Independent Review of the Horace Mann Life Expanding Horizon 5 Fixed Annuity
What’s Covered In This Review
In this review, we will cover the following information on the Horace Mann Life Expanding Horizon 5 fixed annuity:
- Product Type
- Current Rates
- Realistic long-term investment expectations
- How it is used
- How it is most poorly used
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The Horace Mann Life Expanding Horizon 5 fixed annuity provides many nice features that retirees today may be seeking, such as guaranteed income and protection of principal. Many of these benefits are even built directly into the annuity product itself. But, before moving forward with the purchase of this, or any, annuity, it is a good idea to have a thorough understanding of how the vehicle works, as well as how it can fit into your overall financial situation.
Over the past several years, annuities have become much more popular as a way for people to ensure guaranteed lifetime income. This is largely due to the disappearing pension plan that was once a common offering by companies and corporations. An annuity can make it easy for investors to just roll funds from a 401(k) or IRA account and continue to let them grow, while at the same time setting up a plan for ongoing income in the future. But, while having this strategy can be reassuring, it is also extremely important to understand that owning an annuity is a long-term commitment – and it is oftentimes one that can come with a surrender period of many years. This means that, after you have made the decision to purchase an annuity, it can be difficult to change your mind without having to pay a large penalty.
Really knowing what you are getting into with an annuity can be difficult. This is because annuities can be confusing. There is often a lot of small print that is associated with these financial vehicles – even with fixed annuities, which typically offer the least amount of moving parts.
But what can often times add the most amount of confusion actually has less to do with the annuity products themselves, but rather the way in which they are sold to consumers. This is where we come in.
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If you’ve been looking for information on annuities online – or even if you have just simply heard family and friends discussing annuities – it is likely that you may have encountered some conflicting details about them. This is not uncommon, as there can be a lot of confusing information about annuities out there. Plus, even some reputable websites that are devoted to marketing their own annuities do a very good job of grabbing your attention, with the primary purpose of obtaining your contact information by making claims like:
- Guaranteed Income For Life
- Lowest Fees
- Highest Payouts
- Top Rated A+ Companies
- Get Your Quote Now!
Sure, these claims may sound great – but are any of them really true? If you want to find out, then you are in the right place – and we dare say, you are likely in the only place – where you can actually find out if that’s so.
Insurance sales professionals who are offering annuities today will usually do all that they can to paint a “rosy” picture of just how safe and secure these products are. But, what they neglect to say is that there are also still a few drawbacks to owning this type of financial product – and this means that you will need to be aware of all of the potential angles prior to plunking down your hard-earned retirement savings.
This is not to say that what these sales people are trying to offer you is bad. However, it does mean that as you inch closer to your retirement years – and, as you are considering just exactly what you will be doing with your retirement funds – it is necessary that you know exactly what you are buying with these savings, as well as why you are buying it. This annuity review is here to help you with better understanding all of the “fine print” so that you will have more in depth knowledge regarding whether or not this annuity may be able to help you with achieving your financial goals in retirement.
So, if you are ready to begin, then let’s dive in!
Horace Mann Life Expanding 5 Fixed Annuity at a Glance
|Product Name||Horace Mann Life Expanding 5 Fixed Annuity|
|Type of Product||Fixed Annuity|
|Standard & Poor's||A|
|Phone Number||(800) 999-1030|
Opening Thoughts on the Horace Mann Life Expanding Horizon 5 Fixed Annuity
Horace Mann has been in the business of offering insurance and investment products since 1945. The company has a primary focus on providing affordable financial and protection products to educators. In addition to just insurance and wealth building vehicles, the company provides free workshops on financial literacy and other topics of importance to educators – including student loan relief. The company is considered to be strong and stable from a financial standpoint, which is reflected in its ratings. It has been provided with an A from A.M. Best, and an A from Standard & Poor’s. It also has an A3 from Moody’s and an A from Fitch. This is a positive, as an annuity is really only as strong as the claims paying ability of the underlying insurance carrier that offers it.
The great demand for annuities – which are always backed by insurance companies – has been growing ever since market volatility has become the “norm” rather than the exception. Today, in fact, one of the greatest fears on the minds of retirees is running out of money, and because of that, they are seeking a safe place to put their savings, where they can also earn at least some amount of return – while at the same time ensuring the protection of their principal. A fixed annuity can provide all of these components.
However, due to the fact that we have been living in a world of historically low-interest rates over the past decade or so, the returns that have been offered by fixed annuities may be considered by many to be a tad low. In addition, because most fixed annuities will also impose a surrender charge of several years where there is a large penalty for withdrawing your principal, changing your mind about an annuity really isn’t a good idea if a better option comes along in the future. In the case of the Horace Mann Life Expanding Horizon 5 fixed annuity, there are 5 years of surrender charges. And, while this may not seem like a lot – these surrender charges are scaled on a “rolling basis.” This means that each premium that you deposit into this annuity has its own 5-year surrender charge scale.
