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Independent Objective Review of the Investors Heritage Income Advantage Annuity

What will we be covering in this review of the Investors Heritage Income Advantage Fixed Deferred Indexed Annuity?

In this review, we will be discussing the following details about the Investors Heritage Income Advantage Annuity:

  • Annuity Type
    Investors Heritage logo
  • How the Income Advantage Annuity Works
  • How Growth is Determined
  • Available Income Options
  • Where this Annuity Might Fit
  • How the Annuity Should Not Be Used

Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.

Saving for retirement is typically an important component of planning for the future. But building up a sizeable net worth still won’t guarantee that you’ll have a relaxing retirement – particularly if the stock market takes a fall and/or interest rates on fixed investments decrease (in turn, reducing your purchasing power on the items and services you want and need).

Over the past decade or so, some of the most relied-upon retirement income sources have stumbled upon hard times. Take, for instance, the employer-sponsored defined benefit pension plan – the type of plan that obligated a retiree’s former employer to pay a regular income stream – has all but disappeared.

These plans have for the most part been replaced with defined contribution plans that can offer some nice tax-related benefits, but also leave the creation of retirement income up to the individual. Unfortunately, this doesn’t always work out well.

Another common retirement income source – Social Security benefits – are also somewhat unstable. With fewer workers paying into the system, and more people filing for benefits, this system could run dry in the future. And if it does, millions of retirees may have to find other ways to generate incoming cash flow.

One financial vehicle that has become more popular in recent years is the fixed indexed annuity. These insurance products can provide market-linked growth, while at the same time keeping principal – and previous gains – safe…no matter what happens in the stock market.

In addition, fixed indexed annuities (FIAs) can also offer a reliable stream of income. This can continue for a preset number of years, such as 10 or 20 – or the income could continue for the remainder of your lifetime. With some annuities, the income may even continue for the remainder of two individuals’ lifetimes, such as a husband and wife.

The Investors Heritage Income Advantage fixed indexed annuity is one such product. In fact, the many flexible features and guarantees that are associated with this annuity make it the top guaranteed income annuity in the marketplace today.

However, even though an income annuity can give you financial peace of mind, these products can also be somewhat confusing. There are many different “moving parts” associated with fixed indexed annuities. So, it is essential that you know what you can – and cannot – anticipate before you jump in with both feet and make a long-term commitment to the Investors Heritage Income Advantage – or any – annuity.

This is where Annuity Gator can help.

Annuity and Retirement Income Planning Information That You Can Trust

If this is the first time you have visited our website, we’d personally like to welcome you to AnnuityGator.com. We are a team of experienced financial pros and retirement income experts who are dedicated to providing you with comprehensive and non-biased annuity reviews.

We have been offering these reviews for quite a few years now – much longer than our competitors have been – and because of this, we have come to be a highly trusted source of annuity information. We have hundreds of reviews cataloged in our annuity review database on our website. So, please feel free to spend as much time as you’d like looking over them.

If your search for annuities has been conducted through the Internet, it is likely that you have come across a lot of conflicting details about these products. This isn’t really all that surprising though, as there is a multitude of different annuities in the market today, and there are numerous opinions about them – both good and bad.

Even though there are a number of very good websites that are focused on marketing their annuities online, the reality is that some of these sites will work hard at “luring” you in by touting some pretty impressive claims, such as:

  •  High annuity income payouts
  •  Top rated annuity companies
  •  Guaranteed income for life
  •  Lowest annuity fees

Do these claims look familiar?

As nice as it would be to believe all of this – and have it be true – it is absolutely essential that you treat such claims the same way you would if you were considering the purchase of any other “high ticket” purchase, like a new car or home. After all, this is your retirement income we’re talking about!

With that in mind, you need to make sure that all of these claims are backed up before you move forward. This can oftentimes require that you look a bit deeper into the “fine print” about the annuity you are considering.

That’s where we come in.

