What is covered in this annuity review?
In this review, we will go over the following information regarding the AXA Accumulator Series variable annuity:
- Product Type
- Fees Charged
- 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.
Annuity and Retirement Education That You Can Trust
It is possible that you have come across our website by accident, and because of that, you may not really be sure what we do or why we review annuities. The good news is, though, that if you have been seeking information on particular annuities, then you have come to the right place.
In fact, if you have been seeking information on annuities – especially via the Internet – then it is likely that you have run across various websites that are making claims, primarily for the purpose of collecting your contact information.
As an example, these websites will often state that the annuities they offer can provide the following benefits:
- High Payouts
- 7-8% Returns – With NO Market Risk!
- Low Fees
- Top Rated Companies
But the reality is that you need to be very careful when considering the purchase of an annuity from a company that makes bold claims – especially if the annuity provider does not even inquire as to your purpose for purchasing the annuity.
Also, many of the products that are offered through these websites are not even able to make good on such claims. For instance, these products – even though they provide the opportunity for market growth – will not end up netting a 7-8% return. In fact, in many cases, not even close.
Here at AnnuityGator.com we provide annuity reviews that are objective and independent. That is because we want you to determine for yourself whether or not the annuity that is being reviewed will truly make sense for your specific needs and goals. Also, we have been offering these types of reviews for many years – much longer than most of the “copycat” websites that you will find online.
So, let’s go ahead and get started!
AXA Accumulator Series Variable Annuity at a Glance
|Product Name||AXA Accumulator Series Variable Annuity|
|Type of Product||Variable Annuity|
|Standard & Poor's Rating||A+|
|Phone Number||(800) 789-7771|
Opening Thoughts on the AXA Accumulator Series Annuity
Generally, a variable annuity is designed to offer two key benefits. These are to grow principal in the account and to produce retirement income in the future. Unfortunately, the truth is that variable annuities are not all that great at producing retirement income.
One reason for this is due to the risk that variable annuities present to their investors. Another is the risk that these types of annuities can present to the insurance companies that offer them. In addition, because the value that is inside of a variable annuity can fluctuate so much, it is not uncommon for an offering insurance company to guarantee a lower amount of retirement income from a variable annuity than it will from products that are considered to be “safer” such as a fixed annuity.
With that in mind, for every dollar that you invest into a variable annuity, it could very well provide you with a lower amount of income than you could receive from a fixed annuity for the same amount of money deposited – and without all the worry and stress of the market ups and downs. For this reason, if your main objective for obtaining an annuity is future retirement income, a variable annuity may not be your best alternative.
If you are thinking about getting a variable annuity for growing principal, then these vehicles can present an opportunity for a high return. In many cases, variable annuities will offer a number of different investment options to choose from. This is the case with the AXA Accumulator Series variable annuities. Each of the annuity options in this annuity series provides the investor with a variety of investments – each with a range of different asset classes – so that an optimum portfolio may be chosen. However, because you are still working with equities, you will still have exposure to downside market risk.
Also, variable annuities can chip away at you overall returns because of the substantial amount of fees that are charged. This is because fees are not only charged from within the annuity itself, but also from the investments that are found inside of the annuity. (Fees will be discussed in more detail in the Fees portion of this review).
Before moving on to the annuity review details, there are some legal disclosures that need to be discussed…
This is an independent review. Because of that, there will be no recommendations offered here regarding either the purchase or sale of any type of annuity products. AXA has not endorsed this review in any way. The information that is being presented in this review is for the sole purpose of offering an opinion so that readers can see our personal perspective and from that, determine whether or not this particular annuity may – or may not – fit with their financial portfolio.
Before you make the purchase of any type of financial product or service, it is important that you pursue your own due diligence. It is also wise to consult with a properly licensed and competent financial professional, as doing so may help you to better determine whether the product or service may be a good fit for your specific needs and goals.
All of the trademarks, names, and materials that have been used with this annuity review are the property of their respective owners.
