What’s Covered In This Review
In this review, we’ll cover the following information on the American General Power Select Fixed Index Annuity:- Product Type
- Fees
- Current Rates
- Realistic long term return expectations
- How this annuity is best 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 a financial product that can provide you with principal protection, as well as the opportunity for increased returns – along with one that can provide you with a lifetime stream of income in the future – then the American General Power Select fixed index annuity could be a viable option for you. But before you run full steam ahead into purchasing this – or any – annuity, it is always best to get a clear understanding of just exactly how the product will work, as well as how it may, or may not, work for you and your specific financial goals. Over the past several years, annuities have become increasingly popular as a way of providing a guaranteed lifetime income stream in retirement. Because of this, the number of financial and insurance advisors who provide these products 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 very best information regarding a fixed indexed annuity that you’re considering purchasing. Also, due in large part to annuities’ growing popularity, insurance companies have been expanding their product lines to include “hybrid” and other types of products that can come with a lot of bells and whistles. This can make these already complex products even more confusing – even for well-educated individuals. In consideration of this, it is critical that you know what it is that you’re purchasing because, in many instances, the purchase of an annuity could require a considerable amount of your hard-earned retirement savings. And, if you happen to find out too late that an annuity you buy isn’t really the right one for you, it can be extremely expensive (in terms of penalties and fees) for you to get out.
Annuity and Retirement Income Planning Information that You Can Trust
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American General Power Select Plus Fixed Index Annuity
Product Name | Power Select Plus |
---|---|
Issuer | American General |
Type of Product | Fixed Index Annuity |
Standard & Poor's Rating | A+ |
Phone Number | (800) 445-7862 |
Website | https://www.aig.com/individual/investments/annuities |
Opening Thoughts on the American General Power Select Plus Fixed Index Annuity
American General Life Insurance Company initially began offering its products more than 160 years ago. Throughout that time period, the company has paid out in excess of $38 billion in claims and it has served more than 13 million customers. The firm is headquartered in New York City, NY. The company has a long and vast history of providing both insurance and investment products across the U.S. – and it has built up a very wide and strong network of distributors. The mission of American General is to be the “premier provider of protection, investment, and income solutions that are needed for both financial and retirement security.” The company is highly committed to providing better and more innovative ways of helping their policyholders and clients protect their savings and financial security. Today, American General Life Insurance is a part of the AIG (American International Group) network. Based in large part on the continued volatility of the market over the past several years, the demand for fixed indexed annuities has expanded substantially – particularly as a way for people to obtain higher potential index-linked returns, while at the same time maintaining the safety of principal. However, even though this might initially sound like the best of both worlds, when something sounds too good to be true, it typically is. So, it is important that you take some precautions before you move forward with the purchase of this, or any, annuity, as you do not want to find out the negatives when it’s too late to get out without a hefty penalty.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. American General 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 American General Describes the Power Select Plus Annuity
American General describes the Power Select Plus FIA as being a viable option for those who are looking to accumulate more assets for retirement, while also avoiding the risk of losing their principal in a down market. The company also states that this annuity (as is any annuity) should be thought of as being a long-term financial solution. The Power Select Plus can provide the following benefits during the “accumulation,” or savings, period:- Protection – Protection of principal during market downturns. (As a side note, the account balance in this annuity will decrease due to withdrawals and/or fees)
- Growth – Based on your choice of index crediting strategies, your retirement funds can earn a nice return – one that could be higher than that of a regular fixed annuity.
- Accumulation – Because your funds are allowed to grow on a tax-deferred basis (meaning that there is no tax due on the gain in the contract until the time of withdrawal), it can grow and compound exponentially over time.

