What Will Be Covered in this Annuity Review?In this review, we will be going over the in-depth details about the Sentinel Security Life Personal Choice 5 Annuity, including:
- 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.
The decision to purchase any type of financial product or service should always be made with caution – and this is especially the case as you make your choices about what to do with the lifetime of savings that you’ve built up (and/or are continuing to build up) for your future. If you have been thinking about obtaining an annuity for the purpose of increasing your retirement savings in a safe way, while also providing a guaranteed lifetime income in retirement, then the Sentinel Security Life Personal Choice 5 annuity could be a viable option for you. Yet, before you go out and purchase this annuity with the thought that it is providing you the “best of all worlds,” it is really important for you to have an in-depth understanding of what you can expect from this financial vehicle. Admittedly, annuities can be very beneficial for some people – provided that they are purchased for the right reasons (and those reasons shouldn’t be solely for the selling agent to get a nice, fat commission). Unfortunately, these products are sometimes sold incorrectly. Not that most insurance and financial advisors are trying to put one over on you, but rather because annuities are oftentimes misunderstood. They are somewhat confusing products – and, as more and more annuity options are put out into the marketplace, they will likely get even more so. This is the case for both consumers and financial professionals. So, unless your current advisor has a primary focus on annuities, it’s probable that you would be doing yourself a huge favor by learning more. That being said, you could sit down with a large cup of coffee and read over all of the minute “fine print” that comes with most annuities. That, however, can be about as enjoyable as having dental work done. This is where the Annuity Gator comes in!
Annuity and Retirement Income Planning Information That You Can TrustIf this is the first time you have stopped by our website, we would like to personally welcome you to AnnuityGator.com. We are a team of experienced financial professionals who are dedicated to providing you with non-biased and comprehensive annuity reviews. We’ve been offering in-depth annuity reviews for many years on our site, and because of that, we have become a trusted source. If you have been seeking information regarding annuities online, it may be that you have run across some conflicting details about these products. This, however, is not entirely surprising, as there are a lot of details, as well as many opinions. It could also be that you have recently attended an annuity seminar where the presenter went over the details regarding the Sentinel Security Life Personal Choice 5 annuity, or some other similar product. It this is the case, then you might have ended up here on our site in search of more information. Although there are some good websites out there on the Internet that discuss annuities, the reality is that some of these sites may try to “lure” visitors – for the sole purpose of getting your contact information – in by making claims such as:
- Highest income payouts
- Lowest Fees
- Top-rated annuity carriers
- Guaranteed income for life
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Sentinel Security Life Personal Choice 5 Annuity at a Glance
|Product Name||Personal Choice 5|
|Issuer||Sentinel Security Life|
|Type of Product||Multi-Year Guarantee (MYGA) / Fixed Annuity|
|A.M. Best Rating||B++|
|Phone Number||(800) 247-1423|
Opening Thoughts on the Sentinel Security Life Personal Choice 5 AnnuityFounded in 1948, Sentinel Security Life was initially established to provide families a way of funding funeral expenses and burial costs. Today, this company has expanded its product offerings, and it now has a primary focus on life insurance and annuity products, as well as Medicare Supplement and hospital indemnity coverage. The company offers two annuity products, which are both designed for meeting the growing needs of those who are retired and/or planning for that time in their lives. The Sentinel Personal Choice Annuity, for example, is a single premium deferred annuity that offers what the company deems as a high rate of return, as well as a high level of customization. Because this product allows you to “lock in” a guaranteed rate, it is considered a fixed, Multi-Year Guarantee, or MYGA, annuity. Due to the vast amount of volatility that has taken place in the market over the past decade or so, the demand for fixed annuities has grown significantly – primarily as a method for retirees, and those who are saving for retirement, to keep their money safe. But, because of the historically low-interest rate environment that we have been living in for nearly the past decade, unfortunately, the “price” of keeping your principal safe has come in the form of very low returns – returns that usually can’t even keep pace with the rate of inflation. This, then, could have an impact on your future purchasing power and, in turn, your overall retirement lifestyle.
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. Sentinel Security Life 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, click here in order to obtain our free annuity report.