How AXA Describes the Accumulator Series Variable Annuities
AXA has been in the business of offering insurance and investments to its clients since the mid-1800s. Over time, the company has grown substantially into a premier provider of financial tools, as well as retirement strategies, advice, and benefits. AXA’s primary life insurance company, AXA Equitable Life Insurance Company, is considered to be among the largest life insurers in the U.S., holding nearly 2.5 million client households in the United States alone. AXA Group, a worldwide leader in financial protection, has approximately 103 million clients in roughly 59 different countries.
As of mid-2015, AXA U.S. held nearly $585 billion in assets under management, and the company had paid out individual annuity payments in the year 2014 of $1,142,390,707.1 The company is considered to be financially strong, carrying high ratings from the four major U.S. rating agencies.
AXA describes the Accumulator Series of variable annuities as offering an already diversified portfolio, or alternatively, offering the investor with the option to build your own. These annuities also allow tax-deferred growth of the funds that are inside of the account.
Additional options may also be chosen – at an additional cost – such as the ability to select one of three guaranteed minimum death benefits for the level of protection that suits the investor’s needs. A guaranteed minimum income benefit can also be chosen, which can offer a combination of retirement income generation at a guaranteed rate, along with the ability to start, change, or even stop withdrawals if the need arises.
How a Financial Advisor Might “Pitch” these Annuities
The AXA Accumulator Series annuities would likely be pitched by a financial sales person as offering flexibility to an investor. First off, investors can choose to either go with a pre-diversified portfolio of investments within the annuity or to build their own portfolio based on their specific goals and needs.
The variable annuity portfolio can, in fact, offer the opportunity for market growth, however, because it is composed of equities, it will still be at risk to market downturns – and these can have an effect on the amount of retirement income that is generated from the annuity in the future.
There is also a “benefit base” that is offered that can provide a guaranteed minimum income benefit. This, however, will cost an additional fee if an investor chooses to go this route. It is also important to note that a financial sales person may promote this guaranteed minimum income benefit as providing protection on the annuity. However, this is not the annuity’s overall cash value.
Other additional features are also available, such as the ability to leave a legacy to loved ones via a death benefit. This, too, will be made available at an additional charge to the annuity investor.
What About the Fees?
When it comes to fees, variable annuities can be one of the more expensive financial products that are available in the market – and the AXA Accumulator Series annuities are certainly no exception. In this case, there are three versions to the Accumulator annuities.
As an example of the type of fees that variable annuity holders are exposed to, though, there are charges that are indicative to the annuity itself, and there will also be charges that come from the investments that are held inside of the annuity (i.e., management fees from the mutual funds).
For instance, the Series B Variable Deferred Annuity that is in the AXA Accumulator series is subject to a plethora of fees. These include an annual administrative charge of either $30 or 2% of the account value, whichever is less. There will also be an annual contract fee of 1.30%.
Should an investor need to withdraw funds during the first seven years of the contract, they could be subject to surrender charges. These start at 7% for the first two years, then grade down to 6% for Years 3-4 and eventually go to 1% in Year 7. Finally, in the eighth year of the contract, the surrender charges will go to 0%.
The Series L annuity offers a surrender period that is shorter – only four years. However, in Year 1, the fee is higher than that in the Series B. With this option, the charge is 8% in Year 1, 7% in Year 2, 6% in Year 3, and 5% in Year 4. Starting in Year 5, there are no further surrender charges. The annual contract fee, however, is higher than that of Series B, at 1.70%.
In addition, this particular annuity in the Accumulator Series offers two options for underlying investment portfolio operating expenses. These vary by the portfolio that is chosen by the investor. For example, if the investor opts for a pre-selected portfolio, then the net annual portfolio operating expense charges can range from 0.71% to 1.10%. If the investor decides to custom select their portfolio, then the net total expenses each year could range from 0.71% to 1.44%.
