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Independent Review of the NAC North American Guarantee Choice 5 Year Annuity

What Will We Be Covering in this Annuity Review?

In this review, we will be covering the following details on the NAC North American Guarantee Choice 5 Year annuity:
  • Product typeIndependent Review of the North American Prizm Plus 14 Fixed Indexed Annuity
  • 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 have been looking for ways to grow money in a tax-deferred manner, while at the same time keeping your principal safe, and ensuring that you have a secure income stream in the future, then the North American Guarantee Choice 5 Year annuity could be a viable option for you. That’s because this MYGA (Multi-Year Guarantee) annuity provides an interest rate that is locked in for five full years, regardless of what occurs in the market. And, if you go with the lifetime income payout option, you’ll know that you can count on a stream of income for the remainder of your (and possibly also your spouse’s) lifetime, no matter how long that may be. But before you go out and purchase this seemingly “best of all worlds” financial product, there are some other things that you need to know, particularly because this is a long-term financial endeavor that could end up costing you money if you decide once you purchase it that it really isn’t the right vehicle for you. Given the increased popularity of annuities over the past several years, these products are being offered by a growing number of insurance and financial advisors. This, however, may not necessarily be a good thing. One reason for this is because annuities can have a lot of “moving parts” – which can make them highly confusing, even for well-educated consumers and some financial professionals. With that in mind, it is essential that you not only take at face value what your current advisor is telling you but that you also read very carefully all of the in-depth “fine print” before you plunk down what could be a large amount of your hard-earned retirement savings. This is where the Annuity Gator comes in!

Annuity and Retirement Income Planning Information That You Can Trust

If you’ve never visited our website before now, we would like to officially welcome you here. We are a team of financial professionals who are dedicated to providing you with non-biased and highly comprehensive annuity reviews. We’ve been offering in-depth annuity reviews for many years on our site – far longer than our competitors have, and because of that, we have become a trusted source of annuity information online. While been researching annuities via the Internet, you may have noticed that there are other “copycat” sites that try to provide you with annuity reviews, but in reality, many of these are actually just trying to lure you in and give them your contact information. Independent Review of the NAC North American Guarantee Choice 5 Year Annuity In order to get you to do so, some of these websites will make some fairly bold claims about the annuities they offer, such as the following:
  • Highest income payouts
  • Lowest Fees
  • Top-rated annuity carriers
  • Guaranteed income for life
  • Get your quote now!
Sound familiar? While these bold claims can sound pretty darn enticing, though, prior to moving forward, prior to moving forward with the purchase of any of these products, you should make sure that these claims are actually true. Otherwise, it could be extremely costly for you to get out of an annuity once you’ve gotten in and determined that it isn’t the best option for you. In getting a handle on all of the intricate details regarding the North American Guarantee Choice 5 Year Annuity, you can definitely in the right place. In fact, we dare say that our website is the only place where you will be able to find out all of the important details. This includes the good, the bad, and even the just plain ugly. This, however, is really the only way that you can truly decide whether or not this annuity is right for you. In many cases, insurance and financial professionals who offer fixed annuities will paint a nice, rosy picture of how their products provide safety – but will often leave out the details on the potential drawbacks that products have. With that in mind, before you move a chunk of your hard earned savings into one of these annuities, it is essential that you know the whole story. Just to be transparent here, we want to let it be known that we do believe that annuities can be good financial vehicles for many individuals – provided that the product fits in with your overall financial goals and needs. That being said, let’s go ahead and dive into this review!

The North American Guarantee Choice 5 Year Annuity at a Glance

Product NameGuarantee Choice 5 Year Annuity
IssuerNorth American Company for Life and Health Insurance
Type of ProductMYGA (Multi-Year Guarantee) / Fixed Annuity
S&P RatingA+ (Strong)
Phone Number(866) 322-7069

Opening Thoughts on the North American Guarantee Choice 5 Year Annuity

As one of the leading providers of annuities and life insurance in the U.S., North American has fulfilled its commitments to its customers ever since 1886. Unlike many of the other insurance carriers in the marketplace, North American is a privately owned company. Therefore, the company is not subject to the short-term earnings pressures that are often faced by publicly traded entities. North American is a part of the Sammons Financial Group, Inc., whose member companies offer a wide range of products, including annuities, life insurance, and retirement solutions. The parent company of Sammons Financial Group is Sammons Enterprises, Inc., a diversified holding company that owns and operates businesses across a diverse range of industries. An MYGA annuity – known as a Multi-Year Guarantee Annuity – is an annuity that is issued with a guaranteed interest rate period. Due to the constant ups and downs of the stock market – particularly over the past ten years or so – the demand for fixed annuities that offer guarantees has grown substantially, particularly as retirees and those who are saving for retirement vie to keep their money safe. But on the other side of the coin, due to the extremely low-interest-rate environment that we have been stuck in during this same time period, the “price” of keeping your money safe has come in the form of extremely low return. And these returns are hard pressed to meet, much less beat, the rate of inflation. This could then have a negative impact on your ability to continue buying the items and the services that you need in retirement.

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. North American Company for Life and Health Insurance has 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, click here in order to obtain our free annuity report.