How Sentinel Security Life Describes the Personal Choice 5 Annuity ProductSentinel Security Life describes the Personal Choice 5 annuity as a financial vehicle that has the flexibility to meet your needs. For example, you can choose to lock in your initial interest rate for five years. (There is also a seven and a ten-year option). In addition to that, this annuity allows you to add various optional features – or riders – that can further customize it to your particular needs. These riders include the following:
- Required Minimum Distribution – This rider will waive the surrender charge and the market value adjustment on any required minimum distribution from the annuity.
- Preferred 10% Free Withdrawal Rider – This rider waives the surrender charges and the market value adjustment for the first withdrawal per year after the first contract year. In this case, the annuity can withdraw the greater of 10% of the account value (as of the last contract anniversary date), or the required minimum distribution. (Note that surrender charges and a market value adjustment can apply if the withdrawal exceeds the greater of 10% of the required minimum distribution, or there are multiple withdrawals in that contract year).
- Terminal Illness / Nursing Home Care Feature – This rider waives the surrender charge if the owner is diagnosed with a stroke, heart attack, life-threatening cancer, or any other terminal illness. This feature also waives any surrender charge when the owner requires skilled nursing care for more than 90 consecutive days.
- 72(t) Free Withdrawal – This rider will waive the surrender charge and market value adjustment that is associated with withdrawals made in accordance with IRS Code Section 72(t).
- Death Benefit – This rider will waive the surrender charge that is associated with a lump sum payment in case of the death of the annuitant. This rider is required for purchases of this annuity where the annuitant is between the age of 86 and 90.
- Accumulated Interest Withdrawal – This rider waives the surrender charge and market value adjustment that is associated with accumulated interest withdrawals.
How an Insurance or Financial Advisor Might “Pitch” this ProductIf you are being offered the Sentinel Security Life Personal Choice 5 annuity by an insurance or financial advisor, then it is likely that he or she has keyed in on some of the best features about it, such as the guaranteed interest rate for the first five full years – regardless of what occurs in the market and / or with interest rates in the economy. 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. In addition, the fact that you can get a guaranteed income stream for life (provided that you choose the lifetime income option) is definitely another key point. But unfortunately, like most anything else in life, there is no such thing as a “free lunch.” So, in getting all of these guarantees, you also need to be mindful of just exactly what it is that you’re giving up. In this case, fixed annuities are known for offering painfully low rates of interest – and because of that, owning this annuity could make it difficult for you to meet, much less beat inflation. In turn, this could result in a dwindling purchasing power over time that could cause you to have to cut back on buying the items and services that you need in the future. Do you really want to worry about that during retirement? Plus, while you are still in the annuity’s guarantee period, you could also be losing out on other, higher-interest rate investments. In this case, because your money is locked into this annuity – which will charge you a surrender fee if you make large withdrawals for the first five years – you could find that you’ll have to forgo other, more profitable, financial opportunities. Also, you will want to really be sure that, if you add one of the riders to this annuity, you want to keep it for the long term. That is because once an optional rider has been selected, it may not be removed during the time of the annuity contract.
What About the Fees on the Sentinel Security Life Personal Choice 5 Annuity?Although annuities like the Sentinel Security Life Personal Choice 5 can provide you with a lot of certainties, sleeping well at night can actually come at a cost. In fact annuities as a whole are oftentimes riddled with charges and fees – and the Personal Choice 5 from Sentinel Security Life is no exception. For starters, you will be charged an annual fee for each and every one of the riders that you choose to add to this annuity. These costs are as follows:
- Required Minimum Distribution Rider – .16%
- Preferred 10% Free Withdrawal – .08%
- 72(t) Free Withdrawal – .05%
- Accumulated Interest Withdrawal – .08%
- Terminal Illness / Nursing Home Care Rider – .15%
- Death Benefit Feature – .35%
The Annuity Gator’s End Take on the Sentinel Security Life Personal Choice 5 AnnuityWhere this annuity works best:
- If you are seeking protection of principal
- If you want a set rate of growth (at least for the first 5 years)
- If you want the security of knowing you’ll have a guaranteed income in retirement
- If you want the opportunity for a higher return
- If you do not plan to use the lifetime income feature