Independent Review of the American Equity Choice 10 Fixed Index Annuity
What’s Covered in this American Equity Choice 10 Fixed Index Annuity Review?
In today’s review, we’ll be covering the following information on the American Equity Choice 10 Fixed Index Annuity:
- Product type
- Current rates
- Realistic long term return expectations
- How this annuity is best used
- How it is most poorly used
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The Choice 10 Fixed Index Annuity from American Equity is an annuity that offers a wide array of benefits, including the opportunity for growth, and the protection of principal – even if the market suffers a substantially negative period – which for many people, could seem like the best of both worlds.
This product also offers some of the more common features that you’ll see on this type of annuity, such as the tax-deferred growth of the funds that are inside of the account, liquidity (albeit, limited at first), and guaranteed income in the future. It offers a choice of indexing options, that offer growth potential, as well as a fixed interest account.
Annuity and Retirement Income Planning Education That You Can Trust
If you have never visited our website before, we would first like to officially welcome you to AnnuityGator.com. Here, you will find that we are a team of experienced insurance and financial professionals who focus on offering unbiased reviews of annuities.
For anyone who is looking for more annuity information – and not just the positive information that you’ll typically find on annuity sales websites – then you’ve definitely come to the right place.
There are any number of reasons why you might be looking for more details on the American Equity Choice 10 annuity, and the good news is that you will find what you’re looking for here. It is possible that you’ve already been presented this annuity by your financial advisor, or you may even have recently attended an annuity seminar where the presenter offered you a free lunch or dinner in return for pitching you this or a similar product. While you may have been impressed with what you’ve heard so far about the Choice 10 annuity, though, the reality is that there is no such thing as a “free lunch.”
While searching for information on various other annuity websites, you may also have found that you were lured in by claims stating that these sites offer the highest annuity payouts, the lowest fees, and other enticing information. Unfortunately, most of this hype is marketed so that visitors to these websites will part with their contact information.
What you will find here at AnnuityGator.com, however, is different. We’ve been offering in-depth annuity reviews for many years now – and because of that, we have become a highly trusted source of annuity information. Since we’ve been offering this service, though, numerous copycat websites have come along.
Based on our experience, we’ve actually discovered that none of the benefits of an annuity really matter until you first understand what your primary reason is for buying it. In addition, even if you are seeking a nice rate of return, most fixed index annuities will not be able to produce 7 to 8% – and definitely not consistent over time.
Want to find out how annuities really work – and how they may, or may not, work for you? Then feel free to instantly download our 2017 Annuity Buyer’s Guide.
If you stick around our site for just a while and go through this review, you will find that the information is objective and non-biased. So, if you’re ready to find out how the American Equity Choice 10 fixed index annuity really works, let’s go ahead and get started.
American Equity Choice 10 Fixed Index Annuity – The Basics
|Product Name||Choice 10|
|Type of Product||Fixed Index Annuity|
|Issuer||American Equity Investment Holding Company|
|A.M. Best Rating||A- (Excellent)|
Opening Thoughts on the Choice 10 Annuity
American Equity has been in the business of offering annuities for more than 20 years. Today, this company is ranked as the number three all-time fixed index annuity provider, with more than $43 billion in assets, and high ratings from both Standard & Poor’s and A.M. Best.
Over the past several years, fixed index annuities have become quite popular, as a way to get a nice potential return, along with the safety of principal. Given the constant volatility of the market, these annuities have led many investors to feel that they are keeping their money safe, while at the same time, building a nice retirement income stream for the future.
This annuity offers five different interest crediting methods, including an annual point-to-point with cap, annual point-to-point with participation rate, monthly point-to-point with cap, volatility control, and a fixed option.
Given that today, people are living longer than ever before in history, the thought of running out of income in retirement is a very viable concern. Because of that, many insurance carriers that offer fixed index annuities have added riders to their products, which can provide annuity holders with an income that they literally can’t outlive.
In the case of the American Equity Choice 10 annuity, there are several different income payout options available. Plus, because the unexpected can and sometimes does occur, in the event of death, a named beneficiary can receive the entire contract value with this annuity.
The Choice 10 fixed index annuity also offers some additional riders that can increase the amount of liquidity in the event of confinement in a nursing home, or if the annuitant is diagnosed with a qualifying terminal illness.
While all of these benefits may sound enticing, though, it can still be difficult to know for sure which – if any – annuity will be right for you. So, if you still have questions or concerns, and you want some first-hand and unbiased information, please feel free to reach out to us directly via our secure contact form here.
Before we get into the gritty details, here are some legal disclosures…
This is an independent product review, not a recommendation to buy or sell an annuity. American Equity has not endorsed this review in any way nor do I receive any compensation for this review. This review is meant to be an independent review at the request of readers so they could see my perspective when breaking down the positives and negatives of this particular model annuity. Before purchasing any investment product be sure to do your own due diligence and consult a properly licensed professional should you have specific questions as they relate to your individual circumstances. All names, marks, and materials used for this review are the property of their respective owners.
For additional information on how to compare fixed indexed 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 American Equity Describes The Choice 10 Fixed Index Annuity
According to American Equity’s Choice 10 literature, this product is a fixed index annuity that offers both protection and income – guaranteed.
