What will you learn about in this annuity review?
In this review of the Western-Southern Life’s Smart Select 3-Year annuity, we will be going over the following information:
- Type of annuity
- How the annuity works
- Pros and cons
- Where it may work well
- Where it may not work
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
Purchasing an annuity can be a major financial decision. These financial vehicles – provided that they are purchased properly – can play a big part in helping you to ensure that you’ll have a guaranteed income for the remainder of your lifetime, regardless of how long you may need it. Unlike several decades ago, many people are living much longer these days. So, knowing that you have ongoing income in retirement can be a big relief.
However, even though annuities can certainly offer many benefits, there can also be some potential drawbacks to consider with regard to the products themselves, as well as the way in which they are sold by insurance and financial professionals.
On top of that, annuities are pretty confusing products, so unless you read the “fine print” very carefully and/or discuss your objectives with an annuity specialist, an annuity may not necessarily perform the way that you anticipated it to.
This is where the Annuity Gator can help!
Annuity and Retirement Income Planning Information that You Can Trust
If this is your first visit to our website, then please allow us to personally welcome you here to Annuity Gator. We are a team of experienced annuity professionals who focus on offering comprehensive and unbiased annuity reviews online.
We’ve been at this for quite some time now – and far longer than our competitors. Because of this, we have come to be known as a highly trusted source of annuity information. Over the past several years or so, though, many “copycat” websites have started to spring up, mimicking what we do. While that can be somewhat confusing for consumers, we take it as “imitation being the highest form of flattery.”
As you’ve spent time on the Internet researching annuity information, you may very well have come across some highly conflicting details about these products. But this really isn’t all that surprising.
There are lots and lots of different annuities out there today, and just about anyone and everyone has thoughts about whether they are good, bad, or otherwise. The reality is, though, none of that matters – as long as you know whether or not a particularly annuity is or isn’t right for YOU.
If you want to know more about the Western-Southern Life SmartSelect 3 year annuity, then you are definitely in the right place. In fact, dare we say that our website is the only place that you’ll be able to secure all of the details you need, which includes the good, the bad, and yes even the ugly. This, however, is the only way to make a good, solid decision about whether or not to purchase it.
In order to be perfectly clear here, we want to state for the record that we at Annuity Gator feel that annuities can be good products for some people – as long as they fit in with your overall financial needs and goals.
So, if you’re ready to start the review, let’s get started!
The Western-Southern Life SmartSelect 3-Year Annuity at a Glance
|Product Name||SmartSelect 3|
|Issuer||Western Southern Life Assurance Company|
|Type of Product||Single Premium Deferred Annuity (SPDA)|
|A.M. Best Rating||A+|
|Phone Number||(800) 926-1702|
Opening Thoughts on the SmartSelect 3-Annuity from Western-Southern Life
Western-Southern Life has a history that dates back to the year 1888. Today, W&S Financial Group Distributors distributes fixed, variable, and immediate annuities, as well as life insurance products and limited health insurance coverage.
The company brought in nearly $5 billion in total revenue for 2018, which is inclusive of $4.3 billion in life and health insurance premiums, as well as annuity sales – which brought in over $721 million in net income. This brings the company’s total assets owned and managed to over $75 billion.
Its financial strength and stability, as well as its positive claims-paying ability, has helped Western-Southern Life earn high ratings from the insurer rating companies, which includes a(n):
- A+ (Superior) from A.M. Best Company
- AA- (Very Strong) from Standard & Poor’s
- AA (Very Strong) from Fitch
- Aa3 (Excellent) from Moody’s Investor Service
The need for fixed/MYGA 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.
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 or MYGA (Multi-Year Guaranteed) 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.
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. Western-Southern 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. 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 W&S Financial Group Distributors Describes the SmartSelect Annuity
According to the Western-Southern Life website, the SmartSelect series of annuities are described as single premium deferred annuities, or SPDAs, that offer both flexibility and guarantees.
Providing initial guaranteed rate option, or GRO periods, you can select what works best for your particular circumstances. In addition to the 3-year option, there are also four, five, six, and seven-year GRO periods available on the SmartSelect annuity. During this time, you will have a minimum rate guarantee, as well as a death benefit and flexible withdrawal periods.
Prior to the close of the three-year GRO period on the SmartSelect 3 annuity, Western-Southern Life will contact you regarding your renewal options. These can include your choice of:
- Going with a new GRO period, and in turn, locking in a new interest rate
- Doing nothing, and having your account value automatically transferring to the one-year renewal period at the current interest rate (there is no surrender charge or market value adjustment if you go this route)
When the time is right, you can convert the contract into an income stream (i.e., annuitize). The options that are available for receiving your income include guaranteed payments for:
- 10 years (either for yourself, or a joint option for you and another individual, such as your spouse or partner)
- Lifetime, with a cash refund guarantee (either single or joint)
This annuity also includes some added features, such as a:
- Death benefit. If the annuity owner dies during the deferral period, Western-Southern Life guarantees that a named beneficiary will receive the account value on the day that the claim is processed
- Withdrawal charge waivers. Surrender, or withdrawal, charges may be waived in the event that you are confined to a nursing home, hospital, or licensed health care facility
You can check out all of the features of the Western-Southern SmartSelect annuity in the product brochure here.