In addition, while the rate of return is guaranteed on a fixed annuity, this rate is currently below 1.5%. So, when considering a fixed annuity, you need to ask yourself just how long you want to lock up your money for the return that you will be getting.
Before getting into the gritty details, here are some legal disclosures…
This is an independent product review, and it is not to be considered as a recommendation to purchase or to sell an annuity. Horace Mann Life Insurance Company has not endorsed this review in any way, nor do we receive any compensation for offering 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 the negatives of this particular annuity product. Prior to purchasing any insurance or investment product, you should be sure to do your own due diligence and consult a properly licensed professional if you 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.
How Horace Mann Describes the Expanding Horizon 5 Fixed Annuity
In their online information, Horace Mann describes the Expanding Horizon 5 fixed annuity product as follows:
- Flexible premium fixed annuity
- Premium bonus of 2% during the first contract year
- Numerous income payout options, including guaranteed lifetime income
There are additional perks, including a bonus credit, which may be added to this annuity. For additional information about the Expanding Horizons fixed annuity, you can click HERE.
How Financial Advisors Might “Pitch” This Annuity
As an educated consumer, you may have already noticed that the insurance and financial services companies tend to do a great job of making their products sound very enticing. For example, you may have read over those bullet points above and thought that the annuity being reviewed is the ideal place to put your retirement funds. And, if you are making the decision to purchase this annuity under the guidance of an insurance sales person who will make a tidy commission or fee from the sale of the annuity, then you may even hear about the annuity in a brighter light.
When dealing with fixed annuities, here are some of the key concepts that you are likely to hear sales agents talk about when explaining them:
- Guaranteed return of the premium
- Guaranteed interest rates
- Income for life in retirement
Let’s first take a look at the return of premium guarantee, though. While it is true that you can get your premium back with this annuity, during the surrender period, you will only be able to get 10% of the account value out without incurring a surrender penalty. If you withdraw more, the annuity’s surrender charges will kick in.
This annuity also promises guaranteed interest rates. However, so do CDs – which over the past decade or so have painfully low. So in this case, just as if you were to lock away a large chunk of money in a long-term Certificate of Deposit, you have to ask yourself what type of trade off do you want to make in terms of a low-interest rate in return for the guarantee.
This annuity also offers guaranteed income for life in retirement. While this can be a very reassuring feature, there are also thousands of other annuities that also offer this same exact same benefit.
Here’s the bottom line: Although there are definitely some nice features that are offered on the Expanding Horizon 5 fixed annuity, once you have locked up your retirement funds, it can be too late to change your mind if a better alternative comes along in the future. So, if you are still wondering – even just a little bit – whether or not this particular annuity is the right one for you, or even if you just simply have some additional questions and you need some help, then just reach out to us via our secure contact form here.
While looking at the different features and benefits in fixed annuities can be confusing at first, it is important to do so in order to determine which annuity will be right for you. In order to obtain our free report on how to better understand annuities, <Click Here>.
What About the Horace Mann Life Expanding Horizon 5 Fixed Annuity’s Fees?
When purchasing an annuity, it is essential to have a good understanding of any and all of the fees that could be involved. This is because these can have an effect on your overall return. The expenses and fees that are involved with a fixed annuity will generally include administrative fees, the cost of covering the annuity’s guaranteed income, and the cost of the sales agent’s commission. There may also be some fixed annuities that charge an annual contract fee. This will usually run in the range of $30.
In the case of the Horace Mann Life Expanding Horizon 5 fixed annuity, this has a “rolling” 5-year surrender charge scale. This means that each premium has its own 5-year scale. These surrender charges are as follows:
- Year 1 – 8%
- Year 2 – 7.5%
- Year 3 – 7%
- Year 4 – 6%
- Year 5 – 5%
- Year 6 – 0%
All of the surrender charges will end at the tenth anniversary of the annuity contract.
The Annuity Gator’s End Take on the Horace Mann Life Expanding Horizon 5 Fixed Annuity
Where it works best:
This particular annuity will tend to work the best for those who are seeking:
- Safety of principal
- Minimum rate of return
- Guaranteed lifetime income in retirement
Where it works worst:
- For people who need access to their money right away
- For people who are seeking a high return
- For people who have a high-risk tolerance
- For people who do not intend to use the guaranteed lifetime income feature
Overall, an annuity should really be considered a long-term endeavor – and because of that, these financial vehicles should appeal more to those who need retirement income in the future and who are working to build up as much as they possibly can in the account so that they can generate a high amount of income. Unfortunately, even though this particular annuity does provide some nice features such as protection of principal, because of its low rate of return, it does tend to fall a little short – especially compared to some of the other options that are available in the market today.
If you are wondering, then if this particular annuity is the right one for you, or if you have any questions and you need some additional help getting pointed in the right direction, then just reach out to us through our secure contact form here.
Have Any Questions on the Horace Mann Life Expanding Horizon 5 Fixed Annuity? See Any Mistakes?
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