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Independent Review of the AIG (American General) American Pathway Annuity

What Will Be Covered in this Annuity Review

In this annuity review, we will be going over the following details regarding the AIG (American General) American Pathway Annuity:
  • Product type
  • Fees
  • Current rates
  • Realistic long-term return expectations
  • How the annuity is best used
  • How the annuity 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 are considering the purchase of an annuity because you want assurance that you’ll have a guaranteed stream of income in retirement and that your money will be safe up until that time, then the American Pathway Annuity from AIG (American General) could be a good option for you. This is because the American Pathway annuity offers a fixed rate of interest that you can count on, as well as lifetime income in retirement – and if you choose the lifetime income option, you’ll receive this income stream for the remainder of your lifetime, no matter how long that may be. Over the past several years, annuities have become more popular – especially with retirees and those who are approaching retirement. One reason for this is because they provide a guaranteed income stream, and they (deferred annuities) offer tax-deferred growth of your principal. With a fixed annuity, you also have the added bonus of assurance that your money will be safe – no matter what occurs in the stock market. This can help to alleviate the worry of a market correction impacting your future savings. Before you sign on the dotted line, however, it is always a good idea to take a closer look at the annuity’s “fine print.” This is because annuities can often have hidden charges and fees. And, while most insurance and financial companies do a great job of giving you all of the nice, rosy benefits that annuities offer, there can also be a few downfalls. With that in mind, it is much better to know these drawbacks now, as versus after you have already committed a large chunk of your savings to it. That’s where the Annuity Gator comes in.

Annuity and Retirement Income Planning Advice that You Can Trust

If this is the first time you have been to our website, we would like to personally welcome you here to AnnuityGator.com. We are a team of experienced financial professionals who are dedicated to providing non-biased and in-depth reviews of annuity products. We’ve been doing this for a number of years now – far longer than most of our “copycat” competitors – and because of this, we have come to be known as a highly trusted source of annuity information. Independent Review of the AIG (American General) American Pathway Annuity If you’ve been seeking information about annuities online, it is likely that you have come across many conflicting details about these financial vehicles. This isn’t really very surprising, though, because there are a lot of opinions (both positive and otherwise) about these products floating around the Internet. While there are a number of very good websites on the Internet that are focused on offering their annuity products, there are some that will attempt to lure you in with some pretty bold claims like:
  • Lowest Fees
  • Highest income payouts
  • Guaranteed lifetime income
  • Top-rated companies
Sound familiar? Yet, although these claims can be very enticing, it is all the more essential that you find out whether or not they are actually true. This is where the Annuity Gator can help. In fact, if you have come here in search of more details regarding the American Pathway Annuity, then you are certainly in the right place. We can tell you with a high degree of certainty that the website you are on right now (ours) is the only place where you can find out all of the information – the good, the bad, and yes, even the ugly. Knowing the whole picture, though, can help you in determining whether this product will be right for you. Just to be clear here, we want to state for the record that there can be a long list of benefits that can be attained when you purchase an annuity – provided that the product fits in with your overall financial needs and goals. That being said, if you are ready to start the review, let’s go ahead and dive in!

The AIG / American General American Pathway Annuity at a Glance

Product NameAmerican Pathway
IssuerAIG
Type of ProductFixed Deferred Annuity
S&P RatingA+
Phone Number(800) 888-2452
Websitewww.aig.com

Opening Thoughts on the AIG / American Pathway Annuity

For more than 100 years now, AIG has been in the business of providing financial growth and protection products to its customers. This company was founded in Asia in the year 1919, and throughout the years, it has grown into a stable force in the insurance industry. Due to its strong financial foundation, AIG has received high marks from the insurer rating agencies, which include the following:
  • Standard & Poor’s – A+
  • A.M. Best Company – A
  • Moody’s Investor Services – A2
Given the highly volatile stock market of late, there are many investors who are more and more leery about trusting their hard-earned savings to such ups and downs. Because of that, the demand for fixed-rate annuities – which are always backed by insurance companies – has been steadily increasing ever since market volatility has become the norm rather than the exception over the past several years. A fixed deferred annuity, however, can help to calm these fears and provide safety, as well as a long list of various guarantees.

