What’s Covered In This Review
In this review, we’ll cover the following information on the AIG American Pathway 5 Fixed Annuity:
- Product Type
- Fees
- 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 have been considering moving forward with the purchase of annuity because you want to assure yourself of an income stream in retirement, while also keeping a large percentage of your retirement nest egg safe, then the AIG American Pathways 5 fixed annuity could be a viable alternative for you. One reason for this is because the American Pathways 5 has several guarantees that have been built directly into the contract.
However, before you move full steam ahead with purchasing this particular annuity, it is recommended that you first know exactly how it works, and how it may or may not be aligned with your specific financial goals and needs. Then, after you have a more thorough understanding of this annuity product’s inner workings, you can feel more comfortable with you decision to either move forward or to pass.
Over the past several years, fixed annuities have become quite popular – particularly as a method of obtaining guaranteed income in retirement. Because the lifetime income option on a fixed annuity can ensure that you have ongoing income – no matter how long you live – it can help with eliminating the worry that you may run out of income in the future.
However, even though this guaranteed can be reassuring, it is also essential to understand that an annuity is a long-term commitment that can often time have a surrender period of many years. With that in mind, you really want to know what it is that you’re getting into, as it can be quite expensive to get out if you change your mind.
Unfortunately, though, really knowing what it is that you’re getting into with an annuity product can be somewhat challenging. This is because these products often times contain a myriad of “fine print” that can be highly confusing. Adding, even more, confusion to the mix, though, has less to do with the annuity products themselves, and more to do with how these products are presented to consumers. This, however, is where we come in.
Annuity and Retirement Income Planning Information That You Can Trust
If this is the first time you have stopped by our website, we would like to personally welcome you to AnnuityGator.com. We encompass a team of experienced financial professionals who are highly focused on providing you with the most comprehensive and nonbiased annuity reviews that can be found on the Internet today. We have been doing this longer than any of our competitors. And because of this, we have become well known as a highly trusted source of annuity information.
There could be any number of reasons why you are seeking more details online about annuities. For instance, possibly you have heard family or friends discussing these financial vehicles. You may also have attended an annuity seminar where, in return for a free lunch or dinner, the presenter provided you with information about why a fixed annuity could be right for you. This may even be what has ultimately led you to our website today.
If you have spent any time at all researching annuities on the Internet, though, it is likely that you have run across some very conflicting details. This, however, is not at all surprising. While there are a lot of very reputable websites out there that are devoted to marketing their annuities for sale, some of these sites will also try to lure you in by touting various claims such as the following:
- Highest income payouts
- Lowest fees
- Top-rated annuity carriers
- Guaranteed income for life
- Get your quote now!
But, even though these claims may sound very appealing, it is still important that you first find out if they are actually true – especially if you are planning to purchase an annuity. The good news is that if you want to get the nitty-gritty details regarding the AIG American Pathway 5 fixed annuity, then you are certainly in the right place. In fact, we dare say that you are in the only place that will provide you with all of the pertinent details – which include the good, the bad, and even the ugly.
Insurance sales agents who offer fixed annuities will often times do their best to paint you a very rosy picture of just how safe these products can be. However, what they may conveniently neglect to tell you is that there can also be some drawbacks to them, too. This means that you may need to do a bit of homework before you move forward with an annuity purchase.
Not to be misunderstood – most insurance and financial advisors will typically work hard to do what is best for their clients. So, the products that they are offering aren’t necessarily bad. However, you still want to know both the benefits and the downfalls so that you can make the most well-informed decision possible.
This annuity review is here to help you in decoding all of that “fine print” about annuities so that you will have a more thorough knowledge of whether this particular annuity may help you to achieve your financial goals.
So, if you’re ready to move forward, let’s go ahead and dive in!
AIG American Pathway 5 Fixed Annuity
Opening Thoughts on the AIG American Pathway 5 Fixed Annuity
AIG is a well-known financial and insurance conglomerate. This company had its beginnings nearly 100 years ago. Back in 1919, the company was founded in China – and today, it proudly serves more than 90 million customers in over 100 different countries worldwide.
Due to the strong financial footing that AIG has, the company has been given very high ratings from the insurer rating agencies. These include:
- A from A.M. Best
- A+ from Standard & Poor’s
- A2 from Moody’s
The company has also earned a long list of awards and accolades, including a 2016 Business Insurance Innovation Award, a Travvy Award in 2016, and a CIO 100 Honoree award in 2016 for the company’s use of technology.
Due to the vast amount of volatility that has taken place in the market over the past decade or so, the demand for fixed annuities have grown significantly – mainly as a way for retirees, and those who are saving for retirement, to keep their money safe.
But on the other hand, due to the low-interest rate environment that we’ve been living in for nearly the past ten years, the “cost” of this safety is the fact that the return is extremely low. In fact, in most cases, the return that is earned on fixed annuities today cannot even meet or beat inflation. This can be a sizeable problem, though, as it can negatively impact the amount of money that you accumulate in the annuity and, in turn, the amount of retirement income that you’ll receive from it.
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. AIG 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 additional information on how to compare fixed annuities so that you can decide which may be the best one for you, in order to obtain our free annuity report.
How AIG Describes the American Pathway 5 Fixed Annuity
According to the American Pathway 5 literature, the American Pathway 5 fixed annuity offers protection of your savings and predictable retirement income payments.
With this annuity, the initial interest rate on the single premium is guaranteed for five years. And, regardless of future economic conditions, this annuity is guaranteed to renew either at or above the minimum interest rate.
