What’s covered in this Review?
In this review we’ll cover the following information on the American National Strategy Index Annuity Plus 10 annuity:
- Product Type
- Current Rates
- Realistic long term investment 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.
Considering an annuity – or any type of financial product or service – that can offer you principal protection, along with a lifetime income in retirement, is a big decision. So, if you are thinking about a product that will provide you with the ability to enhance your returns, while at the same time keeping your principal safe – and paying out a lifetime income stream in retirement – then the Strategy Index Annuity Plus 10 fixed index annuity from American National could be a viable solution for you.
But, before you move forward with purchasing this – or any – annuity, it is essential that you have a thorough understanding of just exactly how it works, and how it may or may not fit in with your specific financial goals.
Over the past decade or so, annuities have gotten much more popular, primarily as a manner of ensuring guaranteed lifetime income. An annuity can make it easy for you to make premium deposits, and to be sure that you will not run out of income in the future.
However, even though this can provide you with a reassuring feeling, the truth is that any annuity should be considered as a long-term financial endeavor that can typically have surrender penalties if you want to take out your money early. In some cases, you may need to hang on to an annuity for ten or more years in order to withdraw all of your money penalty-free. With that in mind, spending some time reviewing an annuity purchase before you sign on the dotted line can be extremely beneficial.
Even so, really understanding the nuts and bolts of how annuities work can be difficult – particularly when considering an index annuity product that tends to have many moving parts. When reading over an annuity’s “fine print,” you can often feel your eyes glaze over, as these products can be quite confusing, even for well-educated consumers.
Plus, what can often add the most amount of confusion has a lot less to do with the actual annuities themselves, but rather the way in which these products are presented to consumers by insurance and financial advisors.
Annuity and Retirement Income Planning Information that You Can Trust
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If you have been seeking out information on annuities online, or even if you have heard friends and family discussing these products, it is likely that you have encountered some conflicting information about them. This is easy, as there is a lot of confusing information about annuities out there.
Plus, even though there may still be a lot of very great websites on the Internet that are focused on marketing their annuities, some of these sites may try to lure you in so that you give them your contact information by making promises like the following:
- Guaranteed lifetime income
- Lowest fees
- Top-Rated Annuity Companies
- Highest Income Payouts
- Fast, Easy Annuity Quotes
However, while these claims may sound great initially, the truth is that they may or may not actually be all that they are cracked up to be. If you want to find out, then you’ve come to the right place – and we dare say, likely the only place – where you can actually find out if that’s so.
Insurance and financial sales people who are offering annuities will often do their very best to provide a rosy picture of how safe these products are. But, what they will often neglect to say is that there are also still some drawbacks to owning fixed indexed annuities, too – so this means that you need to know all of the potential angles prior to putting down your hard-earned retirement dollars into one.
This isn’t to say that what these agents are trying to sell you is a bad thing. What it does mean, though, is that as you get closer to retirement, it is critical that you are comfortable with the financial vehicles that you choose to get you to your goals. Likewise, you should know why you are choosing one particular product over others.
This annuity review is here to offer you a deeper understanding of all the details of the American National Strategy Index Annuity Plus 10. So, if you are ready to get started, let’s dive in!
American National Strategy Index Annuity Plus 10 at a Glance
|Product Name||Strategy Index Annuity Plus 10|
|Issuer||American National / ANICO|
|Type of Product||Fixed Index Annuity|
|Standard & Poor's Rating||A|
|Phone Number||(800) 252-9546|
Opening Thoughts on the American National Strategy Index Annuity Plus 10
American National Insurance Company – also known simply as ANICO – was initially founded in 1905. Over the past century, the company has grown and evolved into a well-respected member of the insurance industry.
ANICO offers a variety of protection and income products, including life insurance, accident, and health coverage, credit insurance, property and casualty insurance for personal lines, and retirement annuities.
The company is strong and stable financially, and it has a positive reputation for making timely payments to its annuity and insurance policy holders. It has consistently received high ratings from the insurer rating agencies, which include an A from A.M. Best Company (for over 100 years running), and an A from Standard & Poor’s.
With people living much longer today than at any other time in history, one of the primary concerns on the minds of retirees is that of outliving their income. But annuities can quell that fear by offering guaranteed lifetime income – regardless of how long you need it.
With a fixed index annuity, there is an opportunity for a nice return that runs in conjunction with an underlying market index, yet protection of principal during market downturns. Because of that, an annuity of this type may – at least initially – seem like the best of all worlds.
Yet, just like you would do when in the process of making any other high ticket purchase, it is absolutely essential that you review and understand exactly what you are buying – and what needs to happen in order for you to obtain your benefits. Otherwise, you could end up making a costly mistake that involves significant financial penalties if you want to get out of 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. American National 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 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 on for you, click here in order to obtain our free annuity report.
How American National Describes the Strategy Index Annuity Plus 10
According to ANICO, the Strategy Index Annuity Plus 10 is a multi-strategy that can offer you the safety of principal, the opportunity for growth, and a lifetime income.
With this particular annuity, there are multiple interests crediting strategy, which can allow you to diversify your funds, as well as your time frames, yet without the need to obtain multiple annuities. You can also ensure that you receive a pre-set interest rate that is compounded and credited each day on a 365-day basis.
It is also possible to receive a premium enhancement on your initial premium, which is added to your annuity value. And, when it comes to taking your income in the future, there are also a number of options. Here, the Strategy Index Annuity Plus 10 includes the option to include a lifetime income rider. In this case, there are actually two options – a lifetime income rider with fixed rate, and a lifetime income rider with fixed rate plus index credit – which can enhance the amount of income that you receive.
