Independent Review of the American General Life Insurance Company Power 10 Protector Plus Income Index Annuity
What Will Be Covered in this Annuity Review
In this annuity review, we will be going over the details regarding the American General Life Insurance Company Power 10 Protector Plus fixed indexed annuity, such as:
- Product type
- Current rates
- Realistic long-term return expectations
- How it is 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 idea of purchasing an annuity because you are seeking additional tax-deferred growth, protection of principal (in any market environment), and a lifetime income stream, then the American General Life Insurance Company’s Power 10 Protector fixed indexed annuity could be a good option for you.
But before you make a long-term commitment to this – or any other – annuity, it is best if you first get a good understanding of how the product works, and how it may or may not live up to what you need it to do for your specific financial goals and needs. This review of the American General Life Insurance Company’s Power 10 Protector Plus Income annuity review can help you to do just exactly that.
Over the past decade or so, annuities have become quite a bit more popular for those who are planning for their future retirement income. One reason for this is because an annuity can offer you a guaranteed stream of income for life, regardless of how long you may need it.
However, with the good also comes the bad – or at least certain tradeoffs that you might need to make in order to get that guarantee. For instance, during their growth phase, a fixed annuity will provide you with the safety of your principal. But the returns that are generated on fixed annuities are typically quite low – and are oftentimes in life with the returns generated on CDs, money market accounts, and other safe alternatives. Because of that, even though you aren’t actually “losing” money, you are losing future purchasing power, as fixed annuity returns oftentimes won’t even keep pace with inflation.
Alternatively, you could go the route of a variable annuity. Here you have the opportunity to get higher returns, based on the performance of the underlying investments. This would be great if the market always went up….but we all know too well that it doesn’t. So, with a variable annuity, you run the risk of losing principal. And that really isn’t very appealing if you’re trying to keep your hard-earned money safe as you approach retirement.
Enter the fixed indexed annuity!
With a fixed indexed annuity like the Power 10 Protector Plus Income annuity from American General, you have the opportunity to earn a higher return than a regular fixed annuity because your return is based on the performance of an underlying market index, such as the S&P 500.
So, if the index performs well, you’ll be credited with a positive return. If, however, the underlying index performs poorly during a given year, your annuity won’t lose value, but rather will be credited with a 0% return.
This ability to earn, but not lose, has made fixed indexed annuities a popular choice among pre-retirees. But, just like anything else that may sound too good to be true, you need to find out the whole story before you dive in.
That’s where the Annuity Gator can help.
Annuity and Retirement Income Planning Information You Can Trust
If this is the first time you’ve visited our website, then please allow us to personally welcome you to Annuity Gator. We are a team of experienced annuity professionals who focus on offering very in-depth, and unbiased, annuity reviews online.
We’ve been doing this for quite some time now – longer than many of our competitors…even though there are some websites that offer “copycat” information, based on our reviews.
If you’ve spent any amount of time online looking for annuity information, you may have come across some highly conflicting details about these financial tools. That really isn’t all that surprising, though, as there are many varied opinions about these types of products.
There are also a fair number of annuity-related websites that will try to lure you in for the purpose of giving them your contact information. They’ll oftentimes do so by stating some pretty bold claims, like:
- Lowest fees
- High income
- Top-rated annuity carriers
- Income stream for life
Yet, while these claims might sound truly enticing, it’s important to be aware of whether or not they are actually true.
Annuities can have a great deal of “fine print,” so reading up on the ins and outs of how they work can be somewhat time-consuming. But there is an easier way to learn how a particular annuity works by going over a comprehensive review.
That being said, if you are here to obtain more details about the American General Life Insurance Company Power 10 Protector Plus Income annuity, then you are certainly in the right place.
In fact, dare we say that Annuity Gator is the only website where you will find all of the information that you need – which includes the good, as well as the not-so-good. This, however, is really the only way for you to make a realistic and well-informed decision about whether or not this annuity is right for you.
So, if you’re ready to get started, let’s jump in!
American General Power 10 Protector Plus Income Annuity at a Glance
|Product Name||Power 10 Protector Plus Income|
|Issuer||American General / AIG|
|Type of Product||Fixed Indexed Annuity|
|S&P Rating||A+ (Strong)|
|Phone Number||(800) 445-7862|
Opening Thoughts on the American General Power 10 Protector Plus Income Annuity
American General Life Insurance Company has been offering its products for more than 160 years. The company has a mission of being the premier provider of protection, investment, and income solutions that are needed for both financial and retirement security. Today, the company is a part of AIG.
