Independent Review of the Minnesota Life SecureOption Select Fixed Deferred Annuity
What Will Be Covered in this Annuity Review?
In this review, we will be discussing the following information regarding the Minnesota Life SecureOption Fixed Deferred 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 have been in the process of researching an annuity to purchase because you want to ensure that you won’t run out of income in the future – especially if you live a nice, long life – then the Minnesota Life SecureOption Select fixed deferred annuity could be a great way for you to accomplish that, without having to put your money at risk in the stock market.
But before you go full steam ahead with getting this annuity, it is highly recommended that you first have a much more in-depth idea about how the product works – as well as how it may (or may not) be aligned with your specific financial goals. Then, once you are much more familiar with it, you can feel more comfortable with either moving forward with a purchase, or passing on this annuity and moving on to one that is more beneficial to you.
As our life expectancy has gotten longer, deferred fixed annuities have become more popular. This is because these annuities can allow you to receive an ongoing stream of income far into the future – and that income can last for as long as you need it, regardless of how long that may be.
Over the past decade or so, fixed annuities have become much more popular with people who are retired, as well as those who are approaching that time in their lives, as they can help to alleviate the concern about running out of money in retirement.
But, because of this increase in demand, many insurance carriers have been introducing new products – and unfortunately, this can make a product that is already somewhat confusing even more so. This is actually true for well-informed consumers, as well as many insurance and financial advisors!
With that in mind, unless the advisor that you work with has a primary focus on selling annuity products, you really should do some additional research on these products, as they will oftentimes require that you deposit a large chunk of your savings into them.
That’s where the Annuity Gator can come in!
Annuity and Retirement Income Planning Information You Can Trust
If this is the first time you have been to our website, we would like to personally welcome you here to AnnuityGator.com. We are a team of experienced financial professionals who are dedicated to providing our website visitors with non-biased and in-depth reviews of annuity products.
We’ve been at this for a number of years now – far longer than most of our “copycat” competitors – and because of this, we have come to be known as a highly trusted source of annuity information online.
If you have been seeking information about annuities via the Internet, then it is likely that you have come across many conflicting details about these financial vehicles. This isn’t really very surprising, though, because there are a lot of opinions (both positive and otherwise) about these products floating around the Internet.
While there are a number of very good websites on the Internet that are focused on offering their annuity products, there are some that will attempt to lure you in with some pretty bold claims like:
- Lowest Fees
- Highest income payouts
- Guaranteed lifetime income
- Top-rated companies
But, even if these claims sound appealing to you, it is extremely important for you to find out whether or not they are really true. This is where our website can help. In fact, if you have come here in search of more in-depth details on the Minnesota Life SecureOption Select Fixed Deferred Annuity product, you are in the right place!
We dare say that our website is the only place where you can find out all of the information – the good, the bad, and yes, even the ugly. Knowing the whole picture, though, can help you in determining whether this product will be right for you.
Just to be clear here, we want to state for the record that there can be a long list of benefits that can be attained when you purchase an annuity – provided that the product fits in with your overall financial needs and goals.
That being said, if you are ready to start the review, let’s go ahead and dive in!
The Minnesota Life SecureOption Select Fixed Deferred Annuity at a Glance
|Product Name||SecureOption Select|
|Type of Product||Fixed Deferred Annuity|
|S&P Rating (Minnesota Life / Securian Life)||A+ (Strong)|
|Phone Number||(800) 362-3141|
Opening Thoughts on the Minnesota Life SecureOption Select Annuity
Minnesota Life Insurance Company has a long history of providing financial protection and security to its clients. Initially started back in the year 1880, this company offers its products in 49 of the 50 U.S. states (all except for New York). Its parent company, Securian Financial Group, is also the parent company of Securian Life Insurance Company.
Considered to be strong and stable financially, Minnesota Life and Securian have received high ratings from all of the major insurer rating agencies, including an A+ from A.M. Best, an A+ from Standard & Poor’s, an AA from Fitch Ratings, and an Aa3 from Moody’s Investors Service. Securian has also received a Comdex Ranking of 92 (out of a possible 100). This puts the parent company of Minnesota Life in the top 8% of companies that receive this rating.
Because so many people are living longer these days, it is essential to ensure that you have income during your early stages of retirement, as well as many years down the road. In fact, it’s not uncommon for people to live for 20, 30 or more years past their retirement date.
Before we get into the in-depth details, we have some legal disclosures to present…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Minnesota Life 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 our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners.
For more details on how to compare fixed annuities so that you can decide which may be the best one for you, click here in order to obtain our free annuity report.
How Minnesota Life Describes the SecureOption Select Fixed Deferred Annuity
According to Minnesota Life, the SecureOption Select annuity offers the following benefits:
- Protection for your principal against investment loss
- Guaranteed interest rate periods of up to nine years
- Tax-deferred growth
- Penalty-free access to part of your investment in an emergency
- Numerous retirement income options – including the option of turning your money into an income that is guaranteed for the rest of your lifetime
The SecureOption Select annuity offers you the ability to choose how long your initial interest rate is locked in. These guaranteed rate periods include five years, seven years, or nine years. Here, a guaranteed minimum interest rate is also in place for as long as you own the annuity.