There are also some additional optional features. For example, you can select an option return-of-premium guarantee. With this rider, the annuity may be returned at any time for an amount that is equal to the single premium that was paid in (minus any previous withdrawals).
How a Financial Advisor Might “Pitch” This Annuity
There are a number of nice benefits that can be obtained if you purchase the AIG American Pathway 5 fixed annuity – which includes a guaranteed interest rate period. Likewise, as with most other annuities, the funds that are inside of the Pathway 5 fixed annuity account will grow on a tax-deferred basis. This can allow the money to grow and compound over time without the worry of taxation eating away at your annual return.
If you have been approached by an insurance or financial professional who is offering you this annuity, then they may have keyed in on certain features that it offers, such as a guaranteed rate, as well as an ongoing stream of income in the future that can last throughout your entire lifetime – regardless of how long that may be.
However, as an educated consumer, it is likely that you have probably also noticed that insurance and financial companies do a great job of making sure that their products sound enticing. For instance, if you go by the product details outlined above, you may have determined that this is the best annuity for you.
But it also important to keep in mind that, if you are being offered this annuity by a commissioned insurance or financial sales rep, then he or she is likely to point out all of the benefits and guarantees, while possibly leaving out any of the features that may be drawbacks. Because of that, you will definitely want to take a closer look at the small print for the American Pathway 5 fixed annuity – particularly because the purchase of this annuity could quite possibly require a sizeable chunk of your hard-earned retirement savings.
When looking a bit more closely at the AIG American Pathway 5 fixed annuity literature, you will find that the interest rate guarantee may only be in force for one, three, or five years – depending on the option that is selected. After that, the rate could end up to be lower on the contract.
In addition, a market value adjustment will apply in the event of early and/or excess withdrawal during the market value adjustment period. This adjustment can either increase or decrease the remaining annuity value, depending on the current interest rate environment.
So, while principal protection and lifetime retirement income can be nice, the reality is that these features can easily be found on most any annuity product. And, if you are able to find these features, along with the opportunity to attain a higher return on your funds, then it could very well be worthwhile to take a closer look at some other options that may be available to you in the market place.
The bottom line is that, while there are some nice benefits offered via the AIG American Pathway 5 annuity, once you have “locked up” a large sum of your money, it could be too late for you to change your mind if you find a different product that better fits your needs.
With that in mind, if you are still not completely certain that the AIG American Pathway 5 fixed annuity is right for you, and you would also like to get answers to any other questions that you have about this or another product, then please feel free to reach out to us through our secure contact form here.
Also, if you would like to have any additional information regarding how annuities work – and what you should know prior to purchasing an annuity – then just simply to instantly access our free report regarding what you need to know before purchasing an annuity.
What About the Fees on the AIG American Pathway 5 Fixed Annuity?
An annuity is considered a long-term financial endeavor – and because of that, there can be some fees that are involved if you want or need to take more than 10 percent of your contract value over the first few years of owning the contract.
In the case of the AIG American Pathway 5 fixed annuity, there is no initial sales charge, nor is there an annual fee. There are, however, five years of surrender fees, which means that you could be heavily penalized if you change your mind and withdraw all – or even a majority – of your funds. These surrender charges are outlined as follows:
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Thereafter |
|---|---|---|---|---|---|---|---|---|
| Charge | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0% |
The Annuity Gator’s End Take on the AIG American Pathway 5 Fixed Annuity
Where it works best:
This particular annuity will usually work the best for those who are looking for:
- Safety of principal
- Guaranteed lifetime income in retirement
- Guaranteed rate protection – at least for a short time after purchasing the annuity
Where it works the worst:
The AIG American Pathway 5 fixed annuity may not be an ideal fit if you:
- Want access to most or all of your funds within the first five years
- Are seeking a high rate of return on your money
- Do not intend to use the lifetime income feature
In order to truly know how to compare the best annuity options for you, so that you can download our free annuity report.
In Summary
When considering an annuity – or any financial vehicle – it is important that you consider many things before moving forward. That way, you can have a much better idea regarding whether or not the annuity is right for you. Before you take the next step, know that any annuity purchase should be considered as a long-term endeavor. So, you should feel comfortable in knowing how the annuity can help you with achieving your financial goals.
If you are moving towards a fixed annuity, you can be assured that it can offer your principal protection, along with an ongoing and guaranteed income in retirement. This is the case, regardless of how long you may live.
With the AIG American Pathway 5 fixed annuity, there are certainly some very nice features attached to it. However, this particular annuity can also fall somewhat short – and quite frankly, there could be some better options that are available out there for you. This is particularly true if you are seeking lifetime income, along with the added opportunity for more growth.
So, if you still have any questions about the American Pathway 5 fixed annuity – or even if you would like more information on annuities in general – please feel free to contact us via our secure contact form.
Do You Have Any Additional Questions on the AIG American Pathway 5 Fixed Annuity? Did You Notice Any Mistakes in this Review?
We realize that this review of the AIG American Pathway 5 fixed annuity was a bit lengthy. So, we would like to thank you for sticking with us thus far. In offering our reviews of annuities, though, we would much rather provide “too much” detail, rather than not enough. So, if you felt that this annuity review was helpful, then please feel free to forward it and share it with others who you think may also find it beneficial.
In addition, we know that information about annuities can – and often times does – change. Therefore, if you did happen to notice any of the details in this review that are outdated or incorrect, please let us know and we will be happy to get the information corrected as soon as possible.
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