What’s Covered In This Review
In this review, we’ll cover the following information on the Royal Neighbors of America Royal Choice 5 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 have been considering moving forward with the purchase of annuity because you want to assure yourself of an income stream in retirement, while also keeping a large percentage of your retirement nest egg safe, then the Royal Neighbors of America Royal Choice 5 Fixed Annuity could be a viable alternative for you. One reason for this is because this annuity offers you the opportunity to obtain nice, steady returns, while also providing you the ability to have an ongoing income in retirement.
However, before you rush into purchasing this, or any other annuity, it can be extremely beneficial if you have a deeper understanding of how exactly the product works – as well as how it may or may not fit into your overall financial picture.
Over the past several years, annuities have become much more popular with those who are planning for retirement. This is primarily due to annuities’ guaranteed income feature. Due in large part to this increased popularity of – and in turn, demand for – annuities, there are many more insurance and financial professionals who are offering them. This, however, may not necessarily be a good thing.
While most financial and insurance professionals work hard to do the right thing for their clients, they may not always be able to offer you all of the key details about annuities that you need in order to make a well-informed purchasing decision.
Yet, having a good grasp on both the good and the bad aspects of annuities is necessary for determining whether or not an annuity is really right for you – and if so, which type of annuity may serve you best.
Annuity and Retirement Income Planning Information You Can Trust
If this is your very first visit here to our website, we would personally like to welcome you to AnnuityGator.com. We are a team of experienced financial professionals who are dedicated to offering in-depth, and unbiased, annuity reviews. We’ve been doing this for many years – much longer than our competitors – so we have become a trusted source of annuity information.
Due in large part to our success, there are a fair number of copycat websites that have popped up over the years. And, if you take a close look at these sites, you may
find that they are just simply citing basic annuity information in return for your name and email address.
For those who have been looking for more information about annuities on the Internet, it is possible that you’ve come across some conflicting details about these products. This is not altogether surprising, as there are a myriad of different annuities out there – and there are just as many, if not more, conflicting opinions about them.
It is possible that you may also have attended a seminar where you were offered a free lunch or dinner by the presenter in return for him or her discussing a particular annuity. In fact, because of attending that event, you may even have inadvertently landed here on our website in search of more in-depth details.
While there are many good websites online that are devoted to marketing their annuity offerings, some of these sites can have a way of luring visitors in so that you will provide them with your contact information. In fact, some of these annuity-related sites may even tout some pretty steep claims about their annuities like:
- Lowest fees
- Highest income payouts
- Top Rated Companies
- Quick Quotes
- Guaranteed Lifetime Income
Although these claims may initially sound just great, before you dive in and purchase an annuity, it is critical that you determine whether or not these claims are really true – just as you would do before purchasing any other high-ticket product or service. In doing so, though, you may find yourself swimming in a vast array of annuity “fine print” – which in turn, might make your quest for information even more cumbersome.
But if you really want to learn more about the Royal neighbors of America’s Royal Choice 5 Fixed Annuity, then you are certainly in the right place. In fact, dare we say that our website is the only place on the Internet where you will be able to find all of the information that you need regarding this annuity – and this includes not just the rosy advantages, but also the possible drawbacks. By offering all of this key information, though, you will be in a better position to determine whether or not this annuity will be right for you.
In many cases, when an insurance or financial representative is discussing fixed annuities with their clients, they will provide a plethora of information regarding how the annuity may perform, along with the other positive factors. However, they may end up leaving out some – or all – of the potential considerations that a person should know before buying an annuity.
If you’ve been considering the purchase of the Royal Neighbors of America Royal Choice 5 Fixed Annuity, you need to know just exactly what it is that you may be getting into, as well as the reasons why you are going with this annuity over a long list of other possible candidates.
In order to be completely clear here, there are many benefits that you can get through an annuity. But this is really only the case if that annuity fits well with your overall financial plan, and that it helps you in reaching your ultimate retirement goals.
This annuity review is here to assist you with getting a more in-depth understanding of the “fine print” regarding the Royal Choice 5 annuity from Royal Neighbors of America. So, if you are ready to get started, let’s go ahead and dive in!
