What’s Covered In This ReviewIn this review, we’ll cover the following information on the Forethought ForeIncome 7-Year Annuity:
- Product Type
- 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.The consideration of an annuity – or any financial product – that can offer you security, along with an ongoing income stream in the future, is a big decision. But, if you have been reading up on the Forethought ForeIncome 7-Year fixed indexed annuity, it could fit into your overall financial plans, as it can provide you with principal protection and certain other guarantees. However, before you dive in and purchase this or any other annuity, it can be helpful if you know all of the facts, especially those that pertain to how the product works, and how it may (or may not) actually help you to attain your future financial goals. Over the past decade or so, given a large number of Baby Boomers who are retiring or approaching that time in their lives, annuities have become extremely popular. One reason for this is the guaranteed income stream that they can provide. Because of annuities’ appeal, there are more financial advisors that are offering these vehicles to their clients. But this is not necessarily a good thing, mainly because even if an advisor is vying to do the right thing for his or her clients, they may not always be providing the whole picture. In addition, due in large part to the popularity of annuities, the array of annuity offerings that are now available has grown substantially in order to help investors to essentially “customize” them to fit their particular needs. This, however, has made many annuity products extremely complex – even for well-educated consumers (as well as for many advisors). With that in mind, it is always a good idea to truly understand what it is that you are purchasing – especially because an annuity could comprise a significant portion of your retirement savings. And, once you get into an annuity, it can be very difficult to get out, given the potential fees and penalties that are usually involved.
Annuity and Retirement Income Planning Information that Can Be TrustedIf you have not been to our website in the past, we’d like to personally welcome you here to AnnuityGator.com. We comprise a team of experienced financial professionals and are dedicated to providing you with comprehensive, nonbiased, annuity reviews. We have been providing very detailed reviews of annuities for many years, and because we have been in this industry for the long term, we have become a well-known and trusted source of information. If you have been looking for more details about annuities on the Internet, it is likely that you have come across a wide array of details about them – some of which can actually be conflicting. This isn’t surprising because there are not only a lot of annuities out there to choose from, but each one of them can offer different features and benefits, and also comprise a great deal of “fine print” in the contract. You may also have attended a seminar on annuities, where a financial advisor will provide you with lunch or dinner, and present information on the benefits of owning an annuity. In fact, that may even be what led you to look for more information online. While there many very good websites that are focused on marketing their annuities online, some of these tend to lure in visitors with promises like:
- Fast Annuity Quotes
- Low fees
- Top-Rated Annuity Carriers
- Highest Income Payouts
- Guaranteed Income for Life!
|Product Name||ForeIncome 7-Year Fixed Indexed Annuity|
|Issuer||Forethought Life Insurance Company|
|Type of Product||Fixed Indexed Annuity|
|Standard & Poor's Rating||A- (Strong)|
|Phone Number||(855) 244-4440|
Opening Thoughts on the Forethought ForeIncome 7 Year AnnuityForethought Life Insurance Company entered into the life insurance business in 1985. So, while its 30+ year history still makes it a relative newbie in the industry, the company has quickly become a top seller of fixed and fixed indexed annuities. The company actually started out focusing on preneed funeral expense insurance plans. However, over time, Forethought has added a list of related products like annuities – and, several years ago when Forethought added annuity capabilities from The Hartford, it increased its position with regard to annuities. Today, Forethought Life Insurance Company is a part of the Global Atlantic Financial Group – which holds in excess of $45 billion in assets (with roughly $19 billion of that attributable to Forethought). So, given the company’s strong financial position – along with its good reputation for paying out policyholders’ claims, Forethought is rated highly by Standard & Poor’s, and it is also rated as an A+ company by the Better Business Bureau. Largely due to the ups and downs of the stock market over the past decade or so, the demand for fixed indexed annuities has increased significantly, as they can help with increasing your return, while at the same time keeping principal safe from volatility. However, the growth potential for these types of annuities can often be inflated – leading to the future disappointment of the annuity purchaser. Not that most financial advisors are trying to do wrong by their clients, but many may focus on the plusses, without also adding in the factors that should be considered regarding these complex financial vehicles.
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. Forethought 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 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, <Contact Us> in order to obtain our free annuity report.
How Forethought Life Insurance Company Describes the ForeIncome 7-Year FIAOn the Global Atlantic Financial Group’s website, the company describes fixed indexed annuities as products that have “upside potential with downside market protection.” And, as it pertains to the ForeIncome annuity, the company states that – along with the added Guaranteed Lifetime Withdrawal Benefit (GLWB), the annuity includes “a choice of interest crediting options – 10% with no interest credits added, or 7.5% plus an additional dollar amount of interest credits annually (minus withdrawals).” In addition, this annuity can help you to meet the need for predictable lifetime income in retirement. This annuity is available to applicants who are between age 50 and 80, with a minimum premium limit of $25,000 (on the initial premium), and a maximum of $1 million (per person). The annuity also offers several additional features, such as the:
- Guaranteed Lifetime Withdrawal Benefit (GLWB) – This benefit can offer an income feature via guaranteed lifetime withdrawal amounts.