On top of these expenses, it is important to keep in mind that the investment funds that are within the annuity will also each have their own management fees. Given that an investor will be hit with a variety of fees – coupled with market volatility – it can be somewhat challenging to obtain a high return with a variable annuity.
Our Take on the AXA Accumulator Series Annuities
Where it works best:
When considering the AXA Accumulator Series, these annuities can typically work the best for investors who are wanting to be invested in the market to obtain growth opportunity, yet who also want to have future retirement income. That is because these annuities allow the ability for investment in a variety of investments, while also providing for a guaranteed lifetime income.
Variable annuities such as these could also provide a potential alternative for storing additional cash in tax-advantaged vehicles if or when other tax-deferred outlets such as a 401(k) plan and/or IRA account are already “maxed out.”
In addition, variable annuities, just like any other type of annuity, can be good options for those who are worried about outliving their income in retirement. This is because variable annuities will typically offer a guaranteed lifetime income option.
Where it works worst:
If an investor does not plan to use the lifetime income benefit on the AXA Accumulator Series annuity, then this may not be an ideal alternative, and other more suitable financial vehicles may want to be considered. This is due in large part to the high fees that are incurred when investing in variable annuities. In other words, if you are simply wanting to invest in equities, there are much less “expensive” ways to do so.
When considering any type of financial product, it is always important to first determine your overall goals. For instance, in certain situations, a financial product might appear to offer both growth and income potential. But, after a complete review, these benefits might actually come at a very high price.
In the case of the AXA Accumulator Series annuities, there are some beneficial features – such as the ability to choose a pre-selected and well-diversified portfolio or to build your own, based on your specific goals and needs. There is also the option to choose the Series L in order to incur a shorter surrender fee period.
These annuities do offer the ability to obtain lifetime income. But, the income that you end up receiving will need to be weighed out by the possible risk to the principal that is inside of the annuity during the accumulation period.
With that in mind, the only way to truly know whether or not an AXA Accumulator Series annuity will be right for you is to have it tested. We can offer you this testing for free. So, contact us and we can provide you with a better illustration of what this annuity may be able to return for you.
Do You Have Any Questions on the AXA Accumulator Series Annuities? Did You Notice Any Mistakes on this Review?
Do you have any questions or concerns on the AXA Accumulator annuities? If so, we would be happy to help. Did you notice any mistakes in the review? If so, please contact us and let us know.
Throughout the past several years, annuities have become more popular with consumers – and primarily those who are getting closer to retirement. This is due in large part to the fact that annuities can provide a guaranteed retirement income. Because of this, many financial sales people have been pushing annuities on their clients – even though the annuity may or may not even be the right thing for that client.
Annuities can be confusing, though. And, when considering the purchase of an annuity, you really need to have a good understanding of it. These should be considered as long-term
financial vehicles – so you really do not want to make a costly mistake. An annuity can be difficult to get out of, once you’ve gotten in.
So, if an annuity that you are considering does not seem to make sense to you, then it is essential that you ask questions now. If, however, an annuity does make sense for you and your financial situation, then it could be a great addition to your portfolio.
Should there be any other investors that you know of who may benefit from an annuity, then you can share this review with them. These days, there are a lot of investors who are receiving conflicting details regarding annuity products. Our goal is to offer information about these vehicles in an unbiased and objective manner so that people are able to better understand them and in turn so that they can then determine for themselves whether an annuity makes sense for them.
If you are able to help spread the word, then it could be beneficial. For instance, if you happen to have a Facebook account, then you can just simply click on the little Facebook icon so that the article can be shared and so that more people can find it, and hopefully can also benefit from it.
Also, if you do happen to notice that any of the details in this review are in need of updating, then please contact us and let us know. Just as with any other financial product, annuities tend to change often, and because of that, they can be somewhat difficult to keep up with. We are always happy to make the updates that are necessary in order to ensure that the information on this site is clear and easy to understand.
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