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. AIG / American General 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 AIG / American General Describes the American Pathway Annuity

AIG describes the American Pathway annuity as a single premium deferred annuity that allows you to build income for the future. In the case of this particular annuity, it is designed to help you achieve long-term financial goals. With this annuity, you can choose from a variety of different initial interest rate guarantee options, including one-year, three-years, five-years, or seven-years, whereby the rate is locked in for that time period, no matter what happens with interest rates in the economy. At the time of issue, you may also select an optional return of premium guarantee which allows you to return the annuity at any time for an amount that is equal to the single premium that you paid into it (minus any withdrawals that you had made). If, however, you opt for this feature, then it is important to note that it will result in a slightly lower initial interest rate than if you had not selected it. As with other annuities, the funds that are in the annuity are allowed to grow and compound on a tax-deferred basis. And, you can choose from a variety of different income options – including the lifetime income feature, which will allow you to receive income for the remainder of your lifetime, regardless of how long that may be. There are some other features related to this annuity, including a death benefit whereby if the annuitant dies before income has started, then a named beneficiary can receive the funds that were in the account. (If your spouse is the sole beneficiary, then he or she may alternatively elect to become the new owner of the annuity and continue the contract). There are also several instances where you could receive a waiver of the surrender charges if you need to take money out of the annuity. These include the following situations:
  • Extended Care – After the first contract year (the second year, if in New York), early withdrawal charge fees will be waived if the annuity owner is confined to a qualifying institution or an extended care facility for 90 consecutive days or longer.
  • Terminal Illness – Early withdrawal charge fees will be waived on one full or partial withdrawal upon the diagnosis of a terminal illness that will result in the death of a contract owner within one year. (Here, the written documentation from a qualified physician is required).
  • Activities of Daily Living (ADLs) – After the first contract year, early withdrawal charge fees will be waived if the owner of the annuity is unable to perform – based on the written certification of a licensed health care practitioner – two or more of six defined activities of daily living (ADSs) for at least 90 consecutive days. These ADLs include bathing, continence, dressing, eating, toileting, and/or transferring).
For more of the in-depth information and specifics regarding the AIG / American General American Pathway Annuity, you can check out the Product Overview HERE.

How an Insurance or Financial Advisor May “Pitch” this Annuity to Clients

Because life can oftentimes be filled with many uncertainties, whenever you have an opportunity to receive a guarantee, it can be a nice benefit – particularly if it has to do with your financial situation. With that in mind, when it comes to the AIG / American General American Pathway Annuity, it is likely that a financial or insurance advisor who is offering this product to you will focus on the fact that you can get a guaranteed rate of interest for a set period of time, and that you can also count on a set amount of income from this annuity in retirement. However, whenever you have a guarantee presented to you, you could also find that there are certain “tradeoffs” that you need to accept in order to attain those benefits. This is certainly the case with this annuity. First, due to the painfully low-interest-rate environment that the U.S. has been stuck in for roughly ten years now, don’t expect that the rate you get will really grow your money all that much. In fact, the low rate here is barely that of a savings or money market account – even though your funds won’t be very liquid (i.e., accessible, at least without incurring a surrender/withdrawal penalty). And, while these low rates might appear to be a good tradeoff for safety, the reality is that you could end up being unable to meet, much less beat, the rate of inflation over time. This, in turn, could have a negative impact on how much you are able to spend on the goods and the services that you need in the future. So, prior to diving into a long-term financial commitment on the AIG / American General American Pathway annuity – or any annuity – be sure that you are aware of what you are giving up in return for what you’re getting.

What About the Fees on the AIG / American General American Pathway Annuity?

