Independent Review of Integrity Life AnnuiQuest Fixed Annuity with 1 Year Guarantee
What’s Covered In This Review
In this review, we’ll cover the following information on the Integrity Life AnnuiQuest fixed annuity with a 1-year guarantee:
- Product Type
- Current Rates
- Realistic long-term investment expectations
- How it is used
- How it is most poorly used
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The Integrity Life AnnuiQuest fixed annuity with a 1-year guarantee provides many nice benefits that retirees today may be seeking, such as protection of principal and guaranteed lifetime income in retirement. Some of the great advantages are actually built right into the base annuity product itself. However, prior to moving forward with buying this annuity, it is important to have a good understanding of how it works, and how it may fit into your overall financial situation, as well as with your specific needs, and goals.
Annuities, particularly fixed index annuities (FIAS) have been becoming much more popular today as a way for people to ensure guaranteed lifetime income. This is primarily due to the fast disappearance of the traditional pension plan offerings from many employers. Annuities can make it very easy for investors to roll funds over from a 401(k) or IRA account and continue letting them grow, while at the same time setting them up for eventual ongoing income in the future. But, even though this can be reassuring, it is also essential to understand that an annuity is a long-term commitment that can often have a surrender period of 10 years or more. This means that, after you have made the decision to purchase an annuity, it can be difficult to change your mind without having to pay a large penalty.
Really knowing what you are getting into with an annuity can be difficult, as they tend to be confusing. There can be a great deal of small print – even with fixed annuities, which offer the least amount of “moving parts.”
What can often times add the most amount of confusion, though, has less to do with the annuities themselves, and more to do with the way in which these products are sold to investors. This is where we come in.
Annuity And Retirement Income Planning Information That You Can Trust
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If you have been researching annuities online, or even if you have heard family and friends discussing these products, then it is likely that you may have encountered some conflicting details about them. This is not uncommon, as there is a lot of confusing information regarding annuities out there. Plus, even some of the most popular websites that are marketing their annuities do a very good job of getting your attention so that they can get your contact information by making bold claims such as:
- Highest Payouts
- Guaranteed Income For Life
- Lowest Fees
- Top Rated A+ Companies
- Get Your Quote Now!
Sure, some of these claims may sound great – but are any of them really true? If you would like to find out, then you have come to the right place – and dare we say, one of the only places online that offer independent and objective annuity reviews.
The insurance salespeople who are offering fixed annuities will often do their best to paint a nice, rosy picture of how safe these products are. However, what they may neglect to tell you is that there are still some drawbacks to owning this type of product – meaning that you need to know all of the angles before you plunk down your hard-earned retirement funds.
This doesn’t mean that what they are trying to sell you is bad. But what it does mean is that as you approach retirement – and as you determine what to do with the money that you’ve built up over the many years, you should know exactly what it is you are buying with it, and why. This annuity review is here to assist you in decoding all of that fine print so that you will have a better understanding of whether or not this annuity can actually help you in achieving your financial goals.
So, if you’re ready to get started, let’s go ahead and dive in.
Integrity Life AnnuiQuest Fixed Annuity with 1 Year Guarantee at a Glance
|Product Name||AnnuiQuest Fixed Annuity with 1 Year Guarantee|
|Issuer||Integrity Life Insurance Company|
|Type of Product||Fixed Annuity|
|Standard & Poor's Rating||AA|
|Phone Number||(800) 325-8583|
Opening Thoughts on the Integrity Life AnnuiQuest Fixed Annuity with 1 Year Guarantee
Integrity Life Insurance Company’s products are today issued by W&S Financial Group Distributors – which is a member of Western & Southern Financial Group. This company dates all the way back to 1888. As of mid-2015, this company had assets in excess of $70 billion and is considered to be one of the strongest life insurance groups in the world.
As an accredited member of the Better Business Bureau, the Integrity Life Insurance Company has an A+ rating, and over the past three years, it has only had one complaint filed and closed with the BBB, which had to do with the company’s product. The issue has since been closed. Western and Southern has very good ratings from the insurer rating agencies, including an AA from Standard & Poor’s and an A+ from A.M. Best. This can be a very good thing, as an annuity is really only as strong as the claims paying ability of the underlying insurance carrier.
The demand for annuities – which are always backed by insurance companies – has been steadily increasing ever since market volatility has become the norm rather than the exception. Today, the biggest fear on many retirees’ minds is running out of money – and because of that, they are looking for a safe place to put savings where they can earn some amount of return, while also remaining safe. This is where a fixed annuity can provide a viable solution.
Unfortunately, because we have been also living in a world of historically low-interest rates, the return that is often times offered is so low that it doesn’t even surpass what can be obtained in basic bank savings or money market account. Plus, because most annuities will impose a surrender charge of several years where there is a hefty penalty for withdrawing the principal, changing your mind about this financial vehicle if a better option comes along really isn’t going to be a viable alternative. So, for example, even though the literature states that the contract may be canceled at any time, it goes on to say that a cancellation would be “subject to a withdrawal charge through the seventh year.”
In addition, while the annuity does provide interest rate guarantees, the AnnuiQuest fixed annuity with a 1-year guarantee includes a special first-year only rate enhancement. But, after the first year, the insurance company will only guarantee the initial rate less the rate enhancement throughout the remainder of the guarantee period. There is a minimum rate of just 1% for the life of the contract.
