What will we be talking about in this annuity review?
In this review of the Protective Life Insurance Company’s Smart Saver 4 annuity, we will be going over the following details:
- Annuity type
- How it works
- Pros and cons
- Charges and fees
- Where it may work well
- Where it may not work very well
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you have been thinking about purchasing a fixed annuity because you want to know that your principal will be safe and that you will also obtain a guaranteed lifetime income in retirement, then the Protective Life Insurance Company’s Smart Saver 4-Year annuity may be a viable option for you.
One reason for this is because this annuity can provide you with a rate guarantee for four full years. It can also provide you with a lifetime income stream in the future, so you can alleviate the worry about running out of income before “running out of time.”
However, even as enticing as these benefits might sound, you really shouldn’t go out and purchase this – or any – annuity sight unseen, unless or until you have an in-depth understanding of just exactly how the product works, and how it may or may not work for you.
Throughout the past decade or so, due in large part to the constant ups and downs of the stock market, fixed annuities have become quite popular. This is especially the case for those who are retired, or who are in the process of preparing for that time in their lives. With their income guarantees, as well as the fact that your principal is kept safe, fixed annuities may seem to be the best of all worlds for investors.
But, just like with any other type of annuity, you need to proceed with caution. For example, the Protective Smart Saver MYGA (multi-year guarantee), is an annuity that has a few “moving parts” – and along with these can come a plethora of small print that you really need to know about before committing a large chunk of money to this product.
Annuity and Retirement Income Planning Information You Can Trust
If you’ve never been to our website before, please allow us to personally welcome you to AnnuityGator.com. We make up a team of highly experienced annuity experts who have a focus on providing comprehensive (and unbiased) annuity reviews.
We have been doing this for quite a while now – longer than our competitors have – and because of that, we have become known as a highly trusted source of annuity information. However, over the past decade or so, many “copycat” websites have also sprung up all over the Internet.
If you’ve been spending any time at all looking for annuity information online, it is highly probable that you’ve also come across some conflicting details regarding these financial vehicles. This isn’t really surprising, though, because there are a multitude of annuities out there in the marketplace, and everyone seems to have a different opinion about them.
It is also possible that you’ve recently attended an annuity seminar where, in return for a free lunch or dinner, the presenter provided you with a plethora of information about the Protective Life Smart Saver 4 Year MYGA fixed annuity, or some other similar annuity product. Your attending this seminar may even have been the catalyst that has ultimately led you here to our site in search of more information.
In your quest for more in-depth annuity information, though, you may also have come across some of the 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
Does this look familiar?
Unfortunately, as nice as these claims may sound, it is absolutely essential that you first verify their validity before you move forward with a long-term financial commitment, just like you would likely do before purchasing any other type of “high ticket” item.
But, if you’re seeking more details on the Protective Life Smart Saver 4 annuity, then you are certainly in the right spot. In fact, we dare say that our website is the only place online where you can truly be able to obtain all of the in-depth information that you’ll need for making a well-informed buying decision (or alternatively, making the decision to forgo this particular annuity and move on to something else).
As you read through this annuity review, you will find that we don’t just lay out the nice, rosy advantages of the product, but we also give you details about what could be considered some serious drawbacks, too. We don’t do this to scare you, but rather to give you the whole picture, as we firmly believe that knowing everything is the only way to make a truly informed financial related decision.
With that in mind, we also want to be clear in that we fully believe that an annuity can be a great financial vehicle for some people – provided that it fits in well with your short- and long-term financial goals.
So, with that being said, if you’re ready to proceed, then let’s go ahead and get started!
The Protective Life Smart Saver 4-Year Annuity at a Glance
|Product Name||SmartSaver 4-Year Annuity|
|Issuer||Protective Life Insurance Company|
|Type of Product||Fixed / MYGA (multi-year guarantee) Annuity|
|A.M. Best Rating||A+|
|Phone Number||(800) 456-6330|
Opening Thoughts on the Protective Life Smart Saver 4 Annuity
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.
At year-end 2019, Protective Life had in excess of $900 billion of insurance in force, consisting of roughly 8.6 million policies. With more than $66 billion of invested assets, Protective is considered to be strong and stable financially, and in a good position to make good on its policyholders’ claims.
