What Will We Cover in this Annuity Review?
In this review, we’ll cover the following information on the American Equity Investment Life Insurance Company RateShield 7 fixed annuity product:
- 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 are thinking about the purchase of a financial vehicle that can provide you with a guaranteed rate of growth and protection of principal, along with a lifetime income in retirement, then the American Equity Investment Life RateShield 7 Fixed Annuity may be a good alternative for you.
One reason for this is because fixed annuities can provide you with a set rate of tax-deferred growth. So, no matter what happens in the market, your principal in this annuity will remain safe.
Plus, if you are concerned about having enough income in retirement, this annuity can pay out a guaranteed stream of income, regardless of how long you may need it. So, this can alleviate worry about running out of income before essentially running out of time.
But, while this might sound like a good deal before you go out and purchase this – or any other – annuity, it is important that you have a good understanding of how the product works, and what it will (and will not) do for you.
Throughout the past several years, the purchase of fixed annuity products has increased significantly. This is due in large part to the many guarantees that these types of annuities offer – both during the accumulation phase, as well as during the time that the annuity pays out.
But, given the increased demand for annuities lately, there have been a lot of new products coming into the marketplace – many with various bells and whistles, which can make them somewhat confusing…even for financial advisors and well-educated consumers.
This, in turn, can lead to the purchase of products that may or may not perform as expected. So, unless your current insurance or financial representative has a primary focus on annuities, you might want to spend some time learning more about how these financial vehicles work – especially as you could be placing a substantial portion of your hard earned savings into it.
That’s where we come in!
Annuity and Retirement Income Planning Information You Can Actually Trust
If this is the first time that you have visited our website, then please allow us to officially welcome you here. At Annuity Gator, we make up a team of annuity experts who focus on providing highly comprehensive, yet unbiased, annuity reviews. We have been doing this for many years now – far longer than our competitors have – and because of that, we’ve become a highly trusted source of annuity information.
Recently, though, there have been numerous “copycat” websites that have been popping up all over the Internet. And, while some of these may be able to give you some basic information regarding annuities, what you are likely going to find is that these sites are often just simply reiterating what our information here already shows.
If you’ve been researching annuities for any length of time, it is also possible that you have come across some conflicting details about these products. This is not uncommon, though, as there are a plethora of differing opinions about them.
It could also be that you have attended a seminar about annuities where the presenter provided you with information about the American Equity RateShiled 7 fixed annuity, or some other similar product. It is also possible that you have a follow-up meeting with that individual to discuss details about how this annuity could be “the one” for you.
It could even be that you landed here on our website in search of additional details regarding the RateShiled 7 fixed annuity, and while you were surfing the Internet, you may have run across other annuity-related websites. Many of these sites will work hard to lure people in by promising a number of bold claims about the annuities they offer, such as:
- Lowest Fees
- Highest Payouts
- Top-rated carriers
- Guaranteed lifetime income
Look familiar?
As nice as these features may sound, though, it is important that you first verify that they are even true – especially if you plan to contribute a fairly sizeable portion of your nest egg to one of these companies’ products.
If you are looking for more information on the American Equity Investment Life Insurance Company’s RateShield 7 fixed annuity, though, you are definitely in the right place. In fact, dare we say that this is the only website where you will actually be able to find all of the key details that you need for making a well-informed decision about this (and other) annuity. This includes the benefits and the drawbacks of this product.
Just as an FYI, we want to state that we believe annuities can – and often are – very good products for people to have in their overall financial plans. But this is the case ONLY if the annuity fits in with their other short- and long-term financial goals.
So, if you’re ready to begin this American Equity Life RateShield 7 annuity review, then let’s go ahead and get started!
