What is Covered in this Great American American Freedom Stars and Stripes 5 MYGA Annuity Review?
In this review, we will be discussing the following details on the Great American American Freedom Stars and Stripes 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 Freedom Stars and Stripes annuity from Great American could be a viable option for you.
However, before you run out and commit to this financial vehicle – or any 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 been a vast increase in the demand for annuities. Part of this is due to the volatile stock market, which could render your hard-earned savings lost if a “correction” occurs. In addition, because annuities can provide a lifetime income in the future, they can 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 often times 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 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, allow us to officially welcome you to AnnuityGator.com. We make up a team of annuity pros who focus on offering very comprehensive – and unbiased – annuity reviews. We have 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 Stars and Stripes 5 annuity from Great American, or some other similar product. You attendance at this seminar may even be what led you online to do additional research before moving forward.
In doing so, it is probable that you have come across some of the annuity marketing sites that, for the most part, will try their best to lure you in by making some pretty bold claims, such as:
- High Annuity Income Payouts
- Guaranteed Income for Life
- Top-Rated Annuity Carriers
- Low Fees
Does this sound familiar?
But, as nice as these claims may sound at first, it makes it all the more necessary that you first make sure that they are valid before you plunk down a large chunk of your hard-earned retirement savings. Otherwise, it could be extremely difficult, and costly, if you try to take your money out if you change your mind.
If you have been seeking additional details about the American Freedom Stars and Stripes 5 annuity from Great American, then you are definitely in the right place. In fact, we dare say that this is the only place where you can get all of the information that you need for making a well-informed buying decision about this annuity.
We do want to also be perfectly clear here by stating that we do believe that annuities can be a good financial option for some people – provided that they fit in with your other short- and long-term financial strategies.
So, if you are ready to begin, let’s dive in!
Great American American Freedom Stars and Stripes 5 Annuity at a Glance
|Product Name||American Freedom Stars and Stripes 5 MYGA|
|Issuer||Great American Insurance Group|
|Type of Product||Multi-Year Guarantee Annuity|
|Phone Number||(800) 854-3649|
Opening Thoughts on the American Freedom Stars and Stripes 5 Annuity
Great American Insurance Group has a key focus on offering both fixed and fixed indexed annuities, and property and casualty insurance. The company actually traces its beginnings back to 1872, when William F. Heins launched the German American Insurance Company in New York, starting with roughly $1 million in start-up capital.
Throughout the years, the company has grown and expanded through increased product sales, as well as mergers and acquisitions. Today, Great American is a wholly owned subsidiary of American Financial Group, Inc. The company is considered to be strong and stable financially, and it has earned high ratings from the insurer rating agencies, including:
- A+ (Superior) from A.M. Best Company
- A+ from Standard & Poor’s
- A1 from Moody’s Investor Service
Over the past decade or so, annuities have become quite popular, due in large part to the constant ups and downs of the 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. Great American 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, contact us to obtain our free annuity report.
How Great American Describes the American Freedom Stars and Stripes 5 Annuity
According to Great American Insurance Group, the American Freedom Stars & Stripes 5 annuity offers growth, along with increasing rates. With this product, there is a base rate that will increase by 0.15% in years two through five.
The annuity also has several other features, such as a death benefit, along with both a terminal illness rider and an extended care rider, where 100% of the account value may be accessed when certain criteria have been met.
How a Financial 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 annuity is a mere 1%. So, while you won’t earn less than 1%, this is barely the rate of a simple savings account – but with the annuity, your money is essentially locked up for several years (or more).
So, even an annual rate increase of 0.15% won’t get you too far after the fifth year of the term. And, while the small print states that “the increasing interest rate will never be below 0.01%,” when you run the numbers here, this rate will provide you with a whopping $1 increase for every $10,000 that you have invested.
At the end of a multi-year term, if a new term that is longer than one year is available, you will have the option to renew your contract for one-year terms or begin a multi-year term again (which could again lock up your money for a set period of time).
With this in mind, it is essential to consider the purchase of this (or any) annuity as a long term financial endeavor, which could have some costly consequences if you want or need to take out more than 10% of the contract value during the surrender period.
What About Fees on the American Freedom Stars and Stripes 5 Annuity
You would have to go far and wide to find any financial product that doesn’t have at least some sort of fee or charges involved. The American Freedom Stars and Stripes 5 MYGA annuity from Great American is no exception.
With this product, you will find that there are added fees charged for the Terminal Illness and the Extended Care Waiver riders. Also, as with most other annuities, there will be a surrender charge incurred if you withdraw more than 10% of the contract value within the first 5 years of each term – starting at 9%.
The Annuity Gator’s End Take on the Great American Insurance Group’s American Freedom Stars and Stripes 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 Stars and Stripes 5 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 years of each term
- Do not plan to use the lifetime income feature on the annuity
There are many different factors that need to 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 often time 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 Stars and Stripes 5 from Great American Insurance Group, you can 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 Great American American Freedom Stars and Stripes 5 annuity is right for you is to have it tested. We can do that for you, and provide you with a spreadsheet that is based upon your specific situation. If you would like to run these numbers, just simply let us know by contacting us through our secure online form here.
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 market place. 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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