How the SmartSelect 3 Annuity from Western-Southern Might Be “Pitched” by a Financial or Insurance Advisor
If you are approaching retirement, it is possible that you are torn between going with financial vehicles that have more risk in order to increase your opportunity for growth, or instead going with something “safer” so that you don’t lose any of your hard-earned principal in the event of a market “correction”.
With so many pre-retirees being concerned about not losing what they’ve already saved, having certain guarantees can be comforting – so if you have been presented the SmartSelect annuity by an insurance or financial advisor, it is likely that they zeroed in on the safety features of this product, along with the ability to earn a higher return if or when rates rise in the near future. So, in many ways, this annuity can allow you to potentially increase the returns on your “safe money.”
Or can it?
Just like with most other either/or scenarios, the benefits that you attain with an annuity will often require some type of “tradeoff” (like risk vs reward). In this particular case, once the three-year interest rate period has elapsed, if you wish to renew another lock-in period, you could be stuck with the then-current rate…which may be higher, but may also be lower than the previous rate.
Also, any time you are locked-in to a financial product for a set period of time, you also run the risk of lost opportunity to participate in other, better investments that may come along (at least with those particular dollars that are inaccessible).
Charges and Fees to Look Out For on the SmartSelect Annuity
Although there are no up-front commissions charged on the SmartSelect 3-Year Annuity from Western-Southern Life, you could incur a surrender fee if you withdraw more than 10% of the contract’s value within the first 3 years. (Note that the surrender period on this annuity corresponds with the interest rate lock-in period, so other rate lock periods could incur surrender charges for a longer period of time).
Plus, if you renew the annuity for another rate guarantee period, a new surrender charge period will begin that corresponds with that particular period of time.
Also, in addition to paying taxes on any of the gains that are withdrawn, if you access funds from the annuity before you have turned age 59 ½, you could also incur an additional 10% “early withdrawal” penalty from the IRS.
The Annuity Gator’s End Take on the Western-Southern SmartSelect 3 Annuity
Where this annuity works best:
While the SmartSelect 3 annuity may not be right for everyone, it could be a good option for those who are seeking the following:
- Guaranteed growth (at least for three years, and then again if desired for another guarantee period, once the initial period has elapsed)
- Protection of principal
- Lifetime income in retirement
Where it works the worst:
This annuity may not be right for you if:
- You want the opportunity to earn an even higher rate of return in order to keep better pace with future inflation
- You want to access more than just 10% of the contract’s value each year during the surrender period
- You do not plan to use the lifetime income feature
If you’ve been thinking about how to best position your savings for the future, there are a number of criteria that you should ideally be considered. As an example, with annuities, you need to make sure that the product allows you the opportunity to earn a nice return (at least enough to meet or beat inflation), while also keeping your money safe in any type of market environment. Similarly, if you are seeking a future retirement income stream, you also need to know how the annuity will pay out when you are ready to convert the funds into an ongoing income stream.
With all of that in mind, if you are still considering a purchase of the SmartSelect 3 annuity from Western-Southern Life, then you can rest assured that your money will be safe, no matter what goes on with the stock market, or even in the economy overall. You can also count on an ongoing income stream in the future, alleviating the concern about running out of money before you essentially “run out of time.”
On the other hand, however, even though this annuity can provide you with a nice array of features, the truth is that it might still fall somewhat short, and quite honestly, there could be a better alternative out there for you. This is particularly the case if you have been looking for a way to keep your principal safe, yet still have the opportunity to earn a higher amount of return.
In any case, the only way to really know how this MYGA annuity (or any other annuity, for that matter) 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.
Do You Have Any Additional Questions Regarding the Western-Southern SmartSelect 3-Year Annuity? Are There Any Other Annuities You Would Like Us to Review?
While we know that this annuity review was a tad bit on the longish side, we honestly feel that providing “too much” information to our readers is much better than not providing you with enough. That being said, we appreciate you sticking with us through to the end.
We also realize that, because all investors’ situations can be quite different, there may have been some questions that went unanswered in this review. If this is the case and you still have any additional questions or concerns regarding the SmartSelect 3 annuity, please feel free to reach out to us here via our secure online contact form.
In addition, if you found this annuity review to be helpful, please forward it to anyone else that you feel might also benefit from it, as there is a lot of misconception out there about annuities and how they work.
Is there any other annuity you would like to see us review?
If so, we will get our team of annuity “geeks” right on it!
The Annuity Gator
P.S. If you would like to read more of our Western-Southern Life annuity reviews here are some links to check out:
- Independent Review of Integrity Life AnnuiQuest Fixed Annuity with 1 Year Guarantee.
- Independent Review of the Western and Southern Income Source Immediate Annuity.
- Independent Review of the National Integrity Life New Momentum 1 Year Fixed Annuity.
- Independent Review of the Integrity Life MultiVantage Fixed Deferred Annuity.
- Independent Review of the National Integrity Life SPDA Series II, 1 Year Guarantee Fixed Annuity.
- Independent Review of the Western Southern Life MultiRate 1-year Fixed Annuity.