- Guaranteed Minimum Surrender Value (GMSV) – The GMSV is a separate value that is tracked independently from the annuity’s contract value. This can offer an increase in the annuity’s contract value – however, it is only used if the guaranteed withdrawal benefit has not been activated.
- One-year Annual Point-to-Point with Cap, based on the S&P 500
- One-year Monthly Point-to-Point with Cap, based on S&P 500
- Three-year Point-to-Point with spread, based on Barclays ARMOUR ll Index
- One-year Fixed Rate
How Financial Advisors May “Pitch” the ForeIncome 7-Year FIA from ForethoughtThe ForeIncome fixed indexed annuity offers the features of a traditional fixed indexed annuity, along with an available Guaranteed Lifetime Withdrawal Benefit (GLWB). It also offers a Guaranteed Minimum Surrender Value – which could increase the value of the annuity contract upon surrender. If you have been approached by a financial advisor who is offering you this particular annuity, it may be that he or she focused on certain features that it offers – such as the opportunity for higher growth than a fixed annuity (and other fixed financial investments such as bonds and CDs), as well as the annuity’s ability to offer you a guaranteed lifetime income stream. With that in mind, most educated consumers are likely aware that insurance and financial companies will typically show their product offerings in the brightest light so that they appear to be more enticing. For instance, if you are hoping for high growth plus safety of principal, then you may well think that this is the perfect option for you. But, it is essential to note that, if you are being offered this – or any – annuity by a commissioned financial advisor, then it is likely that they are going to explain the product to you while highlighting all of its positive features. When you take a closer look at the product’s material, though, you will be able to delve a bit deeper into some of the other items that should be considered prior to moving forward with the annuity purchase. For example, even though advertisements about this annuity will typically tout “market-linked returns, without the downside risk,” a closer look at the brochure will also reveal that “Caps and spreads are declared at the beginning of each strategy term, and any calculated index credit is credited at the end of the strategy term. The strategy terms are 1 year for S&P strategies and 3 years for Barclays strategy, 1 year for Fixed Rate Strategy.” In addition, even if the underlying index that is associated with this annuity has a stellar return in a given year, the annuity contains a “cap” on that growth – so in essence, the amount that you can return in any given year will be limited to the amount of that cap. Also, the Guaranteed Minimum Surrender Value has the potential to increase the contract value, however, it will terminate on the activation date of the Guaranteed Lifetime Withdrawal Benefit. So, while you may be able to attain a nice return, along with guaranteed income in retirement, the reality is that these features can typically be found on any fixed indexed annuity – and, if you are able to find these features, along with some added benefits, it could be worth your while to take a look at the other alternative(s) prior to making your purchase decision. The bottom line here is that, even though there are definitely some nice features associated with the Forethought ForeIncome 7-Year Fixed Indexed Annuity, once you have “locked up” your money in this product, it can be too late for you to change your mind if or when a better option were to come your way. Given that, if you still aren’t 100 percent sure that the Forethought ForeIncome 7-Year FIA is right for you – and you would like to have some answers to any additional questions about this annuity – then feel free to reach out to us directly via our secure contact form. We understand just how confusing it can be when you are trying to determine whether or not a complex financial vehicle like a fixed indexed annuity is best for you. But, having a more in-depth understanding of what you need to look for in this products is crucial, as an annuity can comprise a large percentage of your overall retirement savings. If you would like to have additional assurance that you know what it is that you are buying, then click here now to download our free report on what you need to know prior to purchasing an annuity. Fees Associated with the Forethought ForeIncome 7-Year Fixed Indexed Annuity On top of understanding how your funds may perform in an annuity, it is also pertinent that you know about any of the fees that you may encounter as a result of owning one. While most any financial product will incur some fees, fixed indexed annuities are known for being complex products – and at times, the amount and the duration of their fees may be well hidden within the fine print. Just some of these fees can include an up-front sales commission for the advisor who sold you the annuity. These products will also typically include ongoing administrative and contract charges. Also, if you need or want to withdraw some (or all) of your money within the first few years of purchase, you will also likely be hit with a surrender charge. In the case of the Forethought ForeIncome 7-year FIA, there are seven years of surrender charges. These are allocated as follows:
Seven Year Surrender Charge Schedule
The Annuity Gator’s End Take on the Forethought ForeIncome 7-Year Fixed Indexed AnnuityWhere it works best: This particular annuity will typically work the best if you are looking for:
- The opportunity for additional index-linked growth
- Safety of principal in years when the underlying index performs negatively
- Guaranteed lifetime income
- Want access to most or all of your money within the first 7 years
- Do not intend to use the lifetime income feature