What Will Be Covered in this Review?In this review of the Guaranty Flex Plus 5 Annuity from Guaranty Income Life Insurance Company, we will discuss the following information:
- 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.If you’ve been considering the purchase of an annuity because you want to assure yourself of long-lasting retirement income in the future, then the Guaranty Income Life Insurance Company’s Flex Plus 5 deferred annuity could be a good financial vehicle for you. One reason for this is because this annuity offers you the ability to earn a higher rate of return than other “safe” financial vehicles like CDs, and it does so without danger to your principal (regardless of what occurs in the market), unlike a variable annuity. However, before you dive in and sign on the dotted line to purchase this financial product, it is a good idea to initially get a thorough understanding of how the annuity works, and whether it does or does not fit in with the other short- and long-term financial goals that you have. Over the past decade or so, annuities have become much more popular as a way of earning a steady return, as well as for providing a guaranteed lifetime income stream in retirement – which in turn can alleviate the worry about running out of income in the future. Because of this, the number of financial and insurance advisors who provide annuity products to their clients has also expanded exponentially. But this may not actually be a good thing. This is because, while most financial professionals will want to do what is right for their clients, they may not necessarily be offering you the best or most accurate information regarding an annuity that you’re considering purchasing. Also, due in large part to annuities’ growing popularity in general, insurance companies have been expanding their product lines to include “hybrid” and other types of products. These annuities can oftentimes come with a lot of bells and whistles. But unfortunately, this can make these already complex products even more confusing – even for well-educated individuals. With all of the “small print” that can be associated with annuities, it is essential that you know exactly what you are getting into, because in many cases, the purchase of an annuity may require you to deposit a large chunk of your retirement savings. And, if you do find out “too late” that the annuity you purchase is not the right one for you, then it could be quite costly for you to get out of it. This is where the Annuity Gator can help!
Annuity and Retirement Income Planning That You Can TrustIf this is the first time that you have visited our website, then allow us to formally welcome you here to Annuity Gator. We comprise a team of annuity pros who are focused on offering our visitors highly comprehensive, yet unbiased, annuity reviews. We have been at this for quite a while now – much longer than most of our competitors have – and because of this we have become a highly trusted source of annuity reviews and information online. We have also in many ways become a template for other, copycat annuity websites to follow. We don’t mind that, though, as imitation can be the best form of flattery! While there are numerous websites all over the Internet that focus on marketing their annuities, some of these will oftentimes attempt to “lure” you into providing them with your contact information by making pretty bold claims such as:
- Highest Payouts
- Lowest Fees
- Guaranteed income for life
- Top-Rated Annuity Companies
- Get an Annuity Quote Now!
The Flex Plus 5 Annuity at a Glance
|Product Name||Flex Plus 5|
|Issuer||Guaranty Income Life Insurance Company|
|Type of Product||Deferred Annuity|
|A.M. Best Rating||B++|
|Phone Number||(800) 535-8110|
Opening Thoughts on the Flex Plus 5 Annuity from Guaranty LifeFor more than 90 years, Guaranty Income Life Insurance Company has been creating best-in-class wealth solutions that can generate income – as well as peace of mind – for individuals and families. Guaranty Income Life also referred to simply as GILICO, is today a subsidiary of Kuvare US Holdings, Inc., a life insurance and annuity business that is focused primarily on providing value-oriented solutions to the middle market. This company, along with its consortium of stable capital firms, collectively manages more than $20 billion, and Kuvare itself has total assets in excess of $3.5 billion. The need for annuities – which are always backed by life insurance carriers – has been steadily growing over the past few years as more and more of today’s workers are retiring without having the stability of a traditional “defined benefit” pension for future income. If you have a “defined contribution” retirement plan, such as a 401(K), then upon retirement, you will need to have an idea of what you want to do with the money you’ve saved in it – as well as a way to convert those dollars over into a stable and reliable income stream (ideally that will last for the remainder of your life – regardless of how long that may be). One possibility would be a deferred annuity. This is because these financial vehicles can offer you a set return and safety of your principal (regardless of what happens in the market), along with a lifetime income that you can count on going forward.