As of year-end 2017, AIG held total assets of more than $208 billion. The company serves in excess of 10 million customers around the globe. Considered strong and stable financially, AIG has very high ratings from the insurer rating agencies, including an A+ from S&P, an A2 from Moody’s, an A from A.M. Best, and an A+ from Fitch Ratings.
Over the past several years, the demand for fixed indexed annuities has risen significantly. This is due in large part to the volatility in the stock market, and the need for people to both grow and protect their money at the same time. A fixed indexed annuity is oftentimes touted as the “best of all worlds,” because they allow their owners a way to secure a positive return in good times, and to hang on to their principal value during market downturns.
But it is essential to know all of the in-depth details about a fixed indexed annuity you are considering before you move ahead with depositing a large chunk of your money into one – as it can be difficult, and costly, for you to get out if you later realize that it really isn’t the best option for you.
Before we get into the gritty details, here are some legal disclosures we need to provide…
This is an independent product review, not a recommendation to buy or sell an annuity. American General has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This review is meant to be an independent review at the request of readers so that they may see our perspective when breaking down the positives and negatives of this particular annuity. Prior to purchasing any type of investment or insurance 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 circumstances. All names, marks, and materials that were used for this review are the property of their respective owners.
For more details on how you can compare annuities so that you can determine which one may be right for you, click here to instantly download our free annuity report.
How American General Describes the Power 10 Protector Annuity
In its literature, American General describes the Power 10 Protector Plus Income index annuity as a product that offers principal protection, growth potential, and lifetime income – along with the opportunity to guarantee rising income for up to ten contract years. And, if no withdrawals are taken in the first ten contract years, your income could even double.
There are also some additional features that you’ll find on this annuity, such as the opportunity for a 3% premium bonus, and a number of different interest crediting strategies, so you can essentially “customize” the underlying investment options to best meet your specific needs. Here, you will find that there are six interest-crediting strategies to choose from, which include three S&P 500 index options, two ML Strategic Balanced Index strategies, and one fixed interest crediting option.
What really makes this annuity stand out when it comes to the receipt of income is the Lifetime Income Plus guaranteed living benefit rider. This can ensure the growth of the income base by locking in the greater of the interest that is earned from the contract, or an annual income credit of up to 7%.
Here is how this works:
The income base will increase by 7% every year that withdrawals are not taken during the first ten contract years. If the interest earned in the contract is higher than 7% and results in an anniversary value that is greater than all previous anniversary values, then the income base will “step up” to that amount.
The income base can rise during the first ten years – which in turn can provide you with increasing income, even after you have started to take income withdrawals. In this case, you can receive a partial income credit, as long as withdrawals are taken according to the terms of the rider.
Here, for instance, if you take a 5% withdrawal during the first ten contract years, your annual income credit would be 2%. This amount will be locked into your income base, and will not decline due to market performance. (More on the income rider will be discussed below).
It is important to note, though, that the annuity’s income base is the amount on which lifetime withdrawals (and the rider fee) are based. But it is not a part of the contract value.
Some of the other features that you’ll find on this annuity include a terminal illness rider and an extended care rider. With these benefits, you may be able to take a partial – or even a full – withdrawal without penalty, provided that you need the health-related qualifications.
For more details on how this annuity works, you can check out the product literature HERE.
You can also directly compare the American General Life Insurance Company Power 10 Protector, and Power 10 Protector Plus Income annuities HERE.
How an Insurance or Financial Advisor Might “Pitch” this Annuity
Given that people are living so much longer today than ever before, having enough income in retirement has become a top concern for many retirees. With that in mind, the guaranteed income concept of the Power 10 Protector Plus Income is most likely where an insurance or financial advisor would focus when presenting this product to clients or prospects.
An additional aspect is the beneficiary protection that is provided by the Power 10 Protector. Here, in the event that the annuitant passes away before receiving all of the contract value back, a named beneficiary can receive the funds, without them having to pass through probate.
But even with all of these awesome features, you really need to be careful, as there are some “tradeoffs” you may need to make with this product. For instance, even though you have the ability to obtain a positive return based on the performance of an underlying index (or indexes), the upward potential is capped.
In other words, this annuity uses an annual index rate cap, which is another way of saying that there is a maximum amount of return you can earn each year – even if the underlying index(s) have a stellar performance. In this case, if the cap on earnings is 4%, and the underlying index return 6%, you will only receive 4% for that time period. In addition, excess withdrawals will void any income credits, and can even reduce the income base.
