What We Will Cover in this Annuity Review
In this review, we will be discussing the following details on the American Equity Guarantee 5 MYGA annuity:
- Product type
- Current rates
- Realistic long-term return expectations
- How this annuity is best used
- How it 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 have been considering the purchase of an annuity so that you can experience tax-advantaged savings, as well as an ongoing income in retirement – regardless of how long you may need it – then the American Equity Guarantee 5 MYGA annuity could be a viable option for you.
But, before you run out and commit to this financial vehicle – or any other one like it – it is necessary to first have an in-depth understanding of how the annuity works, as well as how it may or may not fit in with your overall financial goals.
For the past several years, we have seen a vast increase in the demand for fixed rate annuities. Part of this is due to the volatile stock market, which could render your hard-earned savings lost if a stock market “correction” occurs. In addition, because these annuities can provide you with a lifetime income in the future, they can also help to alleviate the worry about running out of income when you need it.
However, due to the increased popularity of annuities lately, many insurance companies have been coming up with new products, which will oftentimes include a long list of features and benefits – as well as confusion, both for consumers and financial advisors who offer them. So, unless the financial or insurance advisor that you work with has a key focus on offering annuities, you should really read the “fine print” before making a long-term commitment.
Annuity and Retirement Income Planning Information You Can Trust
If this is your first visit to our website, then please allow us to welcome you here. At AnnuityGator.com, we are a team of annuity professionals who focus on providing comprehensive, and unbiased, annuity reviews.
We’ve been at this for quite a few years now – longer than our competitors. And, because of the in-depth reviews that we provide, we have become a highly trusted source of annuity information online.
Over the past decade or so, however, there has also been a number of “copycat” websites that have popped up on the Internet. While some of these can give you information about annuities, what you are likely to find is that they are oftentimes just simply reiterating what our information already shows.
When reviewing annuity products online, you may also have encountered many conflicting details about these products. This, however, is not really all that surprising, as there are a myriad of annuity products, along with just as many – if not more – opinions about them.
It is possible that you have recently attended a seminar about annuities where, in return for a free lunch or dinner, the presenter provided you with more in-depth details about the American Equity Guarantee 5 MYGA annuity – or some other similar financial product. Your attendance at this seminar may even be what has ultimately led you here to our website for additional information.
While you’ve been online researching annuities, it is likely that you have run across some of the websites that – for the most part – will try their very best to “lure” you in (and provide them with your contact information), by making some pretty bold claims like:
- High Annuity Income Payouts
- Guaranteed Income for Life
- Top-Rated Annuity Carriers
- Low Fees
Does this look familiar?
But, as nice as these claims may sound at first, it makes it all the more necessary that you ensure that they are true before you plunk down a large chunk of your retirement savings. Otherwise, it could be quite difficult, and expensive, for you to take your money out of the annuity if you later change your mind.
In any case, if you’ve been seeking more details regarding the American Equity Guarantee 5 MYGA annuity, then you are definitely in the right place. In fact, we dare state that this website is the only place online where you can obtain all of the information that you require for making a well-informed purchasing decision about this annuity.
Before we get too deep into this review, we do want to be perfectly clear in stating that we believe that annuities can be a good financial option for some people – as long as they fit in with your other short- and long-term financial goals.
So, if you’re ready to begin, let’s go ahead and dive in!
American Equity Guarantee 5 MYGA Annuity at a Glance
|Product Name||Guarantee 5 MYGA (Multi-Year Guarantee)|
|Type of Product||MYGA / Fixed Annuity|
|Phone Number||(888) 221-1234|
Opening Thoughts on the American Equity Guarantee 5 MYGA Annuity
American Equity Investment Life Insurance Company is known for being a specialist in the annuity niche. This company was initially founded in 1995 – and, even though American Equity is considered by some standards a “newbie” in the insurance and annuity industry, it has definitely made a name for itself in just a short period of time. This is particularly true in the area for fixed and fixed indexed annuity products.
Financially, American Equity Investment Life Insurance Company is considered to be strong and stable from a financial perspective, and it has also earned good, positive ratings from the insurer rating agencies. These include an A- from Standard & Poor’s, and an A- from A.M. Best.
Throughout the past several years, fixed and fixed indexed annuities have become quite popular with those who are on the brink of retirement. One of the key reasons for this is because of the continuous ups and downs of the stock market. Those who are planning for retirement – as well as retirees – can benefit from annuities, due to their tax-deferral of earnings, as well as their ability to provide income for life.
But, even while this can sound like a concept that is too good to be true, it is all the more necessary to first check it out, because there can be other components about annuities that are not quite as appealing to everyone.