Even though there is no up-front charge on this annuity, as well as no annual fees, don’t let that make you believe that you won’t have any type of fees or charges at all with this annuity. In fact, one place where you could incur a substantial fee is if you opt to withdraw more than 15% of the contract’s value. In this case, you could be hit with a withdrawal charge. These charges begin at 9% in the first contract year, and they grade down over time as follows:
Contract Year1234567Thereafter
Charge %98765420
In addition, withdrawals of interest prior to turning age 59 1/2 could also subject you to an additional “early withdrawal charge” of 10% by the IRS.

The Annuity Gator’s End Take on the AIG / American General American Pathway Annuity

Where this annuity works best: This annuity may be a good product for those who are looking for the following benefits:
  • A fixed rate guarantee for a set number of years
  • Protection of principal
  • Lifetime income
Where this annuity works the worst: But, even with all of its benefits, this annuity may not be right for everyone – particularly those who:
  • Want the opportunity for a higher rate of return
  • May need to take large withdrawals during the surrender period
  • Do not plan to use the lifetime income feature

In Summary

There are a number of key factors that should ideally be taken into consideration if you are thinking about purchasing an annuity. For example, when it comes to fixed deferred annuities, while you may be able to secure a nice long guarantee period with your funds, you will also typically incur a surrender penalty if you withdraw more than 10% of your money during the first several years. If you’re still leaning towards the American Pathway Annuity, though, you can be assured that you’ll be able to count on a certain amount of income for the remainder of your lifetime, as well as possibly income for another loved one, such as your spouse, as well. However, even with the nice guarantees that come with this annuity, it may still fall somewhat short – and quite frankly, there could be a better alternative out there for you. In any case, the only way to truly know how this annuity may perform, based upon your particular situation and needs, is to have it tested. We can do that for you by running the numbers through our annuity calculator, and 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.

Have Any Additional Questions? Did You Happen to Notice Any Mistakes in this Annuity Review?

We realize that this review of this annuity review went a tad bit long. So, we thank you for sticking with us through to the end here. When creating our annuity reviews, though, we would much rather “err” on the side of being “too long” as versus not long enough. Therefore, if you found that this annuity review was helpful for you, then please feel free to forward it on to anyone else that you think may benefit from it. Alternatively, if this review led you to have even more questions, then please let us know that, too. Are there any other annuities that you would like to see reviewed? There are a lot of different annuities that are available in the market today. So, if you’d like to see one reviewed that is not currently in our review database, just simply let us know the name of the annuity (or annuities), and our team of annuity “geeks” will get on the case. So, be sure to check back soon for the new reviews. Best, The Annuity Gator
4 Comments
  • Jim
    1:16 PM, 26 June 2018

    I have been trying to contact you to obtain information about two existing policies. I spent 20 minutes navigating a phone tree before being routed to a non-English speaking person who transferred me to someone who hung up on me. So much for customer service!

  • Annuity Gator
    11:52 AM, 28 June 2018

    Hi Jim – Thank you for your message, and we apologize for your experience on the phone. We would be happy to assist you with any of the questions that you may have. We can be reached directly, toll-free, at (888) 440-2468. Or, if its easier (and so that you don’t have to dial in), you can set up a specific time to chat by going through our direct online contact form at: http://annuitygator.com/contact/. We look forward to talking with you. Best! Annuity Gator

  • Tanya Rovin
    3:41 PM, 4 April 2022

    Why is this annuity not good for: Do not plan to use the lifetime income feature.

  • Annuity Gator
    4:28 PM, 5 April 2022

    Hi Tanya– Thank you for your message.
    We would be happy to provide you with more details on the pros and cons of this annuity. In order to best support you, we would need some additional information from you. Rather than sending the info back and forth via email, it would be best to discuss it by phone. Please feel free to contact us directly, toll-free, at (888) 440-2468 to chat with one of our annuity specialists or visit http://www.annuitygator.com/contact/
    We look forward to hearing from you.
    Best,
    Annuity Gator

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