What’s Covered In This ReviewIn this review, we will be going over in detail the following items regarding the Reliance Standard Eleos MVA Single Premium Deferred Annuity (SPDA):
- Product type
- Charges and/or fees
- Current rates
- Realistic long-term expectations
- How the annuity is best used
- How the annuity 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 an annuity because you want to make sure that you won’t run out of income in the future – especially if you live a nice, long life – then purchasing the Reliance Standard Eleos MVY Single Premium Deferred Annuity could be a way for you to achieve that goal. One reason for this is because this particular type of annuity allows you to avoid the ups and downs of the market, while at the same time providing you with a guaranteed, fixed interest rate for a set period of time. Even if the stock market crashes, you won’t lose sleep wondering about losses, because this annuity keeps your principal safe. Also, when the time comes to convert the annuity over into an income stream, that income can last throughout the remainder of your lifetime, regardless of how long that may be. But, before you go out and purchasing this – or any – annuity, it is really important for you to first have an in-depth understanding of the benefits it can provide, as well as any of the possible drawbacks. This is because even a deferred fixed annuity can be quite difficult, and costly (due to surrender charges) to get out of once you are in. Over the past decade or so – and particularly since the 2008 recession – fixed annuities have become much more popular with people who are retired, as well as those who are approaching that time in their lives, as they can help to alleviate the concern about running out of money in retirement. Because of this heightened demand, many insurance carriers are introducing new products into the marketplace. However, while it’s nice to have a long list of available annuity options, unfortunately, this can make a product that is already somewhat confusing even more so. This can be the case for well-informed consumers, as well as many insurance and financial advisors! With that in mind, unless the insurance or financial advisor that you work with has a primary focus on selling annuity products, you really should do some additional research on these financial vehicles, as they will oftentimes require that you deposit a large chunk of your savings into them. That’s where the Annuity Gator can come in!
Annuity and Retirement Income Planning Information You Can TrustIf this is your first visit to our website, please allow us to officially welcome you to Annuity Gator. Who exactly are we? Annuity Gator is made up of a team of annuity and retirement income planning experts. Our primary focus is on helping consumers and financial advisors to better understand how these products work, and where annuities may or may not fit in the overall planning process. If you have been seeking more information about annuities online, you have undoubtedly run across some of our competitors’ websites. You know the ones – they try to “lure” you in by making claims like:
- Lowest annuity fees
- Highest annuity income payouts
- Guaranteed income for life
- Top rated insurance carriers
The Reliance Standard Eleos MVA Single Premium Deferred Annuity at a Glance
|Product Name||Eleos MVA SPDA|
|Type of Product||Single Premium Deferred Annuity|
|A.M. Best Rating||A+ (Superior)|
|Phone Number||(800) 351-7500 ext. 3696|
Opening Thoughts on the Reliance Standard Eleos MVA Single Premium Deferred AnnuityReliance Standard Life Insurance Company (aka, Reliance Standard) is a leading insurance carrier that specializes in innovative and flexible employee benefit solutions – including group term life insurance, disability income, and annuities. It is a member of the Tokio Marine Group, which operates in the property and casualty insurance arena, as well as in life insurance and reinsurance around the globe. This group’s main operating subsidiary, Tokio Marine and Nichido Fire was originally founded in the year 1879. Reliance Standard’s products are available in all 50 U.S. states. It has an A.M. Best Rating of A+, so it is considered strong and stable from a financial standpoint and has a good reputation for paying out its policyholders’ claims. Because so many people are living longer these days, it is essential to ensure that you have income during your early stages of retirement, as well as many years down the road. In fact, it’s not uncommon for people to live for 20, 30 or more years past their retirement date. Unfortunately, though, due to the historically low-interest-rate environment that we’ve been stuck in for nearly a decade now, the return that has been offered by fixed annuities has been very low. In fact, in many instances, the returns that are obtained on fixed annuities have not even been enough to outpace the inflation rate over time. Because of these low rates, your future purchasing power could be affected – especially if you plan to use the income from a fixed annuity as a primary source of your retirement income down the road.
Before we get into the in-depth details, we have some legal disclosures to present…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Reliance Standard 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 more details 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 Reliance Standard Describes the Eleos MVA AnnuityAccording to the Reliance Standard website, the Eleos MVA Single Premium Deferred Annuity is described as a fixed annuity that offers a set rate over time (which can be altered by the insurance company but is guaranteed to not dip below a certain percentage). You may also qualify for a first-year interest bonus. As its name implies, this annuity allows for just one single premium. This could come from personal savings or from a qualified plan like an IRA or 401(k) plan balance. Over time, the money in the account is allowed to grow and compound on a tax-deferred basis. No taxation on the gain (at least until the time of withdrawal) means that your money can grow much faster than funds in a taxable account. Due to its market value adjustment (MVA) feature, the interest rate could be adjusted if you withdraw more than the penalty-free amount (10% of the contract’s value) during the surrender charge period. Depending on the interest rate environment, your rate could be adjusted either up or down. With this annuity, you can ensure that your principal is safe and that the annuity won’t lose value, even in the event of a significant stock market “correction.” There are also a few added bells and whistles on the Ethos MVA annuity from Reliance Standard, including a(n):
- Hospital, nursing home, and custodial care confinement waiver. This will allow you to take penalty-free withdrawals of up to 25% from the annuity – even during its surrender period – if you qualify based on your health and/or need to reside in a nursing home facility.