If you really want to know more about the Investors Heritage Income Advantage fixed indexed annuity, you are in the right place. As a matter of fact, we dare say that AnnuityGator.com is the only place where you can find all of the key details that you need – including both the advantages and the items to consider – which can be extremely helpful in helping you to make the right decision as to whether or not this annuity is best for you.

So, if you’re ready to know more about the Investors Heritage Income Advantage annuity, buckle up and let’s get rolling!

The Investors Heritage Income Advantage Fixed Indexed Annuity at a Glance

Product NameIncome Advantage
IssuerInvestors Heritage
Type of ProductDeferred Fixed Indexed Annuity
A.M. Best RatingB++
Phone Number(800) 422-2011
Websitehttps://investorsheritage.com/

Opening Thoughts on the Investors Heritage Income Advantage Fixed Indexed Annuity

Investors Heritage was founded in 1960 by former Kentucky Lieutenant Governor, Harry Lee Waterfield. The company was built on a core set of principles that include looking someone in the eye when you talk to them, treat everyone with respect, invest in the future, and your word is your bond.

Given these “rules for life,” Investors Heritage is a financially sound company that offers knowledgeable and friendly customer service to its clients and policyholders. The company is also rich in technology, which helps to ensure that transactions are smooth and productive. In 2018, American Heritage was acquired by Aquarian Holdings.

While Investors Heritage is rated as a B++ by A.M. Best, the company is considered financially solvent – in this case, it has a solvency ratio of 110%, which means that it has plenty of assets to pay off any or all liabilities that it takes on. The company is also in the process of cutting costs.

Its solvency ratio places Investors Heritage near the top, as compared to its peers – and above many other insurers that have more favorable A.M. Best ratings, as well as competitors that have lower RBC ratios. (The RBC Ratio shows each company’s Total Adjusted Capital as a percentage of its required capital).

 A.M. Best RatingSolvency RatioRBC Ratio
New York Life Insurance CompanyA++114%507%
Pacific Life Insurance CompanyA+114%635%
Security Benefit Life Insurance CompanyA-111%430%
USAA Life Insurance CompanyA++110%560%
Investors Heritage Life Insurance CompanyB++110%535%
Northwestern Mutual Life Insurance CompanyA++110%531%
Protective Life Insurance CompanyA+110%479%
Sentinel Security Life Insurance CompanyB++110%224%
Great AmericanA+108%381%
Delaware LifeA-108%509%
Atlantic Coast Life Insurance CompanyB++107%258%
American EquityA-107%372%
AllianzA+106%378%

The company has kept its focus on products for retirement, savings, and end-of-life planning. Its mix of business does not contain high-risk products like variable annuities or long-term care insurance. This focused diversity allows Investors Heritage to provide the best products, technology, and service to its clients.

In addition, Investors Heritage has lower expenses than other insurance companies because they are in the process of launching an exclusive product. In this case, Investors Heritage is not contracting with thousands of insurance and financial advisors. Rather, they are only partnering with top advisors in the industry.

To learn more about where you can purchase the Investors Heritage Income Advantage fixed indexed annuity, contact us. We can also run a “test” on this annuity to determine whether or not it may be a good fit for you and your specific objectives.

Just a few of the recent Investors Heritage accolades include:

  •  Ranked the fastest growing U.S. life insurer with a Life and Annuity focus in 2018 by S&P Global.
  •  Named (in 2020) to the Inc. 5000 as one of the fastest growing, privately held U.S. companies.
  •  Ranked (in 2020) in top-ten fastest growing U.S. life insurers with a Life and Annuity focus for the second year in a row by S&P Global.

In early 2021, Investors Heritage expanded its annuity product offerings with the launch of the Heritage Income Advantage Fixed Indexed Annuity. This particular annuity is only available through certain groups, as it is a proprietary product.

Before we get into the gritty details, here are some legal disclosures we need to provide…

This is an independent product review, not a recommendation to buy or sell an annuity. Investors Heritage 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.