Also, the 3% premium bonus that you have the opportunity to “earn” will actually take ten years to vest. So, during this ten-year time period, if you annuitize the contract (i.e., convert over to income), pass away, or take withdrawals that are more than the allowable free withdrawal amount, then you will have to give up a portion of this bonus.
What About the Fees on the Power 10 Protector Plus Index Annuity?
Just like with most other annuities, you can run into some fees with the Power 10 Protector Plus Income from American General. First off, there is an annual fee for the income rider. So, this can basically eat into the return that you ultimately generate.
Also, if you withdraw more than 10% of the contract value during the first ten full years of owning the contract, you’ll incur a surrender charge. These begin at 10% in Year 1, and they gradually grade down as follows:
Surrender Charge Schedule
In addition to that, if you make such withdrawals before you turn age 59 ½, then you could be hit with an additional 10% “early withdrawal” penalty from the IRS. Yikes!
And, if you take a withdrawal that is in excess of your penalty-free amount during the first ten years, you can also find that you will be hit with a “premium enhancement recapture.” Remember that 3% premium bonus that you can receive up front? Well, you could end up losing some – or all – of it.
Premium Enhancement Recapture Schedule
|Premium Enhancement Recapture %||100||90||80||70||60||50||40||30||20||10||0|
The Annuity Gator’s End Take on the American General Power 10 Protector Plus Income Annuity
Where it works the best:
Although this Income annuity offers many nice benefits, it will typically work the best for those who are seeking the following attributes:
- Safety of principal
- The opportunity for additional, index-linked growth, which can provide a higher return than a regular fixed annuity
- Guaranteed income for life
Where it works the worst:
Conversely, there are some areas where this product may not be the best option. That may be for people who:
- Will need access to more than 10% of the contract’s value within the 10-year surrender period
- Do not intend to use the lifetime income feature
If you are still considering the purchase of the American General Life Insurance Company’s Power 10 Protector Plus Income fixed indexed annuity, but you’re still on the proverbial fence regarding whether or not it will be right for you, we can help you to “test” it, based on your specific scenario, at no cost or obligation.
Just let us know if this is something that you are interested in doing, and we’ll get on the case right away!
There is a long list of factors that need to be considered when you are planning for your future retirement income. And, when it comes to using annuities for either your primary income stream or even for filling in any retirement income “gaps,” it is essential that you know just exactly what you can anticipate. That’s because a different amount of income than you were planning on can make a big difference in your retirement lifestyle and on your life!
In terms of the Power 10 Protector Plus Income annuity from American General, you can be assured that you will have an income for life. But at the same time, depending on your other goals and needs, this product may still fall a bit short – and there quite frankly may be something else out there that is a better fit for you.
If you do have any questions on this or other income related products, we are here to help. So please feel free to contact us directly via our secure online contact form here.
Do You Have Any Additional Questions About this Annuity? Did You Happen to Notice Any Mistakes on this Annuity Review?
We realize that this annuity review may have been a tad bit longer than usual. But, we would much rather that you have too much information on this product than to not have enough. So, if you found this annuity review to be beneficial, please feel free to pass it on and to share it with other people who could also find value in it. (And, if you found it to be confusing, please also let us know that, too.)
In addition, we are aware that information regarding annuities can, and often does, change. So, if you happened to notice anything in this review that should be updated or revised, let us know and we will be happy to make the necessary edits.
Any other annuities that you would like to learn more about?
If so, just give us a shout and let us know, and our team will get to working on them right away.
The Annuity Gator
P.S If you would like to read more of our AIG annuity reviews here are some links to check out.
- AIG – Polaris Choice IV Variable Annuity
- AIG – Polaris Platinum III Variable Annuity
- AIG – Power Index Plus Annuity
- AIG – Power Index Plus Income Annuity
- AIG – American Pathway 7 Fixed Annuity
- AIG – Choice Index 10 Annuity
- AIG – American Pathway 5 Fixed Annuity
- AIG – Assured Edge Income Builder Fixed Annuity
- AIG – American Pathway Solutions MYG Fixed Annuity
- AIG – American General Power Advantage 10 Fixed Index Annuity
- AIG – American General Power Select Fixed Index Annuity
- AIG – American General Life Insurance Company QLAC
- AIG – American Pathway Annuity
- AIG – Pathway SolutionsMYG Annuity
- AIG – American General Power Select Plus Income Annuity – April 2018 Update
- AIG – American General Life Insurance Company Power 10 Protector Index Annuity