The company is highly rated by the insurer rating agencies, including a(n):
- A+ from A.M. Best
- A+ from Fitch
- AA- from Standard & Poor’s
- A1 from Moody’s
The need for fixed annuities – which are always backed by life insurance carriers – has been growing fairly steadily throughout the past few years, particularly as more of today’s workers are retiring without having the stability of a traditional “defined benefit” pension for future retirement income. But, by choosing the lifetime income stream on an annuity, you can essentially “replace” a defined benefit pension plan.
MYGA (multi-year guaranteed) annuities can also give you the peace of mind in knowing that your initial interest rate won’t change – at least until the rate guarantee period has elapsed (in this case, four full years).
If you have a “defined contribution” retirement plan, such as a 401(K), then upon retirement, you will need to have an idea of what you want to do with the money you’ve saved in it – as well as a way to convert those dollars over into a stable and reliable income stream (ideally that will last for the remainder of your life – regardless of how long that may be).
One possibility would be a fixed/MYGA annuity. This is because these financial vehicles can provide you with a set return and safety of your principal (regardless of what happens in the stock market), as well as with a lifetime income that you can count on.
But wait, there’s more!
Just like most other areas in life, when there is something good, there may also be something not-so-good in terms of a tradeoff that you need to make. This is definitely the case with Protective’s Smart Saver 4-year MYGA annuity.
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. 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 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. 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, and how to determine which one – if any – may be the best for you, click here to obtain our free annuity report.
How Protective Life Describes the Smart Saver 4-Year MYGA Annuity
The Protective Smart Saver 4 annuity is described as a limited flexible premium deferred fixed annuity. This annuity offers an initial rate guarantee of four years that begins on the issue date of the annuity contract. (The rate lock period also corresponds to the annuity’s surrender charge period – which we will get to in just a minute).
Once the initial interest rate guarantee ends, the contract value is then immediately applied to a one-year renewal guarantee period. Interest is credited daily. As with other deferred annuities, the growth that builds up inside of the contract does so without you having to pay taxes – at least until the time of withdrawal.
Also similar to other annuities, you are allowed to withdraw up to 10% of the contract’s value each year without incurring a penalty – even during the surrender charge period. But there are some ways that you could qualify to obtain penalty-free withdrawals of more than just 10%, even during the surrender period.
For instance, if you or your spouse enters a nursing home, or one of you is diagnosed with a terminal illness that is expected to result in death within 12 months, you can access these funds without a surrender charge. Likewise, if you and/or your spouse becomes unemployed and you meet the qualifying criteria, you may also be able to access your funds from the Protective Smart Saver 4 annuity.
Plus, this contract also pays a death benefit to a named beneficiary if the owner of the annuity dies before the annuity’s account value is converted over to an income stream (i.e., before it is annuitized). It is important to note, though, that unlike a life insurance death benefit, these funds could be taxable to the recipient.
Also, if it is not taken immediately as a lump sum, the death benefit funds will continue to earn interest according to the annuity contract, and it must be fully distributed either within five years of the owner’s death, or over the life (or the life expectancy) of the beneficiary, with payments that start within one year of the annuity owner’s death.
For more of the “fine print” regarding the Protective Smart Saver annuity, you can check out the annuity disclosure statement here.
How an Insurance or Financial Advisor Might Present the Smart Saver Annuity from Protective
Today, because the market downturn of 2008 and the “correction” that occurred as a result of the Coronavirus in 2020 are still somewhat fresh in peoples’ minds, keeping principal safe is a big concern.
When it comes to fixed annuities like the Smart Saver 4 from Protective, then, an insurance or financial advisor is likely to key in on the safety that you can get – and with this annuity in particular, the proverbial icing on the cake is the fact that not only can you lock in a certain guaranteed rate for four full years, but you can also receive a reliable, ongoing retirement income stream no matter what occurs in the market in the future.
When you’re talking about lots of guarantees, though, it is important to keep in mind that somewhere along the line, there will be some tradeoffs to make. And when focusing on the Protective Smart Saver fixed MYGA annuity in particular, the reality is that you still may not be able to beat, or even meet, the rate of inflation. Because of this, you would still need other options for increasing your savings and/or your future income if you want to keep your retirement income rising enough to meet future living expenses.
