What Will Be Covered in this Review?In this review, we will be discussing the following information regarding the American Company Guarantee Choice Fixed Deferred Annuity:
- Product type
- Current rates
- Realistic long-term return expectations
- How it is used
- How it is most poorly used
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If you have been thinking about purchasing an annuity because you want the assurance of not running out of income in retirement, and you want to know that your principal is safe, then the North American Company’s Guarantee Choice Fixed Deferred Annuity could be a viable choice for you. But, before you go full steam ahead with getting this annuity, it is highly recommended that you first have a much more in-depth idea about how the product works – as well as how it may (or may not) be aligned with your specific financial goals. Then, once you are much more familiar with it, you can feel more comfortable with either moving forward with a purchase, or passing on this annuity and moving on to one that is more beneficial to you. As our life expectancy has gotten longer, deferred fixed annuities have become more popular. This is because these annuities can allow you to receive an ongoing stream of income far into the future – and that income can last for as long as you need it, regardless of how long that may be. Over the past decade or so, fixed annuities have become much more popular with people who are retired, as well as those who are approaching that time in their lives, as they can help to alleviate the concern about running out of money in retirement. Yet, even though this can sound very enticing, you really need to know what the other features of the annuity are, as they could actually be drawbacks – and because of that, the downfalls could possibly outweigh the income benefits that you’d get down the road. With that in mind, unless the advisor that you work with has a primary focus on selling annuity products, you really should do some additional research on these products, as they will oftentimes require that you deposit a large chunk of your savings into them. That’s where the Annuity Gator can come in!
Annuity and Retirement Income Planning Information That You Can TrustIf this is the first time you have visited our website, please allow us to personally welcome you to AnnuityGator.com. Here, we make up a team of annuity professionals who focus on offering highly comprehensive, yet unbiased, annuity reviews. We have been doing this for quite some time now – and far longer than our competitors have – and because of that, we have come to be known as a highly trusted source of annuity information online. Throughout the past decades or so, though, a number of “copycat” websites have sprung up on the Internet. But even though some of these sites can give you information about annuities and their benefits, what you are more likely to find is that these websites are often just reiterating the information that our website has. If you have spent any amount of time looking for annuity information online, then it is likely that you may also have run across some conflicting details about these financial vehicles. This isn’t really all that surprising, though, as there are a lot of annuities out there today, and everybody seems to have a differing opinion about them. In your research for more information about annuities, you may have run across some other sites that discuss annuities online. While these may initially seem informative, many of these websites are actually just trying to lure people in – in order to collect your contact information – by making some pretty bold claims, such as:
- High Annuity Income Payouts
- Guaranteed Income for Life
- Top-Rated Annuity Carriers
- Low Fees
North American Company Guarantee Choice Fixed Deferred Annuity at a Glance
|Product Name||Guarantee Choice|
|Issuer||North American Company for Life and Health Insurance|
|Type of Product||Fixed Deferred Annuity|
|S&P Rating||A+ (Strong)|
|Phone Number||866) 322-7069|
Opening Thoughts on the North American Company Guarantee Choice Fixed Deferred AnnuityAs one of the leading providers of annuities and life insurance in the United States, 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. Because so many people are living longer these days, it is essential to ensure that you have income during your early stages of retirement, as well as many years down the road. In fact, it’s not uncommon for people to live for 20, 30 or more years past their retirement date. A fixed deferred annuity can certainly help you to solve these concerns. However, it is also important to note that not all of these products are exactly the same. That’s why it can be extremely beneficial to do some research on the annuity itself, as well as the company that’s offering it before you commit what will likely be a significant sum of your retirement savings.