American Equity Investment Life RateShield 7 Fixed Annuity at a Glance
| Product Name | Income Outlook Plus 5 |
|---|---|
| Issuer | National Western Life Insurance Company |
| Type of Product | Fixed Indexed Annuity Rider |
| S&P Rating | A (Strong) |
| Phone Number | (800) 922-9422 |
| Website | www.nationalwesternlife.com |
Opening Thoughts on the American Equity Investment Life RateShield 7 Fixed Annuity
American Equity Investment Life is considered to be a specialist in the area of annuities. The company was founded in 1995, and while that may not seem like a very long time as compared to other insurance companies, this insurer has definitely made its mark in the annuity arena – especially fixed and fixed indexed annuities.
The company is strong and stable from a financial perspective, and it has earned high ratings from the insurer rating agencies, including an A- (Excellent) from A.M. Best Company, and an A- from Standard & Poor’s.
Over the past few years, fixed annuities in have become much more popular with investors. One of the primary reasons for this is because these products can provide the opportunity for a guaranteed rate of growth, while also keeping the account value safe and sound, no matter what occurs in the stock market.
And, just like other types of annuities, a fixed annuity will also be able to pay out a lifetime income in retirement so that you don’t have to worry about your income stream running out. In this case, you can count on a specific amount of income in the future.
However, while this may sound like a win-win-win scenario, the truth is that whenever something sounds “too good to be true”, it very well may be. In any case, it can be beneficial to at least check the information further, in order to ensure that you know all of the advantages, as well as any potential drawbacks.
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. American Equity Investment 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 out perspective when breaking down the positives and the negatives of this particular annuity. Before purchasing any type of insurance and/or investment 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 situation. All of the names, marks, and materials that were used for this annuity review are the property of their respective owners.
For more information on how to compare annuities in order to determine which one may be the best for you and your financial circumstances, to obtain our free annuity report.
How American Equity Investment Life Describes the RateShield 7 Fixed Annuity
American Equity Investment Life describes the RateShield 7 Fixed Annuity as a fixed annuity that is designed to help generate a guaranteed income source through an established rate while protecting hard-earned dollars.
The company also touts this annuity’s simplicity – which basically means that it doesn’t really offer the bells and whistles that some other annuities do. It also means that it really doesn’t stand out – although when it comes to your retirement savings, that can be perfectly ok for many people.
The RateShield does offer a death benefit that may be paid out to a named beneficiary (or beneficiaries) in one lump sum if the annuitant should pass away before receiving all of the income. The amount of this lump sum would be the greater of the contract value or the surrender value. And, there would be no surrender penalty on this payout.
You also have the option of adding an income rider in order to enhance the income received in the future. So, for those who are purchasing this annuity with future income in mind, this can be a key benefit.
How an Insurance or Financial Advisor May Pitch this Annuity
Given today’s longer life spans, knowing that you’ll an income stream for life can be comforting. So, with that in mind, it is possible that if you have been offered the RateShield 7 annuity by your current insurance or financial advisor, they may have pitched this product by focusing on the guaranteed lifetime income stream.
In addition, because the stock market can be volatile, knowing that you have a fixed rate of return – without loss of principal – can also be highly appealing if you are retired, or you soon will be.
But even though the American Equity RateShield 7 annuity may sound like the perfect fit for you, it is important that you know both sides of the story. For instance, one of the primary concerns here is the return. That is because the returns that are offered on fixed annuities today are extremely low.
So, your chances of meeting – much less beating – future inflation are extremely small. This means that you may not be able to keep up your purchasing power with the rising cost of goods and services, which could make it quite difficult to buy the things you need in the future.
What About Any Fees?
It’s been said many times that the best things in life are free. But if that’s the case, the RateShield 7 fixed annuity may not fit the bill. That’s because, as with most other annuities, there are some fees that you’ll need to be mindful of.
In this case, if you opt to go with the income rider – which for many people, is the primary purpose of going with this product – there is a fee. This fee is deducted from the annuity’s contract value each year (as long as the rider is attached to the annuity).
In addition, even though you are allowed to withdraw up to 10% of the annuity’s contract value each year penalty-free, that can still leave a whole lot of money in the contract that will be penalized if you take it out during the surrender charge period.
