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Horace Mann Annuity Review: Capital Bonus 2 Fixed Annuity

What will be covered in this Horace Mann annuity review of the Capital Bonus 2 Fixed Annuity?

In this Horace Mann annuity review, we will be going over the following details regarding the Capital Bonus 2 Fixed Annuity from Horace Mann Life:

  • How the annuity works
  • Horace Mann Life Expanding Horizon Annuity 5Realistic performance expectations
  • Charges and fees
  • Where the annuity may work best
  • Where the annuity may not be a good fit

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 a fixed annuity, such as the Horace Mann Capital Bonus 2, it could be a good fit for you if you’re seeking protection of principal, a guaranteed minimum return, and lifetime income in retirement.

However, before you make a long-term commitment to this (or to any) annuity, it is really important that you have a good understanding of how the annuity works, and how it may – or may not – fit in with your short- and long-term financial goals.

Ever since the recession of 2008 – and again more recently with the Coronavirus pandemic (and corresponding stock market crash) – more retirees and pre-retirees have been purchasing fixed annuities as a way of keeping their assets safe, and making sure that they have a reliable income no matter how long they may need it.

Now, that’s all fine and good. But there are some “tradeoffs” you may need to make in return for these guarantees. One being the painfully low-interest rate you are likely to get. Another being the surrender charge you can incur if you decide to withdraw your money early from the annuity.

This is where having the Annuity Gator on your side can help.

Today, even the most basic of annuities can still have a lot of moving parts. So, they can be confusing for both consumers and financial advisors in terms of what you are actually getting, and what you need to give up in order to get it!

Annuity and Retirement Income Planning Information You Can Count On

If this is the first time you have visited our website, then please allow us to officially welcome you here to Annuity Gator. We make up a team of financial and annuity specialists who provide education and non-biased comparisons of annuities.

We’ve been doing this for quite some time now – far longer than our competitors – and so we have become a highly trusted source of annuity information online. We can help you to determine which annuity, if any, is right for you.

If you’ve been researching annuities on the Internet, it is likely that you have come across some very conflicting information on these products – anything from, “Annuities are a must for all investors,” to “I hate annuities.”

So, what is the best answer in terms of whether or not you should purchase an annuity?

Honestly, it depends on a number of factors, such as your future income needs, risk tolerance, and time frame until retirement.

Because of that, no one can truly predict whether or not a particular annuity should be purchased until they fully know the answer to these questions.

That being said, while there many good annuity-related websites out there on the Internet, the truth is that some of these simply want to lure you in by making claims like:

  • Highest income payouts
  • Lowest fees
  • Guaranteed lifetime income

Look familiar?

Even though these promises can certainly be enticing – particularly in light of the extremely volatile stock market of late – it is absolutely essential that you check them out first to determine whether or not they are true, or just a lot of fluff.

That doesn’t necessarily mean that annuities are bad. In fact, for many investors and retirees, annuities are an ideal addition to their portfolio…but only if the annuity fits in with their specific needs and goals.

This Horace Mann annuity review of the Capital Bonus 2 is here to help you with decoding all of the “fine print” that is associated with the product so that you will better understand whether or not it is actually a good fit for you.

That being said, if you’re ready to move forward with this review, let’s dive in!

Horace Mann Capital Bonus 2 Fixed Annuity at a Glance

Product NameCapital Bonus 2
IssuerHorace Mann Life Insurance Company
Type of ProductFixed Annuity
A.M. Best RatingA
Phone Number(800) 999-1030
Websitehttps://horacemann.com

Opening Thoughts on our Horace Mann Annuity Review of the Capital Bonus 2

Since 1945, Horace Mann has been serving the needs of educators through its insurance and retirement products. The company offers a wide range of coverage, including auto and home insurance, life and disability insurance, and “income insurance” (aka, annuities).

Horace Mann Life Insurance Company has a reputation for being financially stable, and for paying out its policyholder claims. Because of that, the company has earned high ratings from the insurer rating agencies, including a(n):

  • A from A.M. Best Company
  • A from Standard & Poor’s
  • A2 from Moody’s Investor Service
  • A from Fitch Ratings

The demand for fixed (and fixed indexed) annuities – which are always backed by insurance companies – has been steadily increasing ever since stock market volatility has become the norm, rather than the exception over the past several years.

In fact, the biggest fear on the minds of many retirees these days is running out of money. Fewer people are retiring with employer-sponsored pension plans, so they have to “create” one for themselves. This is what a fixed annuity can do.

On the other hand, due to the historically low-interest rate environment of late, the return that is offered by most fixed annuities is so low that it typically can’t even meet, much less beat, inflation.

Also, annuities are considered to be longer-term financial options. So, if you purchase one, and then you change your mind down the road and you want to cancel it, you will usually incur a surrender charge. This is why it is essential to understand just exactly what it is that you are getting before you make a commitment.

