Independent Review of the Brighthouse Financial Shield Level Selector Annuity – [November 2018 Update]
What is Covered in this Annuity Review?
In this annuity review, we will be covering the following information on the Brighthouse Financial Shield Level Selector Annuity:
- 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’ve been thinking about purchasing an annuity so that you can take advantage of tax-deferred growth but attain the opportunity for higher growth than you’d get with a “safe” financial vehicle like a CD or a bond, then the Brighthouse Financial Shield Level Selector annuity could be a viable option for you.
However, before you go out and sign on the dotted line to purchase this product, it could be extremely beneficial for you to do some additional research so that you know exactly how it may – or may not – work in your favor.
Over the past ten years or so, given the downturn that the 2008 recession brought to the U.S. stock market, there are many who are somewhat leery about putting a large chunk of their savings into an equity related vehicle. However, in order to help keep pace with future inflation – and in turn, your future purchasing power – going strictly with “safe” alternatives like bonds or CDs just won’t cut it.
So, what can investors do in order to find that balance between growth and safety from catastrophic loss? One option is to go with a “buffer” annuity. These types of annuities are akin to both a variable and a fixed index product, in that the caps on the upside are usually higher than a fixed indexed annuity, while there is also a “floor” to help you protect against large losses.
But even though this type of annuity product can sound highly enticing, just like any other “high dollar” items you consider, it is best to have a good understanding of how they work and what you can expect before you move forward.
Annuity and Retirement Income Planning Advice You Can Trust
If you have been seeking in-depth annuity information online, then you have likely become very well aware that there is no shortage of annuity review websites. Many of these websites, however, are much more interested in giving you only the basics, in return for getting your contact information. This is not helpful when considering confusing product like annuities – especially hybrid annuity products like buffer annuities.
If you have stumbled across our website for the first time, and you aren’t sure what we do, then please allow us to introduce ourselves and to welcome you here to AnnuityGator.com. We make up a team of annuity experts who focus on providing our website visitors with comprehensive and unbiased annuity reviews.
We have been doing this for a very long time now – and far longer than many of the “copycat” annuity review sites that you may already have come across. Because of that, we have become a highly trusted source of annuity information.
It is also possible that you recently have attended a seminar about annuities, where the presenter offered you a “free” lunch or dinner, while he or she went into the many details regarding the Brighthouse Financial Shield Level Selector, or some other similar annuity.
Unfortunately, we all know that nothing in life is really free. In this case, it’s probable that the presenter wanted to “follow up” with you individually in order to determine whether or not an annuity is right for you. If this is the case, then you may even have landed here on our website seeking more details before you commit to moving forward. This could prove to be a very good move.
As you read through the annuity reviews on our website, you will soon find that we don’t just paint a nice, rosy picture of how annuities work. In fact, we make it a point to also include the details that would be considered as drawbacks. We do this for the purpose of providing you the whole story about these products, and not just the “good parts.” In doing so, you will be in a much better position to make a well-informed decision regarding whether or not this is the right annuity for you.
So, if you’re ready to proceed, let’s dive in!
The Brighthouse Financial Shield Level Selector Annuity at a Glance
|Product Name||Shield Level Selector|
|Type of Product||Variable / Buffer Annuity|
|S&P Rating||A+ (Strong)|
|Phone Number||(800) 638-5433|
Opening Thoughts on the Brighthouse Financial Shield Level Selector Annuity
Brighthouse Financial is a company that was established by MetLife. The company is considered to be a strong and stable financial company – particularly in the area of life insurance and annuities, and although the company is relatively new in the industry, it has already amassed roughly $219 billion in total assets.
The company, as of September 2018, holds in excess of 2.6 million insurance policies and annuity contracts, and more than $81 billion general account investments. Brighthouse also holds high marks from all of the major ratings agencies, including:
- A (Excellent) from A.M. Best
- A (Strong) from Fitch
- A3 (Upper Medium) from Moody’s Investor Services
- A+ (Strong) from S&P
Throughout the past several years, the demand for annuities has picked up. One of the biggest reasons for this is due to annuities’ ability to provide an ongoing, guaranteed stream of income in retirement – something that other financial vehicles just simply cannot provide with a degree of certainty. However, there are many investors who may not necessarily be seeking only a lifetime income stream yet want a way to take advantage of tax-deferred growth of their savings without incurring substantial losses if the market should “correct” itself. This is where the Brighthouse Financial Shield Level Selector annuity can come in.
