What’s Covered in this Review?
In this review we’ll cover the following information on the Protective Life’s Indexed Annuity II:
- 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’ve been considering the purchase of a financial product that can provide you with principal protection, as well as the opportunity for increased returns – along with one that can provide you with a lifetime stream of income in the future – then the Protective Life Indexed Annuity II could be a viable option for you.
However, prior to heading right out and plunking a large chunk of your retirement money into this financial vehicle, it can be extremely beneficial – and ultimately cost effective – for you to first get a deeper understanding of how this annuity may or may not fit in with your overall financial goals.
Over the past decade or so, annuities have become much more popular with investors as a way of getting a guaranteed, ongoing income stream in retirement – particularly because stock market performance can be so unreliable. Yet, this may not necessarily be a good thing because, even though most financial advisors work hard to do what is right for their clients, some of these sales agents may not be providing the best or most knowledgeable advice regarding these products.
Plus, because of annuities’ rise in popularity with investors, there are many insurance companies that have expanded their product lines with products that feature a lot of “bells and whistles.” (These are often referred to as “hybrid” annuities). So, this has had the effect of making these products – which are already somewhat confusing – even difficult to understand for well-educated consumers.
As a result, it is important that you know just exactly what it is that you are getting into, as locking yourself into one of these products and then trying to get out at a later time could cost you in “surrender” penalties.
Annuity and Retirement Income Planning Information You Can Trust
If this is your very first visit to our website, allow us to welcome you here to AnnuityGator.com. We are a team of experienced financial pros who are highly focused on offering the most comprehensive, and unbiased, reviews of annuities. We’ve been at this for many years – much longer than our competitors, and so we have become a well-known source of annuity information.
With that in mind, if you’ve been in the process of looking for more information about annuities via the Internet, then it’s a good possibility that you have noticed there’s a lot of conflicting information out there about these products. This, however, isn’t really a surprise, because there is also a great deal of confusion about how they work, and which type may be best for certain circumstances.
You may also have attended an annuity seminar or workshop recently where, in return for a free dinner or lunch, you were provided with details about the Protective Life Indexed Annuity II (or some other annuity). Attending this seminar may even be the catalyst that has ultimately led you right here to our website.
But even though there are a plethora of websites that market their annuities to consumers, there are a fair number of these sites that will attempt to “lure” you in by making very enticing claims like:
- High-income payments
- Lowest annuity fees
- Guaranteed lifetime income
- 7 – 8% Rate of Return
While these claims can be inviting, the truth is that it is absolutely essential that you first make sure that they are actually true. This is particularly the case if you are seriously thinking about moving a large sum of your retirement savings into one of them.
In addition, if you really look closely at the information that is provided on other, more quality annuity-related websites, you will likely notice that many of them are just simply repeating the information that you can find here first. That’s known as a concept called “copycatting.”
In any case, whatever the reason is that you landed here on our AnnuityGator.com website, you are definitely in the right place if you want to find out more about the Protective Life Indexed Annuity II. That’s because we provide all of the details and resources, including not just the good, but also the bad and the ugly. This is really the only way that you will be able to make a truly well-informed buying decision (or alternatively, making the decision to pass on this annuity, and move on to something else that may be more suitable for your specific financial goals).
Just to be clear here, we do want to state that we believe annuities can be a good financial option for many people…as long as the annuity that is purchased fits in well with your overall current and future plans.
This annuity review is provided here for you in order to help you ensure that you’re moving in the right direction with this (and/or other) annuity and to guide you in what to look for in terms of the pros and the cons.
So, if you are ready to get started, let’s go!
Protective Life Insurance Company’s Indexed Annuity II
|Product Name||Indexed Annuity ll|
|Issuer||Protective Life Insurance Company|
|Type of Product||Fixed Index Annuity|
|Phone Number||(800) 833-8991|
Opening Thoughts on the Protective Life Indexed Annuity II
Protective Insurance Company has been in the business of offering financial enhancement and protection for more than 110 years. The company was founded in 1907, and since that time, it has grown and expanded – adding a wide range of products and services.
The company has in excess of $427 billion of life insurance coverage in force. Headquartered in Birmingham, Alabama, Protective Life offers many different annuity options. Today, the company is a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Ltd.
Protective Life and Annuity Insurance Company has earned high ratings from the insurer rating agencies. These include:
- A+ from A.M. Best
- AA- from Standard & Poor’s
- A+ from Fitch Ratings
Due primarily to the ongoing ups and downs of the stock market, fixed index annuities have become much more popular over the past decade or so. One reason for this is because these types of annuities can seemingly offer a “best of all worlds” scenario, including the safety of principal, the opportunity for index-linked growth, and a guaranteed stream of income in retirement.
Yet, while this may at first glance seem like an ideal way to go with your savings, if something sounds too good to be true, it typically is! Therefore, it is essential that you read the “fine print” before you move forward with the purchase.