Both of these riders guarantee an income equal to a percentage of the income base for life – even if the annuity value were to decline to zero. The owner of the contract is able to elect to start receiving income after the first contract anniversary, and on or after the age of 50. (If there are joint owners, then this can occur when the younger individual reaches age 50). The owner of the annuity is allowed to start and stop the income payments at any time. However, once the owner has stopped payments if they decide to start receiving them again at a later age, the percentage that will be used will be the same percentage that was used when he or she initially requested their payments.
How a Financial Advisor May “Pitch” this Annuity
The American National Strategy Index Annuity Plus 10 is a fixed index annuity that can help you to ensure that your money is safe, yet also offers the opportunity to attain a higher return than that of a regular fixed annuity.
As with other annuities, the money in your account is allowed to grow on a tax-deferred basis. This means that you will not be taxed on the gain in the annuity until the time it is withdrawn – in turn, giving your account the ability to grow exponentially.
In addition, this annuity offers some other bells and whistles, such as a death benefit option that is payable to a named beneficiary at the death of the annuity contract. This means that loved ones can still benefit from the annuity in case of the unexpected.
Annuity owners may also be able to benefit from a nursing home confinement waiter, a terminal illness waiver and/or a disability waiver. In these cases, a market value adjustment won’t be imposed if the individual meets the qualification criteria to withdraw funds penalty-free.
But, while the points above may make this annuity sound ideal for many people, it is important to read the “fine print”, as these benefits can often times come at a significant cost. For example, while you can take advantage of the positive return that is gained in the underlying index, the Strategy Index Annuity Plus 10 uses a cap – which can essentially limit your overall return to less (in some cases, much less) than the return that is attained by the index.
As an example, the if the monthly sum strategy is used for crediting interest, the monthly changes in the underlying index (in this case, the S&P 500) will be compared, and each month, American National will calculate those changes in the index value as compared to the prior month.
However, these monthly increases are subject to a cap rate, while the decreases have no limit. This means that if there is a cap rate of 4%, and the underlying index returned 6% for that year, the account would only be credited with 4%.
You may also be subject to a participation rate – which here again, has the ability to limit your overall upward return. For instance, with a participation rate of 50%, your account segment would only be credited with 50% of the gain, and not the full amount of the return that year.
Also, if you opt for one of the lifetime income riders, a fee will be taken directly out of the annuity value each year. The charge for the lifetime income rider with fixed rate is 0.60% of the income base each year, and the lifetime income rider with fixed rate plus index crediting is 0.30% of the income base each year, and it is payable from the date that the annuity contract is issued until the rider terminates.
The rider premium will be deducted up to the annuity’s earnings. But, if no earnings are available for a given segment term the premium will instead be deducted from future contract years. Likewise, if any rider premium is outstanding upon the annuity’s surrender, then the fee will be taken out of the surrender value.
What About Fees on the American National Strategy Index Annuity Plus 10?
In the world of insurance and financial products, you would be hard pressed to find any vehicle that doesn’t come with at least some type of charges or fees – and the Strategy Index Annuity Plus 10 from American National is no exception.
First, there is the sales commission that goes to the agent who sells you the annuity. In this case, the commission is based on the age of the owner – and, in the case of joint owners, the oldest of these individuals will be used.
In addition, as explained above, there are rider fees incurred if the annuity owner opts to go with an income rider. And, there is also a surrender charge if you withdraw a portion – or all – of your annuity funds. This charge runs for eleven years after you have purchased the annuity. So, if you withdraw any more than 10% of the annuity’s value during this time, you will be hit with a charge – and, if you’re under the age of 59 1/2 at that time, you may also incur an additional 10% early withdrawal penalty via the IRS.
ANICO Strategy Index Annuity Plus 10 Surrender Charge Schedule
The Annuity Gator’s End Take on the American National Strategy Index Annuity Plus 10
Where it works the best:
This particular annuity will generally work the best if you are looking for:
- The opportunity to obtain a higher rate of growth
- Safety of principal
- Lifetime income
Where it works the worst:
Conversely, this annuity may not work out so well for those who:
- Want to fully participate in market gains
- Need or want access to most or all of their capital within the first 11 years
- Do not intend to use the guaranteed lifetime income feature
There are many factors that need to be considered when you are thinking about the purchase of an annuity. Overall, for instance, annuities should always be considered as a long-term endeavor – and because of that, these vehicles will generally be more appealing to those who are seeking retirement income in the future and also to those who may be working to build up as much as possible in order to generate that future income stream.
Even though the Strategy Index Annuity Plus 10 from American National does clearly offer some attractive features, it may also very well fall short – particularly in comparison to some of the other alternatives out there that may be available to you.
In reality, because everyone’s situation is different, the only real way to determine whether or not this is the annuity for you is to test it using our American National Strategy Index Annuity Plus 10 calculator. Rather than going with a whole lot of “what ifs,” we can plug in figures that pertain to your personal financial goals and time frame, and in turn, can come up with a spreadsheet that can help you in coming up with your plan.
So, if you have any questions regarding whether or not the Strategy Index Annuity Plus 10 is the right alternative for you – or, if you would like to move forward and obtain your free spreadsheet – the just reach out to us through our secure contact form now.
Have Any Additional Questions? Did You Notice Any Mistakes?
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Also, as humans will sometimes do, we all tend to make some mistakes. So, if you happened to notice any while you were going through this annuity review, then please let us know. We are always more than happy to make any corrections and to give credit where credit is due. If you are an investor and this review causes you any confusion and/or if it creates any additional questions, then please reach out to us as well. While we are not always able to get back with you right away, we can usually clear up any questions within a day or two.
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