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. American Equity 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 out 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 American Equity Describes the Guarantee 5 MYGA Annuity
American Equity describes the Guarantee 5 MYGA annuity as a product that offers:
- Guaranteed Income
- Liquidity Features
- Avoidance of Probate
In addition, this annuity offers a multi-year guaranteed interest rate. And, within 30 days after the end of the guarantee period, you may choose to do one of the following:
- Apply the contract value to a settlement option
- Take partial withdrawals – without any market value adjustment or surrender charge – and apply the remaining contract value to a new guarantee period
- Surrender the annuity for the full contract value, without a market value adjustment or surrender charge
- Renew the annuity for another guarantee period of the same duration as the previous guarantee period. (It is important to note that this option will be automatically exercised if none of the others are chosen).
The annuity also offers a death benefit, whereby at the first to die (of the annuitant or owner), the company will pay out the full contract value to the named beneficiary (or beneficiaries).
How a Financial or Insurance Advisor Might “Pitch” this Annuity
Because so many people who are preparing for retirement are concerned about growing their savings, while at the same time keeping their principal safe, it is possible that an insurance or financial advisor would present this annuity as a vehicle for accomplishing both of those goals. Plus, there is also the option to choose income for life with this product, either for just one individual or for two individuals.
As a Multi-Year Guarantee Annuity or MYGA, the base interest rate at the beginning of each term is guaranteed to be the base interest rate at the end of the term as well. And, with this particular product, there is a 5-year term.
Yet, even though most of us love to hear the word “guarantee,” it isn’t all that it is initially cracked up to be in some cases. For example, currently, the guaranteed minimum interest rate on this product is a mere 2.30% – which quite honestly is not all that great.
In fact, you could opt to go with the basic money market or savings account, and even though your rate would be a tad bit lower, you would not lose out due to commissions or surrender charges if you needed access to your money right away.
And then there are the fees…
What About Any Fees on the Guarantee 5 Annuity from American Equity?
While annuities – and particularly fixed annuities – can provide you with a long list of guarantees, you have to look out for any fees that you may be charged with these products, as a plethora of even “small” fees can really add up and negatively affect your ultimate return. This could, in fact, be the case with the Guarantee 5 annuity from American Equity.
Here you will find that there is an initial up-front commission of:
- 3.00% for issue ages 18 to 75
- 2.10% for issue ages 76 to 80
- 1.50% for issue ages 81 to 85
Plus, as with most other annuities, you’ll also incur a surrender charge if you opt to take out more than 10% of the contract value within the first several years. In the case of this particular product, there are five years of surrender fees. These start at 9% in Year 1, and grade down by one percent each year, until reaching 0% in Year 6.
The Annuity Gator’s End Take on the American Equity Guarantee 5 MYGA Annuity
Where it works best:
Although this annuity may not be ideal for everyone, it could be a nice option if you are seeking the following features:
- Guaranteed growth
- Protection of your principal
- Guaranteed income in retirement
Where it works the worst:
The Guarantee 5 MYGA annuity may not, however, work very well in all situations. This is especially the case if you:
- Are seeking the opportunity for a higher rate of return
- Want or need to access more than just 10% of your money within the first five full years of each term
- Do not plan to use the lifetime income feature on the annuity
There are numerous factors that should ideally be considered with you are thinking about the purchase of an annuity. For example, just some of these include the annuity’s ability to grow your money, as well as the way in which it protects your principal. Also, because many people purchase annuities in order to attain a long-term (or even a lifetime) income in retirement, this too is a key criterion. Plus, even though many annuities will offer additional features by way of adding a rider, these will oftentimes have an added cost, which in turn, can affect your overall return.
If you are considering the purchase of a multi-year guaranteed annuity product like the American Equity Guarantee 5, then you are be assured that your money will be safe, regardless of what occurs in the stock market. You can also be sure that you will receive income in the future – possibly even for your entire lifetime, as well as the lifetime of another individual that you choose.
But, even with all of the nice features that this annuity can provide for you, there may still be a better alternative out there for you – particularly if you are seeking the opportunity for a higher rate of return.
All in all, the only way to really be sure of whether or not the American Equity Guarantee 5 MYGA annuity may be right for you is to have it tested, based on your specific criteria. We can provide this for you. If you would like to have the numbers run based on your personal financial figures, then just let us know by contacting us via our secure online form.
Any Additional Questions About This Annuity? Did You See Any Mistakes?
While we do realize that this annuity review was somewhat lengthy, we also would prefer to “err” on the side of offering you “too much” information about this annuity than not providing you with enough. That being said, if you felt that this annuity review was helpful for you, then by all means, please feel free to pass it along and share it with anyone else whom you think would also benefit from it. If, however, this review led you to have even more questions, please let us know.
Any other annuities you would like to see reviewed?
There are a lot of annuities out there in the marketplace. So, if there is one that we have missed, and you would like to see a more in-depth review written about it, please let us know that, too and our team of annuity geeks will get on the case asap. And, please be sure to check back in soon to view any of our new and updated information.
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