Before we get into the gritty details, here are some necessary legal disclosures…

This is an independent Horace Mann annuity review. It is not a recommendation to purchase or to sell an annuity. Horace Mann 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 Horace Mann Describes the Capital Bonus 2 Fixed Annuity

The Capital Bonus 2 Fixed Annuity is described by Horace Mann as a fixed product that offers non-guaranteed interest bonuses in the first two contract years.

The minimum rate of return on the Horace Mann Capital Bonus 2 annuity is 1%. The contract also offers a 2% interest bonus in the first contract year and a 1% interest bonus in the second. These bonuses are paid in addition to the guaranteed 1% interest rate that is currently being offered at issue.

Bonus Credit Table

Contract YearBonus Rate (non-guaranteed)
12%
21%

How an Insurance of Financial Advisor Might “Pitch” This Horace Mann Annuity Product to You

As an educated consumer, you may have already noticed that insurance companies do a very good job of making their products sound enticing. For instance, a guaranteed minimum rate of return, plus a lifetime income stream, might appear to be ideal. But, as radio announcer Paul Harvey used to say, you need to know “the rest of the story.”

When dealing with fixed annuities, for example, some of the key concepts you’ll hear an insurance or financial advisor say typically include:

  • Guaranteed return of premium
  • Guaranteed interest rate(s)
  • Lifetime income

But, when you delve a little deeper, you will notice that the interest rate is oftentimes on par with what you could get with a money market or bank savings account – products that won’t lock up your money for several years or charge you a surrender fee to access it. With that in mind, you really need to consider both the pros and the drawbacks of fixed annuities before purchasing one.

What About Fees on the Horace Mann Capital Bonus 2 Annuity?

While there is no up-front commission charged when purchasing the Capital Bonus 2 annuity from Horace Mann, you could still incur a loss of principal if you decide to surrender, or cancel, the annuity before a certain time period has elapsed.

In this case, the surrender charge on the Capital Bonus 2 annuity from Horace Mann runs for ten full years, starting at 8% in Years 1 and 2.

Horace Mann Capital Bonus 2 Annuity Surrender Fee Schedule

Surrender PeriodSurrender Percent
18%
28%
37%
46%
55%
64%
73%
82%
91%
100%

In addition to paying a surrender charge, you may also incur tax on any of the gains that you withdraw. And, if you make such a withdrawal before you have turned age 59 ½, you could also be responsible for paying an “early withdrawal” penalty of 10% from the IRS.

The Annuity Gator’s End Take on the Horace Mann Annuity Review of Capital Bonus 2

Who might be a good fit for this annuity?

This particular annuity could work best for those who are seeking the following features:

  • Guaranteed retirement income stream
  • Safety of principal in any type of market
  • A guaranteed rate of return

Who might want to consider alternate options?

The Horace Mann Capital Bonus 2 annuity might not be a good fit for those who:

  • Need or want access to their principal penalty-free for the first ten years after purchasing the annuity
  • Want a higher rate of return on their money
  • Do not plan on using the guaranteed lifetime income feature

In Summary

There are a lot of important factors that should be considered when you are trying to determine which annuity is right for you – or even if any annuity will fit into your overall financial picture.

In any case, though, annuities should always be considered as long-term financial endeavors, and because of that, you should feel comfortable that an annuity you ultimately go with can help you to reach your goals.

If you are still leaning towards the purchase of a traditional fixed annuity, you can certainly be assured that your principal will be safe and that you will earn a steady, tax-advantaged gain in the account.

However, even with these nice benefits, this annuity could still fall somewhat short – and quite frankly, there very well could be a better option out there for you – particularly if you are focused on getting a guaranteed lifetime income in retirement AND the opportunity to earn a higher rate of return.

If you still have any questions with regard to whether or not the Horace Mann Capital Bonus 2 annuity is right for you – or, even if you just simply need some additional guidance about annuities in general – then please feel free to reach out to us directly via our secure contact form here.

Any Additional Questions on our Horace Mann Annuity Review of the Capital Bonus 2? Did You Notice Any Mistakes?

Although this review of the Horace Mann Capital Bonus 2 Annuity was a bit lengthy, we would much rather provide you with too many details as versus not nearly enough. Therefore, if you did find this review helpful to you, then please feel free to share it with others that you think might benefit, too.

We also understand that annuity product information can change frequently. Therefore, if you happened to notice that any of the information in this Horace Mann annuity review was incorrect, then please let us know and we will do our best to get that updated as soon as possible.

Also, if this annuity review made this product even more confusing – and/or if it happened to spark any additional questions or concerns – please let us know that, too and we will work to make the information clearer.

Are there any other annuity reviews that you would like to see posted in our annuity review database?

If so, we’ll get on it! Just simply tell us the name of the annuity (or annuities, if more than one) and our highly trained team of annuity “geeks” will start working on those – so be sure to check back soon for updates, as well as a whole host of new annuity reviews!

Best,

The Annuity Gator

P.S If you would like to read more of our Horace Mann annuity reviews here are some links to check out:

Independent Review of the Horace Mann Life Capital Bonus 2 Fixed Annuity

 

 

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