company Guaranty 4 Deferred Annuity at a Glance
|Product Name||Guaranty 4|
|Issuer||Guaranty Income Life Insurance Company (GILICO)|
|Type of Product||Guaranty 4|
|A.M. Best Rating||BB+ (Good)|
|Phone Number||(800) 535-8110|
Opening Thoughts on the Guaranty 4 Annuity from Guaranty Income Life
Guaranty Income Life Insurance Company – also referred to simply as GILICO – was initially established nearly a century ago. The company is headquartered in Baton Rouge, LA, and it was built upon three basic principles:
This insurer has a key focus on deferred annuity products, including annuity policies that feature long-term care benefits.
In 2016, GILICO became a subsidiary of Kuvare U.S. Holdings. With Kuvare as its parent company, Guaranty Income Life Insurance Company continues to be a best-in-class provider of annuity and LTC annuity plans.
With a deferred income annuity, or DIA, the volatility of the stock market does not affect the amount of income that you’ll receive in the future. When you purchase a DIA, you decide when you wish to start receiving your income, and the insurance company will then guarantee you a set income that will start at your chosen date in the future.
Many deferred income annuities will also let you make subsequent contributions into the contract. However, the way that these are factored into your future income can vary from one DIA to another. It can also be dependent on the frequency of such subsequent contributions into the annuity.
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. Guaranty Income 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. 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.
For more details 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 GILICO Describes the Guaranty 4 Annuity
GILICO describes the Guaranty 4 annuity as a consumer-oriented single premium deferred annuity that is an attractive alternative to CDs and other taxable investments. With the Guaranty 4 annuity, you can lock in a 4-year interest rate guarantee. (There is also a Guaranty 6 and a Guaranty 8 annuity option).
Starting on the first day after your rate guarantee, your annuity will earn a portfolio interest rate, which may go up or down, but will never be less than the policy’s minimum guaranteed rate. (As of August 30, 2019, that rate is 1%).
You are allowed to annuitize (i.e., convert to an income stream) at any time, with a wide range of options to choose from. In addition, the surrender charges – which coincide with the length of the rate lock period – are waived if you elect a payout option of five years or longer.
There are some other features on this annuity, too, such as a death benefit. With this feature, the full account value will be paid to a named beneficiary at the death of the owner, without any fees or charges.
For more details about the GILICO Guaranty 4 deferred annuity, you can visit the company’s website HERE.
How a Financial or Insurance Professional May “Pitch” this Annuity
When it comes to our money, it’s nice to have guarantees. The Guaranty 4 deferred annuity from Guaranty Income Life Insurance Company can offer you some nice income-related guarantees, which can, in turn, allow you to sleep better at night, knowing that you won’t run out of income in your lifetime.
Because of these guarantees, it is likely that an insurance or financial advisor who is discussing this annuity with you will key in on the guaranteed income feature. In addition, DIAs will oftentimes offer higher income payments than regular immediate annuities.
This is because your age when you start such payouts is typically older than it would be if you take income from a regular deferred and/or immediate annuity. Therefore, this too is a feature that an advisor might focus on when discussing this – or any – deferred annuity with you.
However, prior to moving forward and making a long-term commitment to purchase this annuity, there are a few items that you should know, which may or may not deem this to be the best product for you.
In this particular case, you may lock into a rate guarantee period that is lower than future interest rates. So, you can certainly lose out on potential opportunity cost here. (On the other hand, though, if rates go down, you will have a guarantee of your particular rate until the 4-year period has ended).
What About Fees on the GILICO Guaranty 4 Deferred Annuity?
There are no front-end sales charges on the Guaranty Income Life Insurance Company’s Guaranty 4 deferred annuity. There are also no annual fees. So, provided that you leave your money inside this annuity contract, 100% of it will go to work for you.
You are also allowed to withdraw 100% of your interest earnings any time that you need them – subject to a $100 minimum. If you do so, however, you may incur a market value adjustment (MVA).
If, however, you opt to surrender the annuity within the first four years of owning it, you can incur a surrender fee. Plus, if you take such a withdrawal before you turn age 59 ½, you can also face an additional 10% “early withdrawal” penalty from Uncle Sam.
The Annuity Gator’s End Take on the Guaranty Income Life Insurance Company’s Guaranty 4 Deferred Annuity
Where this annuity can work the best:
This annuity may be a good choice for you if you are:
- Hoping to lock in an interest rate for a set period of time
- Need retirement income in the future
- Are seeking a source of guaranteed lifetime income down the road
Where this annuity works the worst:
The Guaranty 4 annuity from GILICO, alternatively, may not work well for you if you:
- Have a shorter life expectancy
- Need to keep your money liquid for potential emergencies
- Do not plan to use the lifetime income feature
If you are leaning towards the purchase of the Guaranty 4 deferred annuity from Guaranty Income Life Insurance Company, you can be assured that you will have a guaranteed income stream in the future. And, should you choose the lifetime income option, you won’t have to worry about your income stream running out.
But, even with the income and the rate guarantees that are offered on this annuity, it could still possibly fall short – and it is possible that there is a much better alternative out there for you. The truth is, though, that the only way to truly know if this annuity may perform the way you want it to is to “test drive” it.
How can you do that?
We can actually do this for you by running the numbers through our annuity calculator, and we can then provide you with a spreadsheet showing the results. In order to receive this information, just simply contact us via our secure online contact form here.
Do You Still Have Additional Questions About the GILICO Guaranty 4 Annuity?
We know that this annuity review has run a bit on the lengthy side. But, we feel that it is always much better to provide our website visitors with a bit “too much” information than not to provide you with enough.
With that in mind, if you found this review to be beneficial, please feel free to forward it on and share it with anybody whom you think might also benefit from it. On the other hand, if this review has caused some confusion about this annuity – or even about the way that deferred annuities work in general – please let us know that, too.
In addition, if there are any other annuities that you do not see in our annuity database that you would like to see reviewed, please contact us using our secure contact form and provide us with the name (or names, if there is more than one) of the annuity you are interested in knowing about.
The Annuity Gator
P.S. If you would like to read more of our Guaranty Income Life Insurance Company annuity reviews here are some links to check out: