What will you learn about in this annuity review?In this annuity review, we will be going over the following information about the Puritan Market Index Single Premium Fixed Index Annuity:
- 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’re in the process of mapping out your retirement income plan, the Puritan Market Index Single Premium Fixed Index annuity could be a good option for you. That’s because this annuity provides the opportunity for market-linked growth, while at the same time keeps your principal safe in any type of market. This annuity can also provide you with a lifetime stream of income during retirement – regardless of how long you live. But it is also important to be cautious before you hand your money over to any insurance or financial company before you know how a product works. Over the past few years, the fixed indexed annuity, in particular, has become extremely popular. This is because a fixed indexed annuity, or FIA for short, can essentially offer the best of both worlds…or at least it can appear that way. However, due in large part to the increased number of new-fangled products that are being pushed out into the marketplace by insurance companies – each trying to outdo the other – these particular annuities can also be extremely confusing. So, it makes it even more essential that you read over all of the fine print before you commit what could be a large percentage of your savings to this annuity.
Annuity and Retirement Income Planning Information You Can TrustIf this is your first time visiting our website, we would like to welcome you to Annuity Gator. We are a team of annuity and retirement income specialists who have a focus on offering comprehensive – yet non-biased – annuity reviews online. We have been doing this for quite some time now, and because of that, many people have come to trust our annuity reviews because they don’t just focus on the “good” points about annuities, but also provide you with items to consider that could make a particular annuity a poor fit for your specific needs. When researching annuities online, it is possible that you have come across some highly conflicting information about these products. This, however, isn’t really all that uncommon, as there are many different annuities, and there many different thoughts about them. There are also a number of websites out there that provide some information about annuities and how they work but are much more interested in obtaining your contact information so that they can barrage your inbox with a multitude of emails about their products. In fact, oftentimes, these websites will attempt to “lure” you in by making some outrageous claims about the annuities that they offer, such as:
- High Income Payouts
- Guaranteed Income for Life
- Top-Rated Insurance Carriers
- Low Annuity Fees
- Does any of this look familiar?
The Puritan Market Index Single Premium Fixed Index Annuity at a Glance
|Market Index Annuity
|Puritan Life Insurance Company of America
|Type of Product
|Single Premium Fixed Index Annuity
|A.M. Best Rating
Opening Thoughts on the Puritan Market Index Single Premium Fixed Index AnnuityPuritan Life Insurance Company of America is a leading provider of financial solutions for clients who are beginning their peak earning years and continuing through retirement. This insurer was established in 1958. The company offers whole and final expense life insurance, as well as fixed (single premium and MYGA) annuities and Medicare Supplement Insurance. Based in Tempe, Arizona, Puritan Life operates in 34 states throughout the country. Over the past several years, in large part due to the highly volatile stock market, more people have been taking a closer look at fixed indexed annuities. This is because, in addition to keeping principal safe (in any market condition), these financial vehicles can also provide you with the opportunity for ample growth, as well as a set amount of income that could last you for the remainder of your lifetime. Yet, even though this might sound like a win-win-win situation, the reality is that if something sounds like it may be too good to be true, then it typically is – so you should ideally get as much in-depth detail as possible if you are considering committing to it for the long term.
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. Puritan 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 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 Puritan Life Describes the Market Index Single Premium Fixed Index AnnuityPuritan Life describes its Market Index annuity as a single premium fixed index-linked financial vehicle that can help you to grow your retirement assets in a way that is secure, and that takes advantage of tax-deferred growth. Without being taxed on the gains each year, your funds inside of this annuity can grow and compound exponentially over time. With the Market Index annuity from Puritan Life, you make just one single lump-sum premium payment. This can come from personal (non-qualified) funds, or you can use qualified dollars that are rolled over from an IRA or employer-sponsored retirement plan. This annuity tracks the S&P 500 index. When the underlying index performs well, a positive return will be credited to your account – up to a certain maximum, or “cap.” However, when the underlying index performs poorly in a given time period, no loss is credited. Rather, your account will simply receive a 0% for that time period. This protection of principal can be enticing – particularly for those who do not want to face any losses in or near retirement. (The Market Index annuity also offers a fixed interest account, which earns a guaranteed rate of interest). There are actually three different interest crediting options on the Market Index annuity. In addition to the fixed interest account and the index-linked account with a cap, there is also an index-linked account with a participation rate. This option will credit your account with interest, based on how well the S&P index performs, up to a certain percentage. In this case, if the participation rate is 80% and the underlying index returns 10% for a given period of time, your account will be credited with 8%. (80% of 10% is 8%). There are a couple of other “bells and whistles” on this annuity. These include a death benefit that will be paid to a named beneficiary if you pass away and still have any accumulation value in the annuity. Passing these funds on to a beneficiary can help to bypass the expensive and time-consuming process of probate. You can also access 100% of the funds in the annuity penalty-free if you need to reside in a nursing home for a certain period of time. There will be no penalty in this case, even if you are still within your surrender period. For more of the in-depth details on the Puritan Life Market Index annuity, you can check out the information HERE. For those who are seeking a guaranteed income for life, there is an optional Guaranteed Lifetime Withdrawal Benefit Rider that may be added to the Market Index annuity. With this rider, you will be able to count on a steady and predictable stream of income for as long as you live – regardless of how long that may be. This rider may go through three distinct phases, including the:
- Accumulation Phase – This phase is the initial rider date through the date that you elect to start receiving your guaranteed income payments.
- Income Phase – This phase goes from your first payment until the accumulation value of the annuity reaches zero.
- Lifetime Benefit Payout Phase – This phase starts on the day that the accumulation value reaches zero, and it goes through the end of your life.
How an Advisor Might “Pitch” this AnnuityIf you’ve talked with an insurance or financial advisor about the Puritan Life Market Index annuity, it is possible that he or she keyed in the opportunity for growth coupled with safety from market downturns. Today, people are living much longer than ever before – and, while that can be positive in many respects, it can also bring about the worry of outliving your income in retirement. With many people who are preparing for retirement being concerned about growing their savings, while at the same time keeping their principal safe, it is possible that an insurance or financial advisor would present this annuity as a vehicle for accomplishing both of those goals. Plus, there is also the option to choose income for life with this annuity. What the agent may or may not heavily focus on, however, is the “fine print” – which can more clearly explain some of the “tradeoffs” that you’ll need to make in order to garner some of the benefits. For instance, the index-linked growth is “capped” at a set percentage. So, even if the underlying market index you’re tracking has a stellar performance, your return will really only reflect a portion of it. As an example, if the cap is 5%, but the index returns 10% for a given year, you will only get 5%. In addition, while the insurance company promotes “liquidity” with this annuity, the truth is that you can only withdraw up to 10% of the contract’s value during the surrender penalty – otherwise, you’ll be charged a fee.
What Fees are Charged with the Puritan Life Market Index Annuity?
Although there are no up-front agent sales commissions taken from your account when you purchase the Puritan Life Market Index annuity, you can be hit with a fee if you take early withdrawals that exceed 10% of the account value…and, even though the fee is reduced over time, these surrender charges are in place for ten full years! [desktoponly]
Puritan Life Market Index Annuity Surrender Charge Schedule
|Surrender Charge Percentage
The Annuity Gator’s End Take on the Puritan Life Market 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
- Lifetime income
- Want or need to access their funds penalty-free within the first eleven years
- Do not intend to use the guaranteed lifetime income feature