Also, you may have the opportunity to access your money free of surrender charges if you are diagnosed with a qualifying terminal illness, or if you become confined to a nursing home. But then what happens if you or your spouse still needs income in the future, but the money in the annuity contract has run dry?
Protective Life Smart Saver MYGA Annuity Fees
While there isn’t an up-front fee that is taken out of your annuity deposit, that doesn’t mean that you won’t incur at least some type of charges or fees with the Protective Life Insurance Company’s Smart Saver 4-Year MYGA annuity.
In fact, in addition to the 4-year option, the Smart Saver actually comes with several other interest rate guarantee periods, and these all correspond to the length of the surrender charge period – and the longer the rate guarantee period, the longer the surrender period, too!
Protective Life Smart Saver Annuity Surrender Charge Periods
|Full Contract Years||0||1||2||3||4||5||6||7+|
The funds that you receive could also be subject to income tax. Plus, if you make such a withdrawal before you have turned age 59 ½, you could also incur an additional 10% “early withdrawal” penalty from the IRS.
With that in mind, it is really important that you only fund the Smart Saver MYGA annuity from Protective Life Insurance Company with money that you won’t need later on for an emergency or other financial obligation.
The Annuity Gator’s End Take on the Protective Life Smart Saver 4 Year MYGA Fixed Annuity
Where it works the best:
The Protective Life Smart Saver 4-Year MYGA Fixed Annuity may be right for you if:
- The interest rate for money you have in a bank savings or CD does not compare favorably to the interest rate potential that this annuity can offer
- You can put money into the annuity for a committed amount of time with the option to withdraw up to 10% per year free of surrender charge (if needed)
- You would like to accumulate more interest because you have a tax-deferred product rather than paying taxes on the interest in the same year in which it is credited
- You want the peace of mind in knowing that you can access your money free of surrender charges if you become terminally ill or confined to a nursing home facility
Where it works the worst:
This particular annuity may not be right for you if:
- You want the opportunity to earn an even higher rate of return in order to keep a better pace with future inflation
- You want to access more than just 10% of the contract’s value each year
- You do not plan to use the lifetime income feature.
There are a number of important concerns to keep in mind when you are saving for retirement. For instance, you want to be sure that your funds are earning a nice return, but that they are also safe from potential market downturns. It is also essential to know that you will have a reliable stream of income in retirement – regardless of how long you may need it.
If you are considering the purchase of the Smart Saver annuity from Protective Life, then you can be assured that your principal will be safe, and that you will have an income stream in retirement that will continue for the remainder of your life.
However, even with these great attributes, this annuity could still fall somewhat short – and quite frankly, there may just be a better alternative out there for you, especially if you are seeking the opportunity for an even better return.
In any case, the only want to truly know how this annuity may perform based on your specific situation is to have it tested. We can do this for you by running the numbers through our annuity calculator, and we can then provide you with a spreadsheet of the results. In order to receive this information, just simply contact us through our secure online form here and let us know.
Have Any Additional Questions? Notice Any Mistakes in this Review?
We realize that this annuity review was a tad bit lengthy. However, our feeling is that we would much rather “err” on the side of offering “too much” information than not enough. So, we do appreciate you sticking with us thus far.
If you found that this annuity review was helpful, then please feel free to forward it on to anyone else who you think might also benefit from it. Also, we realize that not everyone’s financial situation is the same. So, you may still have some questions about the Smart Saver annuity – and if so, please reach out to us here and we will be happy to assist you further.
Are there any other annuities that you would like to have reviewed?
No problem! There are many annuities available in the market today. So, if you don’t see an annuity in our database that you would like to know more about, then just simply let us know the name of that annuity (or annuities, if there is more than one), and our team of annuity “geeks” will get to work on it!
The Annuity Gator
P.S. If you would like to read more of our Protective Life annuity reviews here are some links to check out:
- Independent Review of the Protective Life Fixed Deferred Annuity.
- Independent Review of the Protective Life’s Indexed Annuity II.
- Independent Review of the Protective ProSaver Secure ll Fixed Annuity.
- Independent Review of the Protective Life Income Creator Annuity.