Independent Review of the Jackson National Life Action Fixed Annuity
What’s Covered In This Review
In this review we’ll cover the following information on the Jackson National Life Action 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 Jackson National Life Action fixed annuity offers a number of nice benefits that retirees today may be seeking such as guarantees and principal protection. Many of these are actually built directly into the annuity itself. However, prior to moving forward with purchasing this annuity, it is important to have a good understanding of how the product works, and how it may – or may not – fit into your overall financial situation once you have a more thorough idea of its inner workings.
Annuities have been becoming more popular today as a way to ensure guaranteed lifetime income. This is due in large part to the fast disappearance of traditional pension plan offerings from employers. An annuity can make it easy for investors to simply roll funds from an IRA or a 401(k) plan and continue to let it grow, while at the same time set it up for eventual ongoing income in the future. Yet, while this can be reassuring, it is also essential to understand that an annuity is a long-term commitment that can often time have a surrender period of many years. This means that, once you have made your decision to purchase an annuity, it can be difficult to change your mind without paying a hefty penalty.
Truly knowing what you are getting into with an annuity can be difficult because these products tend to be confusing. There can be a lot of “small print” with these financial vehicles – even with fixed annuities, which offer the least amount of moving parts.
What can often add the most amount of confusion actually has less to do with annuities themselves, but rather is the way in which these products are sold to consumers. This is where we come in.
Annuity And Retirement Income Planning Information That You Can Trust
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If you have been seeking out information on annuities online, or even if you have heard friends and family discussing these products, it is likely that you have encountered some conflicting information about them. This is easy, as there is a lot of confusing information about annuities out there. In addition, even some very reputable websites that are devoted to marketing their annuities do a great job of grabbing your attention so that they can obtain your contact information by making claims like:
- Guaranteed Income For Life
- Highest Payouts
- Lowest Fees
- Top Rated A+ Companies
- Get Your Quote Now!
Sure, these do sound great – but are any of these claims really true? If you want to find out, then you’ve come to the right place – and we dare say, likely the only place – where you can actually find out if that’s so.
Insurance sales people who are offering annuities will typically do their very best to provide a rosy picture of how safe these products are. But, what they will often neglect to say is that there are also still some drawbacks to owning fixed annuities, too – so this means that you need to know all of the potential angles prior to putting down your hard earned retirement dollars into one.
This isn’t to say that what these agents are trying to sell you is a bad thing. But, what it does mean is that as you approach retirement, and as you determine what you should do with the money you have saved up over the years, you should know and understand exactly what you are purchasing with it – and why. This annuity review is here to help you in decoding all of that “fine print” so that you will have a more thorough knowledge of whether this particular annuity may help you to achieve your financial goals.
So, if you are ready to begin, let’s go ahead and dive on in!
Jackson National Life Action Annuity at a Glance
|Product Name||Jackson National Life Action|
|Type of Product||Fixed Annuity|
|Standard & Poor's Rating||AA|
|Phone Number||(877) 565-2968|
Opening Thoughts on the Jackson National Life Action Fixed Annuity
Jackson National Life Insurance Company (or “Jackson”) opened its doors for business back in 1961 as a small, family-owned company. Throughout the years, it has evolved into a successful, multi-billion dollar insurance and financial services organization. In fact, in just the first two decades, the company more than tripled its annuity sales from $50 million to $162 million, and by 1987, it had surpassed the $1 billion mark. Just two years later, sales had exceeded $2 billion. By 2012, Jackson National had in excess of 4 million policies on its books – and the company continues to grow today. In 2015, Jackson National was ranked as the #1 seller of annuities in the United States, based on LIMRA / Secure Retirement Institute statistics. And, based on its total statutory assets, Jackson is the 8th largest U.S. life insurance company.
Because of its strong financial position, the company has been given excellent ratings by all of the insurer rating agencies, including an A+ from A.M. Best and an AA from Standard & Poor’s. This can be a very positive factor, as an annuity is really only as strong as the claims paying ability of its underlying insurance carrier.
The demand for annuities, which are always backed by insurance companies, has been increasing steadily since market volatility has become the “norm” rather than the exception over the past decade or so.
Today, the biggest fear on the minds of many retirees is running out of money – and because of that, these individuals and couples are seeking a safe place to put their savings where they can also earn a return, while at the same time keeping it safe. A fixed annuity can offer that solution.
But, because of the historically low-interest rate environment that we have also been living in today, the return that is oftentimes provided by fixed annuities may not be enough. Plus, because most annuities will impose a surrender charge for many years where there is a hefty penalty for withdrawing the principal, changing your mind about an annuity if a better option comes along, later on, won’t be a viable alternative.
Before we get into the gritty details, here are some important legal disclosures…
This is an independent product review, and it is not to be considered as a recommendation to either purchase or sell an annuity. Jackson National Life Insurance Company has not endorsed this review in any way, nor do we receive any compensation for providing this review. This annuity review is solely meant to be an independent review at the request of readers so that they may see our perspective when breaking down the potential positives and negatives of this particular annuity product. Before purchasing any type of 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 situation. All names, marks, and materials that were used for this review are the property of their respective owners.
