What will be covered in this review?In today’s review, I’ll be covering the following information on the Farm Bureau Accumulock Indexed Annuity:
- Product Type
- Current Rates
- Realistic Long-Term Investment Expectations
- How It Is Used
- How It Is Most Poorly Used
Annuity and Retirement Income Planning Information You Can TrustIf this is the very first time that you’ve visited our website, then please allow us to officially welcome you to AnnuityGator.com. We make up a team of annuity professionals who have a key focus on offering unbiased, yet highly comprehensive, annuity reviews online. We have been doing this for quite some time now – far longer than our “copycat” competitors. And, because of this, we have come to be known as a highly trusted source for annuity information. If you’ve been spending time looking for as much information as possible about annuities on the Internet, it is likely that you’ve run across many conflicting details about these particular types of products. This is not at all surprising, though, as there are many annuities out there today – and everyone seems to have a different opinion about them. It is possible that you also may have attended an annuity seminar or workshop in the recent past. There, in return for a “complimentary” meal, the presenter may have gone into detail about the Farm Bureau Accumulock indexed annuity – or some other similar product. Following that seminar, you may even have made a follow-up appointment with the presenter or with another financial advisor, with the purpose of purchasing an annuity. In fact, it may have been your attendance at that seminar that has ultimately brought you here to our site in search of more information. If you have spent any amount of time looking for annuity information online, then it is likely that you’ve come across some of the other annuity marketing websites. Many of these will attempt to lure you in by making bold claims, such as:
- Guaranteed lifetime income
- Lowest Fees
- Top-Rated Annuity Companies
- Highest Income Payouts
- Fast, Easy Annuity Quotes
Farm Bureau Accumulock Indexed Annuity at a Glance
|Accumulock Indexed Annuity
|Type of Product
|A.M. Best Rating
Opening Thoughts on the Farm Bureau Accumulock Indexed AnnuityFarm Bureau Financial Services was initially founded back in 1939 when the state Farm Bureau founded Iowa Farm Mutual Insurance Company with the purpose of meeting the unique liability insurance needs of farmers. Over the years, the company grew – and expanded its product line – to include life insurance and retirement annuities. Today, the company has roughly 4,000 agents who actively market the company’s insurance and annuities (both fixed and fixed indexed). Based on the financials of all three subsidiaries of the Farm Bureau Financial Companies – which include Farm Bureau Life Insurance Company, Farm Bureau Property and Casualty Company, and Western Agricultural Insurance Company – A.M. Best has provided a rating of A (Excellent). Because of the constant ups and downs of the stock market over the past several years, many investors have become somewhat leery about going full force into the equities market without some amount of protection to shield them from losses. With that in mind, indexed annuities have become much more sought after by consumers as a way to obtain a guaranteed income for life, as well as an opportunity to keep principal safe regardless of what the market does. However, while this can sound like the best of all worlds scenario, the truth is that if something sounds too good to be true, it probably is – and in this case, you will need a bit more information in order to discover the whole story. This is particularly the case if your decision about an annuity could ultimately result in you committing a large chunk of your hard-earned retirement savings.
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. Farm Bureau 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, click here to obtain our free annuity report.
How Farm Bureau Describes the Accumulock Indexed AnnuityFarm Bureau Financial Services describes the AccumuLock Indexed Annuity as a product that takes all the benefits and guarantees of traditional fixed annuities and adds two distinct advantages – growth opportunities tied to market gains and protection from market downturns. In fact, the Farm Bureau website goes on to state that indexed annuities “are often considered the best of both worlds, taking advantage of potential gains in the market while protecting you from loss with a guaranteed minimum interest rate.” With the AccumuLock indexed annuity, just as with other annuities, funds can be accumulated on a tax-deferred basis. And, you can make guaranteed annual withdrawals in retirement, without the worry of outliving your savings. There are some other “bells and whistles” that are associated with this annuity, such as the Simple 7 Income Rider, which can allow you to receive a paycheck for life.
How a Financial Advisor May “Pitch” this AnnuityGiven the seemingly “best of all worlds” scenario that fixed index annuities tend to provide, it is likely that an insurance or financial sales rep will pitch the annuity as a way for you to grow your retirement savings, and to keep your money safe. Plus, given that people are living longer today than at any other time in history, this annuity can also help to alleviate the fear of running out of money before running out of time. Yet, even though growing your money, keeping it safe, and knowing that you will have an income for life can initially sound like the best of all worlds, there are also some things that you need to know about the Farm Bureau AccumuLock Indexed Annuity before you dive in head first. For example, even though fixed index annuity products can have the ability to provide a larger return than that of a fixed annuity, in most cases – including right here – that positive return will be “capped.” So, if the underlying index that your money is tracking has an absolutely stellar return in a given year, your money will only be able to take part up to a certain amount. (Kinda like only getting half-way in the pool – where you’re only getting partially cooled off on a hot day). In addition, if you need to get at more than 10% of the money that is in your annuity contract – at least for the first eight years – you will incur a surrender fee. (Plus, if you are under the age of 59 1/2 when you make such a withdrawal, you can also incur an additional 10% “early withdrawal” penalty from the IRS).
What About Fees on the AccumuLock Indexed Annuity from Farm Bureau?Even if you searched far and wide, you will likely be hard-pressed to find any financial or insurance product that didn’t have at least some amount of fees. The AccumuLock Indexed Annuity from Farm Bureau is no different. For instance, if you withdraw more than 10% of the annuity’s contract value within the first full nine years, you will incur a withdrawal fee. These charges will start at 9% and grade down each year until year ten. Plus, if you withdraw funds from the annuity when you are under the age of 59 1/2, then you will also incur an additional 10% “early withdrawal” charge from the IRS.
The Annuity Gator’s End Take on the Farm Bureau AccumuLock Indexed AnnuityWhere it works best: This particular annuity will usually work the best for those who are looking for:
- The opportunity to obtain a higher rate of growth
- Safety of principal
- Guaranteed lifetime income
- Want to fully participate in market gains
- Want or need to access their funds penalty-free within the first 9 years of purchasing the annuity
- Do not intend to use the guaranteed lifetime income feature