How Investors Heritage Describes the Heritage Income Advantage Fixed Indexed Annuity

Investors Heritage describes the Heritage Income Advantage Fixed Indexed Annuity as a single premium deferred annuity that is designed to grow your retirement savings and provide protection from market downturns through a variety of crediting strategies.

With a fixed indexed annuity like the Heritage Income Advantage, you can earn interest via a fixed account option that offers a guaranteed rate, as well as through accounts that are tied to several different market-related indexes.

Currently (as of April 1, 2021), the fixed account is offering 1.25%. There is also a 60-day rate lock in place that is available for initial premium payments if new money rates change. Each individual application has a 60-day period in which the higher applicable rates (on the application receipt date or the contract issue date) will be set for you.

The indexes that are currently available with this annuity are the:

  •  S&P 500 – The S&P 500 index is commonly used in fixed indexed annuities. The 1 Year performance (as of June 2, 2021) of the S&P 500 index is 36.59%, while over ten years, this index returned 12.35%. To learn more about the S&P 500 index, go here: S&P 500® – S&P Dow Jones Indices (spglobal.com).
  •  S&P MARC 5% – The S&P MARC (Multi-Asset Risk Control) 5% Index seeks to provide multi-asset diversification within a simple risk weighting framework, tracking three underlying component indices that represent three asset classes: equities, commodities, and fixed income. The Total Return version of the MARC 5% includes an interest rate on the cash outlay, which is calculated using the Effective Funds rate. Go here: S&P MARC 5% Index – S&P Dow Jones Indices (spglobal.com) for more in-depth details regarding the S&P MARC 5% index.
  •  SG Entelligent Agile 6% VT – This index uses Entelligent’s Smart Climate model to predict profitability and share price performance under different climate scenarios. This model is distilled into an “E-Score” for each company in the S&P 500, which allows the Index to rank each by climate risk preparedness. Its decision-making criteria are fully systematic and rules-based. For more in-depth details on the SG Entetelligent Agile 6% VT Index, go here.

When the underlying index(es) perform well during a given contract year, the account value is credited with a positive return – up to a preset limit, or “cap”. The upside return may also be subject to a participation rate.

As an example, if the annuity has a cap of 8%, and the underlying index(es) returns a gain of 10% for the contract year, the annuity will be credited with an 8% return for that period. If there is also a participation rate in place, the return that is credited will be based on a certain percentage. For instance, if the participation rate is 80%, and the underlying index(es) return a positive 10% for the year, then the return that is given to the account would be 8%. This is because 80% of 10% is 8%.

For more information and updated rates, you can view the Heritage Income Advantage Rate Sheet here.

In return for the somewhat limited upside is the 100% no-loss provision when the underlying index(es) perform poorly. So, even in the event of a stock market correction, the Heritage Income Advantage will not lose value.

This protection of both principal and previous gains can provide peace of mind – even in extremely volatile stock market conditions. Protected growth can also eliminate the possibility of having to make up for prior losses.

For instance, if you lose value in your portfolio, it can require a much larger future gain in order to just get back to even. As an example, if you start with $100,000 and you lose 50% of the value in one year, you would then be left with $50,000.

The next year, if your account went back up by generating a 50% gain, it would not be worth your original value of $100,000. Rather, it would then be worth just $75,000. That’s because a 50% gain on the $50,000 would only get you to $75,000 – which in this case would represent a loss of 25% based on your original $100,000. So, in order to just get back to square one, it would require a 100% gain to “right” the previous 50% loss.

$100,000 @ 50% loss = $50,000

$50,000 @ 50% gain = $75,000

$50,000 @ 100% gain = $100,000

As with other annuities, the funds that are inside of the account grow on a tax-deferred basis. This means that none of the gains are taxed until the time of withdrawal. This can allow for exponential growth over time – particularly as compared to a taxable account with all other factors being equal. It could also allow for an additional option for tax-advantaged accumulation, even if you have “maxed out” other alternatives like an IRA and/or employer-sponsored retirement plan.