So, just exactly how to shield annuities work?
Shield annuities basically allow you to use a portion of your assets to take advantage of market growth, along with the assurance of a level downside protection that other investment options such as stocks and mutual funds won’t provide. With that in mind, shield annuities are essentially designed for providing some stability in an unpredictable market environment.
This annuity allows you to protect a portion of your assets, while at the same time also enjoying diversified growth opportunities. You also have the ability to essentially customize your annuity in order to fit best with your particular needs and risk tolerance.
Yet, even though this can sound like a best of all worlds scenario, it is important to keep in mind that typically there will be some tradeoffs to consider when a financial services company is offering you a grandiose opportunity. So please continue to read on.
How Brighthouse Financial Describes the Shield Level Selector Annuity Product
The Shield Level Selector annuity is a single premium deferred annuity that helps you to use a portion of your assets to participate in market growth opportunities with the assurance of downside protection.
Brighthouse Financial has a 6-year, a 3-year, and a 1-year option available on the Shield Level Selector annuity.
If you’re wanting to get an idea of the Brighthouse Financial Shield annuity rates, you can often find them by going to the Shield Annuity Rates page HERE.
The Shield annuity rates may or may not always be posted online, though – at least not the most updated ones – so in order to ensure that you receive the most up-to-date information on rates, along with the other features of this annuity, it is best to talk with an annuity specialist.
This is an index-linked annuity, which can provide you with the opportunity to participate in the market’s growth potential by tracking a market index, as versus making direct investments into certain equities or indexes.
In this case, you can choose from one or more of the following indices:
- S&P 500 Index
- Russell 2000 Index
- MSCI EAFE Index
Then, regardless of how the market actually performs, there is a built-in level of protection. This is referred to as the Shield Rate. Here, at the end of each contract term, the account value will only be reduced by the amount that exceeds the level of protection.
So, for instance, if you choose to protect 10% of your account value, and your selected index fell by 15% during a given year, then you would only experience a loss of 5%, as versus the full 15%. The available Shield protection options are 10%, 15%, 25%, or 100%.
Based on the level of protection, term length, and index that you choose, each Shield option also has a maximum growth opportunity, which is also referred to as the cap rage. As the level of protection increases, the maximum growth opportunity decreases. But this limit is in exchange for protection against negative index performance. (You can choose from up to five available indices, including the S&P 500, the Russell 2000, and the MSCI EAFE Index).
There are some other bells and whistles on this product, such as a standard death benefit which is included at no additional charge. Alternatively, you could elect instead to go with an optional return of premium death benefit.
The product also offers a terminal illness waiver, and a nursing home waiver. With the terminal illness waiver, if after the first contract year, the owner or the joint owner of the annuity becomes terminally ill and is not expected to live for more than 12 months, a withdrawal charge will be waived. Likewise, after the first contract year, a withdrawal charge will be waived if the owner or joint owner of the annuity becomes confined to a hospital or a nursing home for at least 90 days.
To check out more of the in-depth details on the Brighthouse Financial Shield Level Selector annuity – including a couple of short videos – you can go HERE.
If you really want to delve into the details about the Shield Level Selector annuity from Brighthouse, you can read over the product’s prospectus (as well as an updated supplement piece) HERE.
In addition, in order to take a peek at the minimum guaranteed rates for the Selector Annuity, you can go HERE. This outlines rates for the 1-year, 3-year, and 6-year terms.
How a Financial Advisor May “Pitch” this Annuity
With investors seeking more control over the opportunities they choose to invest their money, it is likely that a financial advisor would “pitch” the Brighthouse Financial Shield Level Selector annuity as a way to participate in upward movements of the market, while also keeping a percentage of your portfolio safe. This can help to take away at least some of the unpredictability of investing in the equities market.
In addition, based on the product’s step rate, you can also lock in pre-determined growth if your chosen index is either flat or up for a particular term. This is somewhat unique when it comes even to the locked in growth on fixed indexed annuity products.
However, because the annuity has a cap associated with it, even if the underlying index has a stellar year, your performance will be “capped” and not able to rise above that figure. Also, if you choose a step rate – which lets you lock in a predetermined percentage of growth if the index performance is flat or up at the end of a term, note that these step rates is typically lower than cap rates for the same Shield options.