How North American Describes the Guarantee Choice Annuity

North American Company for Life and Health Insurance describes the Guarantee Choice 5 Year annuity as a single premium, multi-year guarantee (MYGA) annuity product that offers the following benefits:
  • Competitive guaranteed interest rates for the entire term (in this case, five full years)
  • Multiple guaranteed interest rate periods/surrender charge periods (with MYGAs, the surrender period will typically last for the same duration as the interest rate guarantee period)
  • Tax-deferred growth
  • Banded interest rates (with a low band being $199,999 or less in premium, and a high bank considered to be $200,000 in premium or more)
  • Suitable for either qualified or non-qualified market
There are also some additional features that are included with this annuity. These include:
  • Death Benefit – North American Company will pay out, as a death benefit, the accumulation value to the named beneficiary upon the death of the owner or the annuitant. The beneficiary will be able to receive this payout in either one, single lump sum, or as a series of income payments. (If there are joint annuitants on this contract, the death benefit would only be paid to a beneficiary in the event of the death of the second annuitant).
  • Nursing Home Confinement Waiver – As an added benefit, North American will increase the penalty-free partial surrender amount by 10% of the contract’s accumulation value each year while the annuitant is confined to a qualified nursing home facility. This benefit will begin after the first contract anniversary, and the annuitant would need to be confined for a period of at least 90 consecutive days. There is no added charge for this benefit, although the issue age must be 75 or younger.
If you want to read over more of the in-depth details regarding the NAC North American Guarantee Choice annuity, you can check out the product highlight sheet HERE or the consumer brochure HERE.

How an Insurance Agent Might “Pitch” the Guarantee Choice 5 from North American

If you are like most people – especially those who are preparing for retirement – you probably like to know that you have certain guarantees when it comes to your money. You can get this with the North American Guarantee Choice 5 Year annuity (in fact, the word guarantee is right there in its name!) It is also beneficial that, regardless of what happens in the stock market during that time – as well as throughout the remainder of the annuity’s life – your principal will be safe. So, you don’t have to endure sleepless nights worrying about the loss of your hard-earned savings. Plus, because you also can choose an income stream that will last for the remainder of your lifetime (as well as someone else’s), you won’t need to worry about running out of retirement income down the road. However, just as with most anything else in life, there are always tradeoffs to be considered – especially in the case of guarantees. Therefore, you need to also be mindful of what you may be giving up in order to get these benefits. In the case of this particular annuity, it could be challenging for you to meet or beat the rate of inflation in the future – in turn, resulting in a lower amount of purchasing power each and every year. Do you really want to deal with that during your retirement years?

What About Fees on the Guarantee Choice 5 Year Annuity Product?

In addition to a low rate of return, there are also fees that you may need to contend with on this annuity – which can make your small return even smaller. One of these is the many years of surrender charges, meaning that if you are still within the surrender period, and you want to take out more than 10% of your annuity’s contract value, you’ll be penalized. In the case of the North American Guarantee Choice 5-Year Annuity, these charges are a pretty steep 10% across the board, each year for the first five years of the contract – and, if you start another interest rate guarantee period after the first five years have elapsed, then the surrender period begins all over again.

Contract Year123456+
Surrender Charge %10101010100*
*Note that the surrender period may begin again if another interest rate guarantee period is chosen.

The Annuity Gator’s End Take on the NAC North American Guarantee Choice 5 Annuity

Where this annuity works best:
  • If you are seeking protection of principal in any market condition
  • If you want a set rate of growth for a certain period of time, without the worry of losses in a volatile market
  • If you want the security of knowing you’ll have a guaranteed income in retirement
Where this annuity works worst:
  • If you want the opportunity for a higher return
  • If you do not plan to use the lifetime income feature

In Summary

There are many annuity products out there in the market to choose from. And, as these financial vehicles can, and often do, come with a lot of different features and benefits, it is important for you to know just exactly what it is that you are getting into. And, if you already own an annuity, you should also frequently review it to ensure that it’s performing the way you anticipated it to. When taking a look at the North American Guarantee Choice 5 Year annuity, you can rest assured that your principal will be well protected. You can also know that you will have a stream of income during your retirement years – and if you choose the lifetime income option, that won’t run out. But even with these great benefits, this particular annuity may still fall somewhat short – in particular, if you are looking for the opportunity for a higher rate of return. So in order to truly get a better idea of whether or not this product is the right one for you, you can have it tested, based on your specific financial goals and needs. We can do this for you, free and with no obligation, using our annuity calculator. If this is something that you’re interested in, just simply let us know here via our secure online contact form.

Have Any Additional Questions or Concerns About the NAC North American Guarantee Choice 5 Year MYGA Annuity? Did You Notice Any Mistakes in this Annuity Review?

We know that this annuity review was a bit lengthy, so we truly thank you for hanging with us through to the end here. In offering this annuity review, though, our thought is that it is much better to “err” on the side of giving too much detail than not giving you enough. Therefore, if you feel that this annuity review was, in fact, helpful, please feel free to forward it and share it with anyone else who you think may benefit from it. In addition, we also know just how quickly information about annuities and other financial products can change. So, if you noticed any information in this review that may need to be corrected or updated, then please let us know that, too so that we can go in and make the necessary revisions. Any other annuities you would like to see reviewed? No problem! Just let us know the name (or the names, if there’s more than one) of the annuity that you would like to see reviewed, and our team of annuity “geeks” will get right on the case and put the details up on our website. With that in mind, be sure to check back soon – and often! Best, The Annuity Gator Independent Review of the NAC North American Guarantee Choice 5 Year Annuity  

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