What is Covered in this Annuity Review?
In this review of the North American Prizm Plus 14 Fixed Indexed Annuity, we will go over the following details:
- Product Type
- Current Rates
- Realistic long-term return expectations
- How this annuity is best 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 are currently in the process of considering an annuity, then it is important to know that these products can be a logical choice if you are seeking a lifetime income in retirement, along with other key benefits.
Before you dive headfirst into the purchase of an annuity, though, it is essential that you have a good understanding of just exactly what these products do – and don’t do – and that you also know how the type of annuity that you’re considering will work.
For instance, with the North American Prizm Plus 14 fixed indexed annuity, you have the opportunity to earn an index-linked return, while at the same time, ensuring that your principal is safe – no matter what occurs in the stock market. As with other annuities, you can also choose from several different income options, which includes one that pays you an income stream for the remainder of your life, regardless of how long that may be.
Throughout the past decade or so, fixed indexed annuities have become quite popular with those who are approaching retirement. Due to this increase in demand for these products, the number of insurance and financial advisors who are offering them to their clients has grown substantially. This is not necessarily a good thing, though.
With so many new annuities coming into the marketplace – many with a long list of “amenities” – they can be quite confusing, for both consumers and financial representatives. Given that, unless the insurance or financial advisor that you work with has a focus on dealing with annuities, you really should do some additional research so that you know exactly what you might be getting into.
An annuity is considered to be a very long-term commitment. And, while their products may offer a number of enticing features, you need to make sure that these features are right for you and your specific goals.
That’s where we come int.
Annuity and Retirement Income Planning Advice You Can Trust
If you’ve never been to our website in the past, please allow us to personally welcome you to AnnuityGator.com. We make up a term of annuity professionals who focus on offering both comprehensive and unbiased annuity reviews. We have been at this for quite some time now – far longer than our competitors have – and because of that, we’ve come to be known as a trusted source of annuity information online.
Over the past several years, there have been a number of “copycat” websites that have sprung up. But, while these sites may at first seem informative, the reality is that many of them are only reiterating the details that you can find here.
If you have been seeking information on fixed indexed annuities via the Internet, then it is likely that you have run across a lot of conflicting details about these products. This is not really surprising, though, because there are many annuities available today, and just about everyone seems to have a differing opinion about them.
It is also possible that you have recently attended a seminar about annuities. There, in return for a complimentary dinner or lunch, the presenter may have gone into detail about the North American Prizm Plus 14 – or some other, similar annuity product. After this seminar, you may have made an appointment to follow up with the presenter (or with another financial advisor) in order to purchase this annuity for yourself. It may even be that seminar that was the ultimate reason you’ve landed here today on our website, in search of more information.
In any case, if you are looking for more in-depth information regarding the Prizm Plus 14 annuity from North American Life, then you are definitely in the right place. In fact, we dare say that this is the only place where you will find the good, the bad, and the downright ugly about this annuity – but having all of these details on hand is the only way to make a well-informed determination as to whether or not it is the best option for you.
So, if you are ready to start the review, let’s go ahead and dive in!
North American Prizm Plus 14 Fixed Indexed Annuity at a Glance
|Product Name||Prizm Plus 14|
|Issuer||North America Company for Life & Health Insurance|
|Type of Product||Fixed Indexed Annuity|
|S&P Rating||A+ (Strong)|
|Phone Number||(866) 322-7066|
Opening Thoughts on the North American Prizm Plus 14 Fixed Indexed 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.
Over the past several years, fixed index 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.
But, even though this may all sound enticing, the truth is that when something sounds too good to be true, then you probably 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. North American 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 North American Describes the Prizm Plus 14 Fixed Indexed Annuity
North American describes the Prizm Plus 14 as a flexible premium, fixed indexed annuity that offers the ability to apply all or a portion of the premium between two accounts: an index account or a fixed account. The initial premium may be allocated to these two accounts as the policyholder wishes, and funds can then be transferred between accounts one each contract anniversary for the life of the annuity.
In addition to the tax-deferred growth that can be attained on this annuity, there are some other, additional features, such as:
- A death benefit
- An 8% premium bonus on all premiums that are received in the first seven contract years
- The opportunity to elect a life annuity payout option that is based on the Accumulation Value after the first contract year
- Minimum guaranteed rates
There is also a nursing home confinement waiver on this product, whereby after the first contract anniversary, should you become confined to a qualified nursing home facility for at least 90 days, you may be able to withdraw up to 100% of the annuity’s accumulation value without penalty. This waiver is automatically included on the product, and there is no additional charge for it.