Before we get into the gritty details, here are some legal disclosures…
This is an independent product review, not a recommendation to buy or sell an annuity. Protective Life Insurance Company has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This review is meant to be an independent review at the request of readers so that they may see our perspective when breaking down the positives and negatives of this particular annuity. Prior to purchasing any type of investment or insurance 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 circumstances. All names, marks, and materials that were used for this review are the property of their respective owners.
For more information on how to compare annuities in order to determine which one may be right for you, click here to obtain our free annuity report.
How Protective Life Describes the Indexed Annuity II
Protective Life describes the Indexed Annuity II as “the right choice if you want to benefit from the features of an annuity and desire protected lifetime retirement income and asset protection with the potential for higher returns linked to the performance of a market index.”
Purchasers of this annuity can allocate their initial purchase payment among one fixed and three indexed crediting strategies. The interest rates for the Fixed, Trigger, and Annual Point to Point strategies are locked in for the first contract year, with the interest rate for the annual cap rate to term strategy being locked in for the chosen withdrawal charge period, as of the date that the application was signed.
There are some other benefits that come with the Indexed Annuity II, such as a:
- Healthcare Waiver of Withdrawal Charges
- Unemployment Waiver of Withdrawal Charges
- Death Benefit
More information on these, and how they could work to your benefit can be found here.
How a Financial Advisor Might “Pitch” This Annuity
If you have been offered the Indexed Annuity II from Protective Life by a commissioned insurance or financial representative, it is likely that they focused on the positive benefits of this annuity, such as its opportunity for index-linked growth, the safety of principal, and its ability to provide a stream of lifetime income in the future. But, they may or may not have placed a focus on items that could be considered potential drawbacks.
For example, even though some indexed annuities in some cases may be able to provide a higher return than other “safe” alternatives like CDs or money market accounts, it is more likely – especially in our current low interest rate environment, that even the money that is in an indexed annuity will provide a return that’s closer to 2 or 3%.
Case in point, the fine print in the Protective Life Indexed Annuity II brochure states that “all non-guaranteed components of the indexing formula may change and could be different in the future. Indexed interest could be less than that earned in a traditional fixed annuity and could be zero.”
Doesn’t sound quite the same as some of the annuity marketing websites profess, does it?
Plus, because the beginning index value for each portion of your initial purchase payment is determined as of the date each portion is applied to the contract, there could actually end up being multiple index performance percentages calculated during the first contract year. Then, after the first contract anniversary date, Protective Life will then determine the second contract year’s beginning index value for each of the indexed crediting strategies.
What About the Fees on the Protective Life Indexed Annuity II?
It can be extremely difficult today to find any type of financial or insurance product that doesn’t charge at least some fees in order to put your money to work. The Indexed Annuity II from Protective is no different.
In this case, many of the optional features of the annuity will cost an additional amount of premium. For example, the SecurePay SE rider – which can help to ensure guaranteed growth now with steady and predictable income later – will cost an additional 0.85% each year.
As with most other annuities, the Indexed Annuity II from Protective will also charge a surrender fee if you withdraw more than 10% of the annuity’s contract value within the surrender period. The amount of this charge will depend on the interest rate guarantee that is chosen – either a 5-year, 7-year, or 10-year.
Protective Life Indexed Annuity II Surrender Charge Schedule
The Annuity Gator’s End Take on the Protective Life Indexed Annuity II
Where it works best:
The Protective Life Indexed Annuity II may be a viable option for you if you are looking for:
- Protection of your principal
- Potential for higher growth
- A lifetime stream of guaranteed income
Where it works worst:
This particular annuity may not be your best alternative if you:
- Want access to more than 10% of your contract value within the first several years (depending on the length of the surrender charge)
- Do not plan to use the guaranteed lifetime income feature
In order to truly know how this annuity may (or may not) work for you, feel free to check out our free annuity report here.
There can be a long list of factors that should ideally be considered when you are thinking about purchasing an annuity. In any case, though, these financial vehicles should be approached as a long-term commitment, as they can be quite expensive to get out of.
With fixed index annuities like the Protective Life Indexed Annuity II, you can be assured that your funds are safe from market volatility and that you have the ability to receive an ongoing income in retirement – no matter how long you live.
So, the Protective Life Indexed Annuity II does certainly provide some nice features. On the other hand, this product can also fall short, and there could be a better option out there for you.
If, after reading this annuity review, you still have any questions on the Indexed Annuity II – or any other annuity, for that matter – then please feel free to contact us via our secure contact form here.
Any Other Questions? Did You Happen to Notice Any Mistakes?
We know that this review was a bit on the long side. But we would much rather provide too much detail than not enough. That way, you can better compare the pros and the cons of an annuity that you may be considering purchasing.
If, however, you do still have any questions about this (or any other) annuity, please feel free to reach out to one of our experts here at AnnuityGator.com through our secure contact form right here.
In addition, if there are any other annuities that you would like more information, just let us know that too and our annuity geeks will get on the case and post more reviews.
The Annuity Gator