What Will Be Covered in this Review?
In this review, we will be discussing the following information regarding the Principal Select Series Deferred Fixed 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 considering the purchase of an annuity 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 purchasing the Principal Select Series Deferred Fixed Annuity could be a great way to accomplish that.
That’s because this annuity allows you to avoid market ups and downs, and also offers a fixed interest rate for a set period of time. In addition, when the time comes to convert the annuity over into an income stream, that income can last throughout the remainder of your lifetime, regardless of how long that may be.
However, before you go out an purchase the Principal Select Series Deferred Fixed Annuity – or any annuity, for that matter – it is important that you first have a thorough understanding of the benefits that it may provide, as well as any possible drawbacks, as annuities can be very difficult to get out of once you get in.
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, due in large part to this increased 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 can be the case 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 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.
If you’ve been seeking information about annuities online, 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
However, even though these claims might sound highly enticing, this makes it all the more important to know whether or not these claims are true. This is where our website can help. In fact, if you have come here in search of more in-depth details on the Principal Select Series Deferred Fixed Annuity, then you are definitely in the right spot.
We can even state with a high degree of certainty that the website you are on right now 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 Principal Select Series Deferred Fixed Annuity at a Glance
|Product Name||Select Series Deferred Fixed Annuity|
|Type of Product||Deferred Fixed Annuity|
|S&P Rating||A+ (Strong)|
|Phone Number||(800) 986-3343|
Opening Thoughts on the Principal Select Series Deferred Fixed Annuity
The Principal Financial Group (often simply referred to as The Principal) is a global financial investment management leader that is headquartered in Des Moines, Iowa. Founded in the late 1800s as an insurance company, The Principal has grown and expanded exponentially over the years.
As a member of the Fortune 500, Principal (as of the third quarter of 2017) holds approximately $655 billion in total assets under management, and has brought in roughly $1.8 billion in net income as of September 30, 2017.
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.
Plus, over time, the prices of the goods and services you need to buy will also likely continue to rise. So, having a larger amount of income in the future will also be a requirement – at least if you want to continue your present lifestyle.
A deferred income annuity can certainly help you to solve these concerns. However, it is also important to note that not all of these products are exactly the same. That’s why it can be extremely beneficial to do some research on the annuity itself, as well as the company that’s offering it before you commit what will likely be a significant sum of your retirement savings.
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. The Principal 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 The Principal Describes the Select Series Deferred Fixed Annuity
The Principal describes the Select Series Annuity as a product that can help you to save for retirement, as well as to balance your portfolio and/or generate a future stream of income, but without worries about stock market volatility.
This product is a single premium deferred annuity with a market value adjustment (MVA), as well as several different interest rate guarantee periods – including three years, four years, six years, or nine years.
At the end of the guarantee period (which also corresponds to the surrender period), the interest rate will be determined annually, and the MVA and surrender charges will end. If you opt not to keep the annuity going forward, then you are allowed to take the value of the account without paying any surrender or MVA charges.
This annuity has a minimum premium of just $5,000 – and a maximum of $2 million (without home office approval), up to $5 million with home office approval. And, based on how much is contributed to the annuity during the first year, a premium credit may be an issue.
There are some other features on the Principal Select Series Deferred Fixed Annuity, such as a waiver of the surrender charges for a qualified nursing home stay, and/or terminal illness and/or qualifying disability. There is also a death benefit whereby the accumulated value of the annuity will be paid out to the named beneficiary at the owner’s death.
For more in-depth details, you can take a look at the Principal Select Series Annuity product literature HERE.
How an Insurance or Financial Advisor Might “Pitch” this Annuity
Given that it can be rare to find long-term guarantees with many financial products, it may be that if you’ve been presented this annuity by an insurance or financial advisor, he or she likely keyed in on the interest rate guarantees.
In this case, there is the option to lock in a set rate of interest for three, four, six, or even nine full years – no matter what happens out in the marketplace, or even with interest rates overall. And, once the guarantee period ends, the surrender period ends, too.
But just like most other things in life, there is always another side to the story – and this is the case here with the Principal Select Series Deferred Annuity. First, the longer your interest rate guarantee, the longer your surrender period will be. This means that if you withdraw more than 10% of the contract value during the surrender period, you will be charged a fee for the withdrawal. (And, if you make such a withdrawal before you turn age 59 1/2, you can also incur an additional 10% “early withdrawal” penalty from the IRS).
Also, because we have been living in a historically low-interest rate environment for roughly the past ten years, even though your rate will be locked in, it is likely that you really won’t even meet – much less beat – inflation. Unfortunately, this is the “price” we often have to pay for safety – at least when it comes to financial products.
Fees Associated with the Select Series Deferred Fixed Annuity from The Principal
With regard to any fees associated with the Select Series Deferred Fixed Annuity from The Principal, there are no front-end or annual charges. But don’t let that lull you into believing that there are no fees at all.
Here, you will still run into surrender charges if you happen to withdraw more than 10% of the contract value during the surrender period – and, as previously discussed, the longer your interest rate guarantee period, the longer your surrender period will be.
Surrender Charge Schedule
|Year||3-Year Guarantee||4-Year Guarantee||6-Year Guarantee||9-Year Guarantee|
The Annuity Gator’s End Take on the Principal Select Series Deferred Fixed Annuity
Where it works the best:
- If you want to lock into a set interest rate (for a set period of time)
- If you want to ensure that your principal is safe
- If you plan to use the lifetime income feature
Where it works the worst:
- If you want the opportunity for a higher rate of return
- If you may need to withdraw funds from the annuity during the surrender period
- If you do not plan to use the lifetime income feature
There are many criteria that should be considered before you commit long-term to a product like an annuity. In the case of the Principal Select Series Deferred Fixed Annuity, these factors include the interest rate you’ll receive, the surrender period, and the opportunity (or lack thereof) to earn a higher rate of return on your money.
If you are still leaning towards buying this annuity, then you can be sure that your principal will be safe, and that you will be able to count on a guaranteed income stream in the future. (You may also be able to count on that for a loved one, as well, such as your spouse).
But even with all of these nice benefit, the Principal Select Series Deferred Fixed Annuity could still fall a bit short – and quite honestly, there may very well be a better alternative out there for you.
In any case, the only way to really know whether this annuity will perform well for you is to have it tested. We can do this for you and can provide you with the results – at no charge or obligation. If you are interested in taking a look at the potential performance of the Select Series Deferred Fixed Annuity from Principal, based on your specific criteria, then please contact us here through our secure online form.
Do You Have Any Additional Questions Regarding the Select Series Deferred Fixed Annuity from The Principal? Did You Happen to Notice Any Mistakes?
While we do understand that this review of the Principal Select Series Deferred Fixed Annuity went a bit on the long side, our feeling is that we would much rather provide you with “too much” detail than not enough. That’s because knowing all that there is to know is really the only way to make a well-informed purchasing decision.
So, if you did find this annuity review to be beneficial, then please feel free to forward it on and share it with anyone else who you feel would also find it advantageous. Conversely, if this review caused you to be more confused about this (or any) annuity, please let us know that, as well.
Any other annuities you’d like to have us review?
If so, great! There are many annuities that are available on the market today – so if there is one (or more) that you did not find in our annuity review database, and you want to know more about it, then just simply let us know and our team of annuity “geeks” will get right on it.
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