In addition, according to the product’s prospectus there is still risk of substantial loss of your principal with this product (unless you allocate all of your purchase payment to the product’s fixed account). This is because the purchaser of this annuity “agrees to absorb all losses that exceed the Shield Rate for the Shield Options you select under the contract.” This means that if a negative index performance for a Shield Option you select exceeds the corresponding Shield Rate at the end of the term date, you will bear the portion of the loss that exceeds the shield rate.
On top of this – or any – annuity’s performance metrics, it is also important to be mindful of how – and how much – the insurance or financial advisor who is offering you the product gets paid.
One reason for this is because, even though most advisors are on the up and up – and will try to do what is best for their clients – the thought of not making any money can be daunting…as well as very motivating for an advisor, who may end up “pushing” certain products.
This commission schedule information, as well as other more detailed info on other key elements such as risk factors, rate crediting methods, and withdrawal provisions, can also be found in the Shield Level Selector product prospectus.
Short of reading all 180 pages, or if you become even more confused after doing so – which is actually quite common with insurance and annuity product “fine print,” please feel free to reach out to us directly and set up a time to chat with one of our annuity experts who can walk you through various scenarios and hypotheticals that are based on your specific situation and objectives.
What About the Fees on the Shield Level Selector Annuity from Brighthouse?
If you have already been approached by an insurance or financial advisor about the Shield Level Selector annuity from Brighthouse Financial, then they may have touted that there are no annual fees associated with this financial vehicle. However, this does not necessarily mean that you won’t still see some charges and / or fees with this product.
For example, this annuity is specifically designed for working over the full length of the term that you select. So, up until that term has ended, you will only be able to withdraw up to 10% of the contract’s value without a surrender charge. And, if these withdrawals are taken before you turn age 59 1/2, you will also likely incur an additional IRS early withdrawal charge of 10%.
For an up-to-date list of all charges and fees, as well as more details on what is included in this annuity product, you can find the Brighthouse Shield prospectus – along with the other Brighthouse financial product prospectuses and performance information – by going HERE.
The Annuity Gator’s End Take on the Brighthouse Financial Shield Level Selector Annuity
Where this annuity works best:
The Brighthouse Financial Shield Level Selector annuity may work best for those who are seeking the following:
- The opportunity for more growth than with a fixed annuity.
- Willing to accept some loss in of principal if the market indexes are negative.
- Lifetime income in retirement.
Where this annuity works worst:
This annuity may not be the very best alternative for those who:
- Have a lower tolerance for risk.
- Do not want any loss of principal.
- Are purchasing an annuity with the key purpose being guaranteed lifetime income in retirement.
When you are considering the purchase of an annuity, there are numerous criteria that should be factored into your ultimate decision. For example, you will want to know if – and how much – to anticipate in terms of asset growth. You will also want to think about what your primary reason is for purchasing the annuity.
The Brighthouse Financial Shield Level Selector annuity can provide you with an opportunity to earn market-linked growth, and it can also help to protect your money from considerable market downturns.
However, even with these nice benefits, their can be loss of principal. So if that bothers you this particular annuity could still fall a tad bit short – and there very well could be a better alternative out there for you. In fact, the only way to really know whether this annuity will perform well for your specific financial situation is to have it tested. We can provide this for you, so if you would like to learn more, just simply contact us here via our secure online form.
Any Additional Questions on the Brighthouse Financial Shield Level Selector Annuity? Did You Notice Any Mistakes in this Annuity Review?
While this annuity review was admittedly somewhat long, we would much rather provide our readers with more details on these confusing products than not enough, as this is really the only way to make a well-informed decision about such products.
If, however, after reading this annuity review you still have any additional questions or concerns, then please feel free to reach out to us directly via our secure online contact form here and we’ll be happy to help.
Likewise, if you found the information in this annuity review to be beneficial to you, then also feel free to forward the review and share it with anyone else that you think may also benefit from it, too.
If you happened to notice anything in this review that may be outdated or in need of revision, please also let us know that, too and we will make the necessary updates as soon as possible.
Are there any other annuities that you would like to have us review?
If so, let us know the name of the annuity (or annuities, if there is more than just one), and our team of experienced annuity geeks will get on it!
The Annuity Gator