Before we get into the gritty details, here are some legal disclosures…
This is an independent product review, and not a recommendation to purchase or sell an annuity. Integrity Life Insurance Company has not endorsed this review in any way, nor do we receive any compensation for providing this review. This review is meant to be an independent review at the request of readers so that they can see our perspective when breaking down the positives and negatives of this particular model annuity product. Prior to purchasing any insurance or investment product, be sure to do your own due diligence and consult a properly licensed professional if you should have any specific questions that relate to your individual circumstances. All names, marks, and materials that were used for this review are the property of their respective owners.
How Integrity Describes The AnnuiQuest Fixed Annuity with 1-Year Guarantee
On their website, Integrity Life Insurance Company describes the AnnuiQuest fixed annuity with 1-Year Guarantee as follows:
- A single premium deferred annuity
- An annuity with an initial rate that includes a special first-year-only rate enhancement
- Cash surrender value is always at least 100% of the premium paid, adjusted for any withdrawals
- Income choices for retirees, including options that can give you income for the remainder of your lifetime
There are some additional perks, including a death benefit, and the ability to withdraw funds without penalty if the annuity owner is permanently disabled prior to age 65. For more information, you can click here.
How Financial Advisors Might “Pitch” This Annuity
As an educated consumer, you may have already noticed that the insurance and financial companies do a very good job of making their products sound enticing. For instance, you might read over that bulleted list above and think that this annuity is the ideal place to put your retirement funds. And, if you are making the decision to purchase this annuity under the guidance of an insurance salesperson who stands to earn a nice commission or fee from the sale of the annuity, then you may even hear the annuity explained in an even brighter light.
When dealing with fixed annuities, here are some of the main concepts that you may hear insurance salespeople talk about when explaining them:
- Return of Premium Guarantee
- Guaranteed interest rates
- Income for life
Let’s first take a look at the return of premium guarantee. This sounds great up front – until you learn a little more about it. In this case, the AnnuiQuest product’s own literature states that the contract may, in fact, be canceled at any time. However, doing so is subject to a withdrawal charge through the seventh year.
So, while the insurance company will guarantee that the cash surrender value is always 100% of the premium paid – adjusted for any withdrawals – you will need to pay a penalty during the first seven years if you take all of your money out. These surrender charges start at 7% in Year 1, and they remain at 7% through Year 3. They then gradually grade down to 3% in Year 7, until finally going to 0% in Year 8. That’s a fairly long time to have to wait for the return of premium “guarantee”.
Next, let’s take a closer look at the guaranteed interest rates. Here, you can, in fact, choose from initial interest rate guarantee periods of up to 7 years. But, the initial rate includes a special first-year-only enhancement. After that, the only real minimum rate guarantee is that your rate won’t fall below 1% for the life of the annuity contract.
Last is the income for life feature – and although this is included on the Integrity Life AnnuiQuest fixed annuity, there are thousands of other annuities that can also make this same guaranteed lifetime income offer, while at the same time providing the opportunity for a higher return and safety of principal.
Here’s the bottom line: While there are some features of this annuity that may at first glance sound appealing, once your funds are locked up in this product, it’s too late to turn around. So, if you are wondering if this annuity is really right for you, or if you have any additional questions and you need some additional help, then feel free to reach out to us through our secure contact form right here.
Comparing annuities can be difficult, but it is necessary in order to determine which one is right for you. To download our free report on what to look for in annuities, click here.
What About the Integrity Life AnnuiQuest Fixed Annuity’s Fees?
It is also important to know what kind of fees can be involved with a fixed annuity before you purchase one. The fees and expenses that are charged in a fixed annuity will generally include administrative fees, the cost of covering the guaranteed income, and the agent’s commission. There are some fixed annuities that may also charge an annual contract fee. This is usually around $30.
In the case of the Integrity Life AnnuiQuest fixed annuity, there is an agent commission of 4% on the initial contribution. In addition, this annuity has seven years of surrender charges. These begin at Year 1 with a 7% charge, and then they grade downward until you get to Year 7 with a 3% surrender charge. Finally, in Year 8 and thereafter, the surrender charges disappear.
The Annuity Gator’s End Take on the Integrity Life AnnuiQuest Fixed Annuity with 1-Year Guarantee
Where it works best:
This annuity will tend to work best for those who are seeking:
- Safety of principal
- Balance and stability – along with the ability to lock in solid rates for a longer period of time
- A 100% return of premium guarantee – provided that they leave their money invested for the longer term
- Lifetime, guaranteed retirement income
Where it works worst:
- For people who need access to their money
- For people who are looking for a high return on their money
- For people who want a long term guaranteed period
- For people who have a higher risk tolerance
Comparing the benefits of annuities can be difficult. But we make it simple to understand. To download our free report, just click here.
Overall, an annuity should be considered as a long-term endeavor, and because of that, these financial vehicles should appeal more to those who need retirement income in the future and who are working to build up as much as they possibly can in the account in order to generate a high-income amount. Unfortunately, even though this annuity does provide some nice guarantees like protection of principal, because of its low rate – and only one year of interest rate guarantee – it does fall a little short, especially as compared to some other alternatives that are available that have higher guarantees.
If you are wondering, then, if this particular annuity is the right product for you, or if you have any questions and you need some additional help getting pointed in the right direction, then just reach out to us via our <secure contact form here>.
Have Questions on the Integrity Life AnnuiQuest Fixed Annuity with 1-Year Guarantee? See Any Mistakes?
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