How Jackson National Describes The Action Fixed Annuity
In their product literature, Jackson National Life Insurance company describes the Action One and the Action Two fixed annuity products as follows:
- Competitive interest rates
- Your choice of interest rate guarantee periods
- Options for guaranteed retirement income – including income for life
There are some additional “perks”, such as an accelerated benefit if you suffer from a qualified medical condition and a death benefit. However, these cover the key highlights. For additional, more in-depth information, you can view the company’s online brochures by clicking HERE and HERE.
How Financial Advisors Might “Pitch” This Annuity
If you’ve been educating yourself about annuities lately, then you may have noticed that insurance and financial companies do a very good job of making their products sound enticing. For example, you might have read over that list of bullet points above and thought that the Jackson National Life Action fixed annuity is the perfect place to put your retirement funds. And, if you are making the decision to purchase this particular annuity product under the guidance of an insurance sales person who will earn a nice sized commission or a fee from the sale of the annuity, then it is possible that you might hear this annuity explained in an even brighter light.
When you are dealing with fixed annuity products, some of the key concepts that you will often times hear insurance sales agents talking about when explaining them include the following:
- Interest rate guarantee
- Interest rate bonuses
- Guaranteed retirement income for life
But let’s take a closer look at some of these concepts, because even though they can sound great up front, once you delve a bit deeper into the fine print, you may realize that there are a few tradeoffs. For instance first, while there is an interest rate guarantee on the Jackson National Action One fixed annuity, you will find that the rate is not all that competitive. In fact, according to the company’s Action One literature, “If you elect the 3-year or 5-year guarantee period, the rate credited to your contract will be lower than if the extended guaranteed period had not been selected.”
Next, the Jackson National Life Action One and Action Two fixed annuities offer first-year interest rate bonuses. Based on the company’s brochure, these are provided to help in boosting your annuity’s accumulated value over the years. But, if you refer to the “fine print”, you will again find that “As a result of the product’s first-year bonus, rates in subsequent years will be lower.” So, is this really a good deal?
As far as the guaranteed retirement income for life – well, that can be a nice feature, but it is one that can be found on most any annuity. So, while it can be reassuring, if there is a product that can offer you the opportunity for higher return, along with the safety of principal AND guaranteed lifetime income, it may be worth a second look.
So, here’s the bottom line: While there are certainly some features of this particular annuity that are appealing after you’ve locked up your funds, it can be too late to change your mind if a better option were to come along. Therefore, if you are still wondering – even a little bit – if this annuity is really the right one for you, or if you have any additional questions and you need more help with it, then just simply reach out to us via our secure contact form here.
We understand that deciding on which annuity is the right one can be difficult. But knowing what to look for is essential, as the purchase of an annuity is a long-term endeavor. To download our free report on what to look for in an annuity, click here.
What About the Jackson National Life Action Fixed Annuity’s Fees?
Along with all the features and benefits of an annuity, it is also important to have a thorough understanding of what type of fees are involved before moving forward. When dealing with a fixed annuity, the fees and expenses that are typically involved can generally include administrative charges, the cost of the guaranteed income, and the sales agent’s commission. Also, you may be charged an annual contract fee that is in the neighborhood of $30 per year. As with other types of annuities, a fixed annuity will usually also have surrender charges if you withdraw your funds within the first several years of contract ownership.
In the case of the Jackson National Life Action Fixed Annuity, both the Action One and the Action Two have 8 years of surrender charges. These kick in immediately at 8.25%, and they gradually grade down as follows:
- Year 1 – 7.25%
- Year 2 – 6.50%
- Year 3 – 5.50%
- Year 4 – 4.50%
- Year 5 – 3.75%
- Year 6 – 2.75%
- Year 7 – 1.75%
- Year 8 – 0.75%
- Year 9 – 0%
The Annuity Gator’s End Take on the Jackson National Life Action Fixed Annuity
Where it works best:
This annuity will generally work the best for those who are looking for:
- Safety of principal
- Slow but steady growth over time
- Guaranteed income in retirement
Where it works the worst:
- For people who need access to their money in the early years
- For people who are seeking the opportunity for a high return
- For people who have a higher risk tolerance
- For people who are not seeking long-term or lifetime retirement income
Comparing the benefits on annuities can seem difficult. But we make it much more simple to understand, once you know how. In order to download our free report on what to look for in an annuity, just click here.
Overall, annuities should always be considered as a long-term endeavor – and because of that, these vehicles will generally be more appealing to those who are seeking retirement income in the future and also to those who may be working to build up as much as possible in order to generate that future income stream. While this particular annuity does provide some nice features such as the protection of principal, due to the low rate of return, it may fall short – especially in comparison to some of the other alternatives that are available right now.
If you are wondering, then, whether or not this annuity is the right one for you, or if you still have any questions and you need some additional assistance with getting pointed in the right direction, they just simply reach out to us through our secure contact form right here.
Have Questions on the Jackson National Life Action Fixed Annuity? See Any Mistakes?
Thank you for bearing with us on this annuity review. If you found it to be helpful, then please feel free to spread the word and share it with others as they, too, may also find the information in it to be useful.
On the last note, as humans will sometimes do, we all tend to make some mistakes. So, if you happened to notice any while you were going through this annuity review, then please let us know. We are always more than happy to make any corrections and to give credit where credit is due. If you are an investor and this review causes you any confusion and/or if it creates any additional questions, then please reach out to us as well. While we are not always able to get back with you right away, we can usually clear up any questions within a day or two.
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