The top benefits that this annuity includes:
- Principal Protection (even in down market years)
- Guaranteed Income
- Tax-Deferred Growth
- Possible Avoidance of Probate
There are a couple of other additional features, such as a death benefit – which pays out the contract value, with no surrender charges, in the event of the annuitant’s death. There is also a terminal illness rider that provides 100% penalty-free withdrawals, and a nursing care rider – also offering 100% penalty-free withdrawal, provided that certain criteria have been met.
Yet, while all of these features may sound great, the reality is that there are some features related to this annuity that could be considered drawbacks – so, with that in mind, it is important to read over all of the “fine print” before you move forward with the purchase of this, or any, annuity, as you may find that you’ve made an expensive decision.
For example, there is an additional charge for the optional riders on this product. Also, the riders have some stipulations before you will qualify for these additional benefits. For example, in order to take advantage of the nursing care rider, you would need to wait until after the third contract anniversary.
There is also a “deductible” per se of 90 consecutive days spent in a nursing facility before the annuity funds can be accessed. Likewise, the terminal illness rider requires that the annuitant waits until at least after the first contract year in order to access the penalty-free funds from the annuity.
So, even though the opportunity for growth and the safety of principal can be nice to have, the reality is that these features can be found on a long list of other fixed indexed annuities, too – and if you are able to find these benefits, while also gaining access to added features, then it may be well worth taking a look at possible alternatives.
Deciding which annuity is right for you can be somewhat overwhelming. There are many different variables to consider – and you want to be sure that you’re choosing the best option for you.
This is particularly the case, as once you have committed yourself to an annuity, it can be fairly difficult – and costly – to get out. So, before you run out and complete an American Equity Choice 10 fixed index annuity application, be sure that you’ve had all of your questions answered and you feel fully comfortable moving forward.
If you would like to get any additional information or you still have more questions about how to choose an annuity, then please click here so that you can immediately access our free report on what you need to know when considering an annuity.
How a Financial Advisor Might Pitch this Annuity
Today, many of the insurance and financial advisors who offer fixed index annuities will pitch the fact that you have the opportunity for higher return – especially as it relates to regular fixed annuities – as well as the ability to keep your principal safe when the market tanks.
When an advisor is showing you this – or any – annuity, though, be sure that you’re getting the whole story – and that you have a good understanding of just exactly what you’ll be getting should you decide to sign on the dotted line.
Over the years, there have been numerous enhancements made to annuities. This is particularly the case when it comes to fixed index annuities – which are sometimes referred to as “hybrid” annuities. This name can conjure up numerous images – but one that seems to be consistent is confusion. This is true for both consumers and financial advisors, as the bells and whistles that are offered can seem a bit overwhelming.
The good news is, though, that the term hybrid annuity really just refers to numerous features that are all rolled into one single annuity product. In this case, the American Equity Choice 10 annuity does allow you to pick and choose among various features. But the question is, do you really need these features – and even more so, will these features perform in the manner that they were presented?
For instance, there are many financial advisors who state that the fixed index annuities they offer will return between 7 and 8%. This, however, is not necessarily the case in reality. Most advisors are not intentionally misleading their clients. Rather, fixed index annuities can be difficult to understand.
American Equity Choice 10 Annuity Fees
Just like with most any insurance and financial product, the American Equity Choice 10 fixed index annuity will have some charges and fees that are associated with it. For starters, there is typically an up-front sales commission that is paid out to the agent who sells you this annuity.
Also, if you want to take out more than 10% of your contract value in any given year within the first decade that you own it, you will incur a surrender charge. In fact, the American Equity Choice 10 has one of the longer surrender charge periods in the industry.
The Annuity Gator’s End Take on the American Equity Choice 10 Fixed Index Annuity
Where it works best:
The bottom line on the Choice 10 is that this annuity may work the best for people who are looking for the following features:
- Safety of principal
- The opportunity for index-linked growth
- Guaranteed lifetime income in retirement
Where it works the worst:
The American Equity Choice 10 Annuity may not be such an ideal fit for you if you are looking for:
- Access to most or all of your money within the first eleven years
- You do not intend to use the lifetime income feature of the annuity
In order to truly get an idea of whether or not a fixed indexed annuity such as the American Equity Choice 10 fixed index annuity is right for you, click here so that you can access our free annuity buyer’s report.
You can also benefit by running the numbers on the American Equity Choice 10 fixed index annuity calculator. While many annuity sales brochures will provide you with hypothetical information, running the figures based on your specific situation will at least get you somewhat closer to being in the ballpark. Click here if you would like us to run an individual spreadsheet for you.
There are many key factors that you need to consider when you are deciding whether or not an annuity is right for you. But, regardless of the type of annuity you are thinking about, as well as where you may purchase it from, all annuities should be considered as long term endeavors.
In the case of the American Equity Choice 10 annuity, you can be assured that your principal is safe and that you will also have the opportunity for a higher return – provided that the underlying market index (or indexes) performs well.
Likewise, when you are ready to convert your funds over into a stream of income in retirement, that too can be accomplished with this financial vehicle. And, if the lifetime income option is chosen, you can count on that income for the rest of your life.
So, there are definitely some nice benefits associated with the Choice 10 annuity. However, this product could also fall somewhat short. And, quite frankly, there may be some better alternatives out there for you.
So, if you still have any questions or concerns that have not been answered in this review, or if you would like to talk directly to an unbiased annuity expert, then please feel free to reach out to us via our secure contact form here.
Need Any Additional Information About the Choice 10 Annuity? See Any Mistakes that Need Correcting?
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