Before we get into the gritty details, here are some legal disclosures…This is an independent product review, not a recommendation to buy or 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 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 information on how to compare annuities in order to determine which one may be right for you, click here to obtain our free annuity report.
How GILICO Describes the Flex Plus 5 AnnuityGuaranty Income Life Insurance Company describes its Flex Plus annuities as an attractive alternative to CDs and other taxable vehicles. These annuities are essentially designed for those who are looking for tax-deferred growth with a choice of monthly income options on the annuity payout. This annuity can basically provide you with access to your money when you need it, with enhanced liquidity for future terminal illness and/or long-term care expenses. This can be done via the annuity’s terminal illness benefit and nursing facility benefit. In fact, according to Guaranty Income Life Insurance Company’s website, your interest earnings are available when they are needed. You are allowed to withdraw up to 100% of your accumulated interest or receive interest checks, or 10% free withdrawal is available after the first contract year. (The minimum interest check, though, must be at least $200). There are also some added features with this annuity, such as a death benefit – which, if paid out to a named beneficiary – will consist of the accumulated value in the annuity as of the date of the owner’s passing. (If the owner’s spouse is the named beneficiary, then he or she has the option to become the new owner of the annuity, and may continue it going forward).
How an Insurance or Financial Advisor Might “Pitch” this AnnuityGiven that many people who are approaching retirement are concerned about the safety of principal, along with steady growth, it is likely that an insurance or financial advisor would highlight the fact that your money is never subject to market risk with this annuity. In addition, there is a minimum guaranteed interest rate on this annuity. But before you charge full steam ahead with purchasing this product, it is important to note that there are some “tradeoffs” you may need to make. For example, as of this writing (April 2018), the guaranteed rate is a whopping 1%. So, while you won’t lose money in the market, it is highly unlikely that you will be elated with this type of return – especially if it requires you to lock up your money in a long-term financial vehicle. In addition, just like with most other annuities, there are some fees that you need to be mindful of – and, because annuities should always be considered longer term financial endeavors, these can be particularly important to know, because if you need to take your money out of this product, it can cost you.
What About the Fees on the Guaranty Income Life’s Flex Plus 5 AnnuityWhile there is no up-front sales commission taken out of your deposit to the FlexPlus 5 annuity, there are some other fees that you may need to look out for. Here, for instance, even though you are allowed to withdraw up to 10% of the annuity’s contract value, you will incur a withdrawal charge on any amount that is withdrawn over and above 10% during the first seven years. In addition, if you take withdrawals from the annuity before you turn age 59 1/2, you may also incur an additional 10% “early withdrawal charge” from the IRS. Given these penalties, what you end up netting out could be somewhat smaller than the amount of the initial withdrawal.
The Annuity Gator’s End Take on the Guarantee Income Life Insurance Company’s FlexPlus 5 Deferred AnnuityWhere this annuity works best: While this annuity may not be right for everyone, it could be a good alternative for those who are seeking the following benefits:
- Guaranteed growth
- Protection of principal
- Lifetime income in retirement
- You want the opportunity to earn an even higher rate of return in order to keep better pace with future inflation
- You want to access more than just 10% of the contract’s value each year during the surrender period
- You do not plan to use the lifetime income feature
In checking on another company with a 5 year guaranteed return I learned that at the end of the term the owner must request return of his or her principal no more than 60 days before the end of term or policy will renew at the then set rate and same term, 5 years, automatically! Bad if forget to notify. Stick with 5 years at maybe 1 percent.
Hi Arne – Thank you for your message. Yes, many of the annuities that offer a locked-in rate up front will require you to request the return of your money. Otherwise, they will lock in your funds again for another set period of time. If you are currently in an annuity that isn’t performing the way you would like it to, we can help you to review some other potential alternatives. This can give you a better idea of how to move forward. We can be reached directly at (888) 440-2468, or via email at: http://annuitygator.com/contact/. Best! Annuity Gator