Tax-Deferred versus Taxable Growth

In addition, an FIA – which is a type of fixed annuity – can also provide you with a guaranteed income stream. In the case of the Heritage Income Advantage fixed indexed annuity, the income stream is made possible with an optional rider that is known as a Guaranteed Lifetime Withdrawal Benefit Rider, or GLWB. This is one of the reasons why the Heritage Income Advantage annuity from Investors Heritage is the top income guaranteed income annuity in the marketplace today. There is an additional fee for this lifetime income guaranteed, single or joint covering both spouses.

With the GLWB added to the annuity, you can receive a guaranteed income stream – one that you cannot outlive – along with the ability to double your income for certain qualifying health conditions. This optional rider is available for those who are age 55 – 80 at the time of application.

Your income stream can start one year (or more) after your purchase date – provided that the youngest annuitant (i.e., income recipient) is at least age 56 or older. If you opt to defer the start of the income stream, you can continue to grow your account value, which in turn, can also increase your income benefit in the future.

The amount of your lifetime annual income is calculated using the following information:

  •  The amount of your benefit base at the time you start taking income from the annuity.
  •  The single or joint income withdrawal rate set at income election.
  •  Withdrawal rates are based on your age or the age of the youngest spouse, if taking joint income. (For joint income, both spouses must have reached age 56).

The Guaranteed Lifetime Withdrawal Benefit (GLWB) includes the Enhanced Benefit Rider. This can double your guaranteed income for up to five years if an annuitant is diagnosed with certain types of adverse health issues.

The GLWB also includes an Enhanced Income Benefit Rider, or EIB, at no added cost. This benefit will double your lifetime annual income for up to five years if you or your spouse (if you are taking the joint income option) become unable to perform two of six Activities of Daily Living (ADLs). These include bathing, toileting, continence, dressing, feeding, and transferring (such as from a chair to bed). This benefit is available after the second contract year of the annuity. It may be stopped and started again, as needed, for a total of five years of doubled income payments. The EIB guarantees that you will receive doubled income for the payment period – even if your annuity’s account value has fallen to $0. This benefit helps to provide peace of mind that you will have added income at a time when you may need it to cover additional healthcare related expenses. This is a big advantage offered through this annuity, as 99% of all other indexed annuities with enhanced income benefits will not double once the principal value goes to zero – which has a good chance of happening if the owner of the annuity lives a long life. It can even go beyond that because it can be used for one spouse now and the other later on (within the five-year time period).

There are some other enticing features that are also available on the Income Advantage fixed indexed annuity from Investors Heritage, such as a premium bonus of 2% that is added to your account value at the time of issue.

With the nursing home waiver, up to 50% of the account value is available penalty-free after the first contract year. If on a physician’s written recommendation, you are confined to a nursing home for 90 consecutive days or more (following the completion of the first contract year), you may withdraw up to 50% of the account value without any fees.

The death benefit on the contract is payable to one or more named beneficiaries. This benefit is paid out in one lump sum upon the death of the owner or the annuitant (i.e., the income recipient).

The amount of the death benefit is equal to the greater of the account value or the minimum guaranteed cash surrender value. As an alternative option, if the sole primary beneficiary is your legal spouse, then he or she may choose to continue the annuity contract as the new owner. (Note that with the Guaranteed Lifetime Withdrawal Benefit, the annuity continuation options can vary if death occurs before or after the income start date).

The Heritage Income Advantage annuity offers some liquidity. This is because you can access a percentage of your funds each year – even during the early stages of the contract (after the first contract year) – on a penalty-free basis. In this case, up to 10% per year may be accessed without incurring a surrender penalty.

To learn more about the Investors Heritage Income Advantage fixed indexed annuity, click here.