The surrender charge period on the RateShield 7 will last for seven full contract years, meaning that if you withdraw more than 10% of the contract value during that time, you will incur a withdrawal charge penalty. These start at a whopping 9.2%, and then they gradually grade down as follows:
Withdrawal and Surrender Charge Percentages (Age 18 to 80)
| Age | Percentage |
|---|---|
| 60 to 64 | 5.0 |
| 65 to 69 | 5.5 |
| 70 to 74 | 6.0 |
| 75 to 79 | 6.5 |
| 80 to 84 | 7.0 |
| 85 to 89 | 7.5 |
| 90+ | 8.0 |
In addition, if you take any withdrawals from the annuity before you turn age 59 1/2, you could also incur an additional 10% “early withdrawal” penalty from the IRS.
The Annuity Gator’s End Take on the American Equity Investment Life RateShield 7 Fixed Annuity
Where it works the best:
As a fixed annuity, the RateShield 7 can work well for those who are seeking the following benefits:
- The opportunity for a set amount of return each year
- Protection of principal, regardless of what happens in the stock market
- Guaranteed lifetime income benefits (for an individual, or an individual and a joint income recipient)
Where it works the worst:
It is also important to consider the potential drawbacks of this annuity. This particular product will not likely be a good option if you:
- Don’t want your potential return to be held back by a cap
- Need access to more than just 10% of your contract value within the first seven years of owning the annuity
- Do not plan on utilizing the lifetime income benefits
In Summary
If you are in the midst of planning for retirement, then an income stream is likely a key component of your overall concerns. In this case, a fixed annuity like the RateShield 7 from American Equity Investment Life could be a very good choice.
But there can also be a long list of factors to consider if you are looking for the ideal annuity for your short- and long-term financial goals. These criteria should include how the annuity earns a return, as well as what you plan to do with it when you are ready to convert the contract to an income stream. Certainly, any additional fees and charges should also be considered, as these can have an effect on how much you are able to earn, and in turn, the amount of income you may receive.
If you are still considering the American Equity Investment Life RateShield 7 fixed annuity, then you are definitely be assured that your money will be safe – regardless of what happens in the market. In addition, there is also the plus of having an ongoing income in retirement, for as long as you may need it.
However, even though this annuity has all of these great features, it could still fall a tad bit short, depending on your particular needs. And because of that, there could be other annuities that may perform better for you.
If you’re interested in taking a closer look at how the American Equity Investment Life’s RateShield 7 annuity may perform based on your specific criteria, such as age, time frame, and number of income recipients, then we would be happy to run the figures for you – and we will do so for you at no charge or obligation. If you are interested in obtaining this information, then just simply contact us through our secure online form here.
Do You Have Any Questions About the RateShield 7 Fixed Annuity From American Equity?
While we understand that this review was a bit on the long side, our feeling is that we would much prefer to give you “too much” detail than not enough. So, we thank you for sticking with us this far.
If you found that this annuity review was beneficial to you, then please feel free to pass it along and forward it to anybody else who you think may also benefit from it. Likewise, if this review caused you to have even more questions, then please let us know that, too!
Are there any other annuities you would like us to review?
No problem! Just let us know the name of the annuity (or annuities), and our team of highly trained annuity “geeks” will get on it. Then, be sure to check back soon to AnnuityGator.com to view the new (and updated) reviews.
Best,
The Annuity Gator
P.S If you would like to read more of our American Equity annuity reviews here are some links to check out:
- American Equity Foundation Gold Annuity with Income Rider LIBR 6%
- American Equity Bonus Gold Annuity
- American Equity Choice 10 Fixed Index Annuity
- American Equity Foundation Gold Fixed Index Annuity
- American Equity Investment Life RateShield 10+ Fixed Annuity with IncomeShield Rider
- American Equity 7 MYGA Annuity
- American Equity Guarantee 6 MYGA Annuity
- American Equity Guarantee 5 MYGA Annuity
- American Equity Life Insurance Company IncomeShield 10 Fixed Indexed Annuity
- American Equity Investment Life Insurance Company IncomeShield 7 Fixed Indexed Annuity