- Death benefit. At the annuitant’s death, the full remaining account value may be paid out to a named beneficiary. In this case, you or a loved one can be assured that the full amount of paid-in premium is returned.
How an Insurance or Financial Advisor Might “Pitch” this Annuity to YouAs you approach retirement, protection of your hard-earned principal will typically become more and more important to you – as well the assurance that you will have enough income in the future, regardless of how long you may need it. Given that, it is likely that if you are being presented the Single Premium Deferred Annuity from the Reliance Standard by an insurance or financial advisor, he or she will key in on these guarantees. However, while having these assurances can help you to sleep a bit better at night, the reality is that the interest rates today (and for the past decade or so) that are offered on fixed annuity products would have you hard-pressed to meet, much less beat, inflation. This, in turn, could put you in a bind in the future when it comes to ensuring that your income is keeping up with the rising cost of goods and services that you need to purchase. Plus, given the Eleos annuity’s market value adjustment feature, you could even end up with a lower rate of interest in the future. In addition to that, should you need to withdraw more than 10% of the annuity’s account value within the first several years (actually, within your interest rate guarantee period), you could also incur a substantial withdrawal charge for doing so.
What Fees are on the Reliance Standard Eleos MVA Single Premium Deferred Annuity?Although an up-front sales commission to the selling agent is built into the contract, that doesn’t mean that you won’t ever incur any fees on the Eleos MVA SPDA annuity from Reliance Standard. For instance, if you withdraw more than 10% of the contract value over the first six years, in addition to the market value adjustment, you will also incur a surrender penalty. Plus, if you make such withdrawals prior to turning age 59 ½, you could also be responsible for paying an additional 10% “early withdrawal” penalty to Uncle Sam.
Reliance Standard Eleos MVA Annuity Surrender Charges
|Year 1||Year 2||Year 3||Year 4||Year 5||Year 6+|
The Annuity Gator’s End Take on the Reliance Standard Eleos MVA Single Premium Deferred AnnuityWhere it works best: This particular annuity will usually work the best for those who are looking for:
- Guaranteed lifetime income
- Safety of principal
- Tax-deferred growth
- Interest rate guarantee – at least for a certain period of time
- Want access to most or all of your funds within the first several years (during the surrender charge period)
- Are seeking a high rate of return on your money
- Do not anticipate using the annuity for lifetime income
In SummaryThere are many different factors that should be considered prior to moving forward with the purchase of an annuity. In the case of the Eleos MVA Single Premium Deferred Annuity from Reliance Standard, these include how long you want your rate guaranteed, as well as any fees that could be charged (such as for a withdrawal), and how you will take your future income. If you are still considering the purchase of this annuity, you can be assured that your principal will be safe and that you will be able to count on a guaranteed income stream in the future. However, even so, this annuity could still fall somewhat short, and quite frankly, there could very well be a better option out there for you. The only way to truly know whether the Eleos MVA SPDA annuity will perform well for you is to have it tested. We can do this for you, and we can provide you with the results – at no charge or obligation. If you are interested in taking a look at the potential performance of this annuity, based on your specific criteria, then please contact us here through our secure online form.
Do You Have Any Additional Questions Regarding the Eleos MVA Single Premium Deferred Annuity from Reliance Standard? Did You Happen to Notice Any Mistakes?While we understand that this annuity review went a bit on the long side, our feeling is that we would much rather provide you with “too much” detail than not enough. That’s because knowing all that there is to know is really the only way to make a well-informed purchasing decision. So, if you did find this annuity review to be beneficial, then please feel free to forward it on and share it with anyone else who you feel would also find it advantageous. Conversely, if this review caused you to be more confused about this (or any) annuity, please let us know that, as well. Any other annuities you’d like to have us review? No problem! There are many different annuities available in the market today – so if there is one (or more) that you did not find in our annuity review database, and you want to know more about it, then just simply let us know and our team of annuity “geeks” will get right on it. Best, The Annuity Gator P.S. If you would like to read more of our Reliance Standard annuity reviews here are some links to check out:
- Independent Review of the Reliance Standard Life Apollo MVA Annuity
- Independent Review of the Reliance Standard Keystone Index Annuity