Before we get into the in-depth details, we have some legal disclosures to present…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. North American 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 more details 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 Company Describes the Guarantee Choice Fixed Deferred AnnuityAccording to North American Company for Life and Health Insurance, a fixed deferred annuity allows you to use the value that has built up in the contract during the accumulation period to give you either a lump sum payout or an ongoing income stream. Based on the product literature from North American Company, the Guarantee Choice is a flexible solution with the potential for a better return than some other fixed rate products. In this case, you choose the rate and guarantee period combination that is right for you. And, if you contribute $200,000 or more into this annuity, you will receive a higher interest rate than if you had contributed less. Your initial interest rate is guaranteed for a set period of time. And, once that initial interest rate period has elapsed, you will have a 30-day window of time in which to select a new guarantee period (from those that are available at that time). Alternatively, you could instead select a payout option, or withdraw the amount of your contract value. If no election is made, North American Company will renew your annuity for an available guarantee period that is described in the contract. In doing so, the interest rate that you receive from that next guarantee period could be higher or lower than your prior rate. There are a few additional “bells and whistles” on this annuity, such as a death benefit. In this case, if you should pass away before receiving back the equivalent amount of your premiums, then your named beneficiary (or beneficiaries) would get the remaining value of the annuity. The beneficiary can choose to receive these funds either a one single lump sum or alternatively in installment. This contract also includes a nursing home confinement waiver. Here, after the first contract anniversary, if you (the annuitant) should become confined to a qualified nursing home facility for at least 90 consecutive days, the company will increase the penalty-free withdrawal amount by 10% of the accumulation value each year while you remain in the nursing home facility. There is no additional charge for this rider, as it is included with the annuity automatically if you obtained the product when you are age 75 or younger. For all of the in-depth information on what you can anticipate from the North American Company’s Guarantee Choice annuity, you can take a look at the product brochure HERE.
How an Advisor Might Pitch this AnnuityBecause the Guarantee Choice offers income that will be available long into the future, it is likely that an insurance or financial advisor who is offering this product to their clients will key in on that feature. In fact, research from various retirement industry groups has shown that Americans are highly concerned about having enough money saved to support a comfortable retirement lifestyle. You also won’t need to worry about the constant ups and downs of the stock market in terms of the value of your contract. That is because, regardless of what happens in the market – or even in the economy overall – your principal will be safe in this annuity. But, while this might sound nice, it is also important that you have a good understanding of the “tradeoffs” that might be required in order to have access to such benefits. For instance, fixed annuities are not known for offering high returns – and in many instances, especially due to the low-interest rate environment we’ve been in for the past decade or so, you would be lucky to meet, much less beat, inflation with this particular contract. Also, if you (or the insurance company) opt to go with another interest rate guarantee period after your initial period has passed, a new surrender charge schedule will be applied. Unfortunately, this could have the effect of locking up your money for quite a few more years where you will incur a penalty if you withdraw more than 10% of the contract’s value.
What About Any Fees on the North American Company Guarantee Choice Annuity?Although annuities can provide you with some nice benefits, these products, in particular, are also known for the various fees that they charge. The North American Company Guarantee Choice Fixed Deferred Annuity is no exception. First and foremost, know that annuities are not very liquid products. In other words, if you want to take out more than 10% of the contract value during the surrender period, it will cost you a surrender, or withdrawal, charge. And in the case of the North American Company’s Guarantee Choice Fixed Deferred Annuity, the duration of the surrender period lines up with the time period for the interest rate guarantee. So, if you’ve chosen to guarantee your initial interest rate for ten years, then you can expect to incur a surrender charge if you opt to withdraw more than 10% of your money from this contract over the same ten year period. In addition, when your initial rate guarantee period has elapsed, if you choose to go with another guarantee period, guess what happens – a new surrender period starts all over again!
|Contract Year||10 Year||9 Year||8 Year||7 Year||6 Year||5 Year||4 Year||3 Year|
The Annuity Gator’s End Take on the North American Company’s Guarantee Choice Fixed Deferred AnnuityWhere this annuity works best: As a fixed deferred annuity, the Guarantee Choice from North American Company may be a good annuity product for those who are looking for the following benefits:
- A fixed rate guarantee for a set number of years
- Protection of principal
- Lifetime income
- Want the opportunity for a higher rate of return
- May need to take large withdrawals during the surrender period
- Do not plan to use the lifetime income feature