How an Insurance or Financial Advisor Might Present the Heritage Income Advantage Annuity

Because people are living so much longer today than ever before, having enough income in retirement has become a top concern for many retirees. With that in mind, the guaranteed income concept of the Heritage Income Advantage single-premium, deferred, fixed indexed annuity is most likely where an insurance or financial advisor would focus when presenting this product to clients or prospects.

Unless the advisor you are working with is a specialist in annuities, they may or may not be familiar with the in-depth features of the Heritage Income Advantage FIA. Therefore, in order to fully understand how the annuity works – and whether or not it is right for you – it can be helpful if you discuss this financial vehicle with someone who deals with annuities and retirement income plans on a regular basis.

What Fees and Charges are Incurred with the Heritage Income Advantage FIA?

Most financial and insurance products will charge some type of fee and/or impose various requirements (such as keeping a minimum balance in a savings or checking account). But, even though variable annuities are known for the myriad of fees that they charge, the same is not true of fixed and fixed indexed annuity products.

In the case of the Heritage Income Advantage fixed indexed annuity, there is a surrender charge period where, if you access more than 10% of the contract value in a given year, you will incur a withdrawal fee. Because of that, it is important that you ensure that the money you use to fund this annuity won’t be needed for an emergency or other financial commitment in the near future.

Investors Heritage Income Advantage Annuity Surrender Charge Schedule

Year12345678910
% Charge9.3%9.3%8.3%7.3%6.3%5.3%4.2%3.2%2.1%1.0%

Note that these charge percentages may not be the same in all states.

It is also important to be mindful that you could owe tax on the gains that are withdrawn. Plus, if you make such withdrawals prior to turning age 59 ½, there could be an additional 10% “early withdrawal” charge from the IRS.

There is also an additional premium amount required if you opt to add the Guaranteed Lifetime Withdrawal Benefit rider (which is issued by Investors Heritage Life Insurance Company).

The Annuity Gator’s End Take on the Investors Heritage Income Advantage Annuity

Where this annuity may work best:

While this annuity is not right for everyone, it can work well for those who are seeking:

  •  Guaranteed lifetime income
  •  Protection of principal and prior gains
  •  The opportunity for a higher rate of growth than a CD, bond, or regular fixed annuity

Where this annuity might not work well:

There are also some situations where this fixed indexed annuity may not be the right fit, such as those who:

  •  Do not plan to use the lifetime income feature
  •  Need access to more than 10% of their funds within the surrender charge period

In Summary

While there are many factors that need to be taken into consideration when you are buying an annuity, one of the biggest concerns is making sure that the annuity is truly right for what you want – and need – it to do.

With regard to the Heritage Income Advantage fixed index annuity from Investors Heritage Life Insurance Company, you can rest assured that you will have an income for life – whether that income is only for one individual or two. You may also access funds penalty-free in the event of certain healthcare situations.

But knowing whether or not this annuity is right for you should entail having all of your questions and concerns answered by an annuity specialist. That’s where Annuity Gator can help. We can test this annuity, as well as run side-by-side comparisons with other annuities – including one that you may already own – to determine how various ones could perform.

So, feel free to contact us by phone at 888-440-2468 or via email to our secure online contact form and we will help to provide you with the information you need to know.

Do You Have Any Additional Questions Regarding the Investors Heritage Income Advantage?

We realize that this annuity review of the Investors Heritage Income Advantage annuity may have run a bit long. But quite frankly, we would much rather that you have “too much” information on this product than to not have enough.

Therefore, if you found this annuity review to be beneficial, please feel free to pass it on and share it with other people who could also find value in it. (And, if you found it to be confusing, please also let us know that, too.)

In addition, we are aware that information regarding annuities can, and often does, change. So, if you happened to notice anything in this review that should be updated or revised, let us know and we will be happy to make the necessary edits.

Are there any other annuities that you would like to learn more about?

If so, just give us a shout and let us know, and our team will get to working on them right away – so be sure to check back soon and take a look in our Annuity Review Database on our website.

Best,

The Annuity Gator

 

 

 

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