How an Insurance or Financial Advisor Might “Pitch” this Annuity
Because the Prizm Plus is a fixed indexed annuity, it is likely that an insurance or financial advisor may “pitch” this product by keying in on the ability to get an index-linked return, while at the same time, keeping your principal safe – regardless of what happens in the market.
In addition, while this may seem like the best of both worlds, you can also receive lifetime income from this product – which can help to alleviate the worry about running out of money in retirement.
But before you get out your checkbook and dive into owner the Prizm Plus 14, there are a few other details that are important for you to know. For instance, as with many other fixed indexed annuities, the Prizm Plus 14 applies an index cap rate – otherwise known as an upper limit – when calculating your interest credits each year. This means that, regardless of how high the underlying index may perform in a given year, the upper end of the return will be “capped.” And, even though the cap rate will never fall below the guaranteed rate, at this time, that guaranteed rate is only 1%…not much different than putting your money in an easily-accessible bank savings account.
The Prizm Plus 14 annuity also has a participation rate applied. Here, once a gain has been calculated using either the monthly average index account or the annual point-to-point, the participation rate will be applied to the overall return that you ultimately receive.
A participation rate is a percentage that is multiplied by the gain at the end of the contract year and is used for determining the interest credit to your annuity contract. As an example, if the participation rate is 80%, and the underlying index returns 10% during a given year, then the return credited to the annuity’s account would be 8%. (This is because 80% of 10% equals 8%). In the case of the Prizm Plus 14, the participation rate is guaranteed for the first year, then it can then change each year thereafter. It will never fall below 10%.
What About Fees on the North American Prizm Plus 14 Fixed Indexed Annuity
It is important to know what fees you may be subject to with the Prizm Plus 14 annuity, as these could make a big difference in terms of how much you return on this product and/or whether or not you will receive back all of the months that you put in.
For instance, while most annuities have some sort of surrender charges if you withdraw more than 10% of the contract value within the first few years, the North American Prizm Plus 14 actually has 14 years of surrender charges – and they start out at a whopping 18%.
|Contract Year||Surrender Charge %|
The Annuity Gator’s End Take on the North American Prizm Plus 14 Fixed Index Annuity
Where 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 than that of a regular fixed annuity
- Safety of principal
- A long-term commitment to the product
- Lifetime income
Where it works worst:
Conversely, the North American Prizm Plus 14 Fixed Index Annuity may not fare so well for those who:
- Want to fully participate in market gains
- Want or need to access their funds penalty-free within the first 14 years of purchasing the annuity
- Do not intend to use the guaranteed lifetime income feature
There are many factors that should ideally be taken into consideration if you are thinking about purchasing an annuity. These should include – but are not limited to – how the annuity can produce a return, how safe your money will be, how the income will pay out, and whether or not there are any other optional features that may be added to the annuity (as well as any added costs).
If you are in fact considering the purchase of a fixed index annuity, then you can be assured that your principal will be safe, regardless of what occurs in the stock market, or even the economy as a whole. These annuities will also provide you with an opportunity to grow your retirement funds, and to receive a guaranteed income in the future for as long as you need it.
But there can still be some questions left unanswered – and, the only way to really know if this particular annuity could be right for you is to test it with an annuity calculator. If this is something you would like to pursue, we can offer you a personalized look at how the North American Prizm Plus 14 fixed indexed annuity might perform – based on your specific parameters. Then, once we have run these numbers, we’ll provide you with a detailed spreadsheet at no charge to you.
Do You Still Have Any Additional Questions? Did You Notice Any Mistakes in this Review?
While we realize that this annuity review was a bit on the long side, our feeling is that we would rather provide you with a lot of details than with not enough. This is really the only way to get the full picture. Therefore, if you did find that this annuity review was beneficial to you, then please feel free to forward it on and to share it with anyone else that you think may benefit from it as well.
In addition, we also know that details about annuities – and other financial products, too – can and do change somewhat quickly. With that in mind, if you happened to notice anything in this review that needs to be corrected and/or updated, please let us know that as well and we will get on the revisions right away.
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