If you contribute $100,000 or more to the SecureOption, you can get a higher interest rate. And, coupled with the tax-deferred compounding, your funds can grow exponentially over time. Because the SecureOption Select is a fixed annuity, your principal will be safe – regardless of what happens in the stock market.
Once your initial interest rate guarantee period has elapsed, you will have the option to either withdraw your money from the annuity, free of withdrawal charges, or you can alternatively allow the annuity to renew and receive an interest rate guarantee for another identical rate guarantee period.
To take a peek at the SecureOption product literature, go HERE.
How an Insurance or Financial Advisor May Pitch this Annuity to Clients or Prospects
Because knowing that income will be available long into the future, it is likely that an insurance or financial advisor who is offering this product to their clients will key in on that feature. In fact, research from various retirement industry groups has shown that Americans are highly concerned about having enough money saved to support a comfortable retirement lifestyle.
This fixed deferred annuity provides the ability to select from multiple guaranteed interest periods, and it also provides flexible renewal and withdrawal options to help with generating income in retirement.
But is locking in your money and an interest rate, really that good of an idea?
In fact, while many of the benefits that are offered on the Minnesota Life SecureOption Fixed Deferred Annuity may sound nice, it is also important that you have a good understanding of the “tradeoffs” that might be required in order to have access to such benefits.
For instance, because we in the U.S. have been stuck in a historically low-interest rate environment for roughly a decade, locking in to a painfully low rate right now could also have painful consequences later – namely the inability to keep pace with inflation, and the rising cost of the goods and services that you will need to purchase during retirement. Because of that, if you plan to use the income from this annuity as a primary staple of your incoming cash flow, you may have to eventually cut back on the purchases that you make down the road.
In addition, during the annuity’s accumulation period (i.e., before you convert it over to an income stream), it may feel comforting to lock into a guaranteed rate – however, the length of your rate guarantee correlates with the length of the annuity’s surrender period. So, for example, with a nine-year rate guarantee also comes a surrender period of nine years. And, if you renew for another guaranteed rate period, guess what – your surrender period also starts all over again!
Explain the Fees Associated with this Annuity
The possible fees that are associated with the SecureOption Select annuity from Minnesota Life are something that you need to be mindful of. That’s because they could end up eating away at a fairly sizeable chunk of your account value.
In this case, if you withdraw more than 10% of the annuity’s contract value during your surrender period, then you will incur a withdrawal charge – and the earlier you make a withdrawal during this surrender period, the more you will be penalized.
The length of the surrender period will differ, based on the interest rate guarantee period you have selected. So, for instance, going with the five-year rate guarantee will equate to a five year surrender period. Going with the longer, nine-year rate guarantee period, however, will equate to a nine-year surrender period. And, as previously mentioned, if you renew your interest rate guarantee period after your initial period has elapsed, then you will find yourself with a brand new surrender period, too.
SecureOption Select Withdrawal Charge Schedule
On top of the withdrawal charge, if you make such a withdrawal from the annuity before you have turned age 59 1/2, then you will also incur an additional penalty of 10% from the IRS.
The Annuity Gator’s End Take on the Minnesota Life SecureOption Select Fixed Deferred Annuity
Where it works best:
This annuity could be a good option for those who:
- Want to lock in a guaranteed interest rate
- Are seeking principal protection
- Are seeking a guaranteed income
Where it works the worst:
This annuity may not be a good option for those who:
- Want the opportunity for a higher return
- Need to keep their money liquid
- Do not plan to use the lifetime income feature
There are a number of key factors that should ideally be taken into consideration if you are thinking about purchasing an annuity. For example, when it comes to fixed rate annuities, it is important to keep in mind that you may not be able to keep your future purchasing power on pace with your expenses.
If you are considering the purchase of the Minnesota Life SecureOption Select Fixed Deferred Annuity, though, you can be assured that you can count on a certain amount of income for the remainder of your lifetime, as well as protection of your principal – no matter what happens in the stock market. You will also attain a minimum guaranteed rate of growth.
However, even with the nice guarantees that come with this annuity, it may still fall somewhat short – and quite frankly, there could be a better alternative out there for you. In any case, the only way to truly know how this annuity may perform, based upon your particular situation and needs, is to have it tested. We can do that for you by running the numbers through our annuity calculator, and can then provide you with a spreadsheet showing the results.
In order to receive this information, just simply contact us via our secure online contact form here.
Have Any Additional Questions? Did You Happen to Notice Any Mistakes in this Annuity Review?
We realize that this review of the Minnesota Life Secure Option annuity went a tad bit long. So, we thank you for sticking with us through to the end here. When creating our annuity reviews, though, we would much rather “err” on the side of being “too long” as versus not long enough.
Therefore, if you found that this annuity review was helpful, then please feel free to share it and to forward it on to anyone else that you think may benefit from it too. Alternatively, if this review led you to have even more questions, then please let us know that, as well.
Are there any other annuities that you would like to see reviewed?
There are lots of annuities available in the marketplace today. So, if you would like to see a particular annuity reviewed, then just let us know the name of the annuity (or annuities), and our team of annuity “geeks” will get on the case. So, be sure to check back soon for the new reviews.
The Annuity Gator