How a Financial Advisor Might Pitch this Annuity
The American General Power Select Plus Fixed Index Annuity is a product that could help you to build up your retirement savings through potential interest, as well as the protection of your principal – even in massive market downturns. As with other annuities, the Power Select Plus annuity allows the tax-deferred growth in your account. This means that there is no tax due on the gain in the account until the time of withdrawal – which could ultimately allow your money to grow and compound exponentially over time. This particular annuity also offers some additional “bells and whistles” like an income rider that can guarantee rising income for up to ten contract years. In some cases, you may even be able to double your retirement income potential. Yet, while all of these features sound hunky dory, it is essential that you first read the fine print regarding this annuity before you jump in with both feet. That’s because there can be some stipulations that need to be met in order for you to attain many of this annuity’s benefits. For example, as with most other indexed annuities, there is a cap on the returns. So, if the underlying index has a stellar year, your upward momentum will essentially be limited. Also, in order to have the opportunity to double your retirement income potential, you cannot make any withdrawals during the first ten contract years. Likewise, for the guarantee of rising income in the first ten contract years, you cannot take any withdrawals that exceed 6.5% per year. In addition, in order to add this optional income rider, there is an annual fee of 1.10% of the income base. This annuity also promotes a 5% enhancement/bonus to your initial premium. But, when you take a closer look at the small print, you will find that this is only available for premiums totaling $100,000 or more. Further, this premium enhancement “vests” over the first ten contract years. So, during this period of time, if the annuity holder dies, or if you convert the contract to income, or you make withdrawals that are too large, you will have to give up a portion of the premium bonus.What About the Fees on the American General Power Select Plus Fixed Index Annuity
In today’s financial world, you would be hard pressed to find any product that doesn’t include at least some amount of fees. The American General Power Select Plus fixed index annuity is no different. In this case, you can be hit with an initial sales commission, as well as annual administrative charges and fees. There is also a fee incurred if you want to add the Lifetime Income Plus guaranteed living benefit rider that ensures the growth of your income base by locking in the greater of interest that is earned from the annuity, or an annual income credit of 6.5%. Here, there is an annual rider fee of 1.10%. And, while you are allowed to withdraw a small amount from your contract each year, taking out more – or all – of your money during the first 11 contract years will subject you to a withdrawal charge.Withdrawal Charge Schedule for the American General Power Select Plus Fixed Index Annuity
Contract Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11+ |
---|---|---|---|---|---|---|---|---|---|---|---|
Charge % | 10 | 9 | 8 | 7 | 6 | 5 | 4 | 3 | 2 | 1 | 0 |
The Annuity Gator’s End Take on the General American Power Select Plus Fixed Index Annuity
Where it works the best:
This annuity will typically work the best for those who are seeking:
- Safety of principal
- The opportunity for additional, index-linked growth
- Guaranteed lifetime income in retirement
- For people who need access to their money right away – or even during the first decade of owning this annuity
- For people who are not looking for guaranteed lifetime income
In Summary
There are a wide array of criteria that need to be considered if you are trying to determine which – if any – annuity is right for you. In all cases, an annuity should be considered a long-term financial vehicle, and the money that is used for purchasing this product should not be an amount that you may need for another issue soon after making your annuity purchase. When thinking about the purchase of a fixed indexed annuity, you can be secure in knowing that your money is safe from market ups and downs and that you can have an ongoing lifetime income in retirement. With regard to the American General Power Select Plus fixed index annuity, there are no doubt some nice features. But, quite frankly, this annuity could also fall somewhat short. With that in mind, there may be some better alternatives out there for you. If you do have any questions regarding how this annuity may fit in with your specific savings and future income goals, then please feel free to reach out to us here through our secure contact form.Have Any Other Questions? Did You Notice Any Mistakes on this Review?
We realize that this annuity review of the Power Select Plus annuity from American General may have been a tad bit longer than usual. But, we would much rather that you have too much information on this product than to not have enough. So, if you found this annuity review to be beneficial, please feel free to pass it on and to share it with other people who could also find value in it. (And, if you found it to be confusing, please also let us know that, too.) In addition, we are aware that information regarding annuities can, and often does, change. So, if you happened to notice anything in this review that should be updated or revised, let us know and we will be happy to make the necessary edits. Any other annuities that you would like to learn more about? If so, just give us a shout and let us know. Our team of annuity geeks will hop on the case and get the details out there as soon as possible! Best, The Annuity Gator