Royal Neighbors of America Royal Choice 5 Fixed Annuity
|Product Name||Royal Choice 5 Fixed Annuity|
|Issuer||Royal Neighbors of America|
|Type of Product||Fixed Annuity|
|A.M. Best Rating||A- (Excellent)|
|Phone Number||(800) 627-4762|
Opening Thoughts on the Royal Neighbors of America Royal Choice 5 Fixed Annuity
Royal Neighbors of America has been in the business of helping clients to grow and protect their wealth for more than 120 years. The company was founded by nine women back in 1895, before women were able to vote, and at a time when many people felt that women were not insurable.
Throughout the years, the company has grown and expanded, and is today considered a key contender in the insurance and annuity arena. Royal neighbors offers many different types of annuity products, including single and flexible premium options, both immediate and deferred.
The company today remains a fraternal benefit society, which helps it to unite individuals through a common bond, allowing them the ability to secure their families’ financial security. As of mid-2017, Royal Neighbors of America holds in excess of $979 million in assets under management, with a surplus of just under $190 million. The company’s A- rating from A.M. Best is the fourth highest out of a possible 15 for overall financial strength, and the ability to meet its ongoing obligations to its customers.
Over the past decade or so – and particularly since the economic recession of 2008 – the stock market in the U.S. has been extremely volatile. Because of this, annuities have become much more popular – with fixed being particularly attractive due to the safety of principal that they can offer, while at the same time keeping your principal safe, regardless of what is occurring in the stock market.
But, while this “best of two worlds” scenario can initially seem appealing, these benefits can also come at a cost. So, before you move forward with the purchase of an annuity, be sure that you check out all of the details as, once you have purchased an annuity, it could be quite an ordeal to get yourself out of it.
Before getting into the nitty 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. Royal Neighbors of America 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 additional information on how to compare fixed annuities so that you can decide which may be the best on for you, click here in order to obtain our free annuity report.
How Royal Neighbors of America Describes the Royal Choice 5 Annuity
The Choice 5 annuity from Royal Neighbors of America is described as a single premium deferred annuity that allows you to earn interest tax-deferred until maturity. The guaranteed interest in this annuity would be for a 5-year period. Then, after the initial guaranteed interest rate period is over, you would get an interest rate that is guaranteed not to fall below a minimum amount.
The interest is credited and compounded on a daily basis. The rate is actually established on the issue date of the annuity, and it won’t change during the life of the annuity.
There is also a death benefit feature whereby if the annuitant / owner dies, a named beneficiary would receive the remaining amount of the annuity contract – minus any fees – if there are any funds that have not yet been received via an income stream.
How a Financial Advisor Might “Pitch” This Annuity
With its focus being on safety and guarantees, it is likely that if you’ve been presented this annuity by an insurance or financial representative, that he or she placed a fairly high focus on the principal protection aspect, as well as the minimum interest rate guarantee.
These features are certainly all well and good. However, there’s the rest of the story, too, that a commissioned sales rep may leave out of the discussion. For instance, in order to provide safety of principal, there generally need to be some tradeoffs. In this case, it is in the form of a low return.
While a guaranteed rate of interest may be appealing, though, once the interest rate guarantee has expired, you can run the risk of having the interest rate drop (albeit not below a certain guaranteed minimum – which is typically quite low). In other words, the rate could drop from your initial guaranteed rate.
So, the reality is that, unless you are truly convinced that this is the annuity for you, it could be that you’ll be locking up a substantial amount of money and only receiving a rate that is in line with that of a CD or money market account. With that in mind, it is possible that there is something better out there – especially if you are looking for principal protection and the opportunity to earn a higher return.
Before making a decision, it can be he helpful if you first run the numbers, based upon your particular financial needs and situation. We can help you to do this via our fixed annuity calculator. Once you have done this, you can review the actual figures as they pertain to your financial situation, as versus just a hypothetical scenario.
In addition, we can also assist you with any of the questions that you may have about this annuity (as sometimes the written materials can be a bit dry). We believe that knowing everything possible about an annuity before purchasing it is the only way to truly feel comfortable – and to avoid an expensive mistake if it turns out that the annuity is not right for you.
Are There Any Fees on the Royal Neighbors of America Royal Choice 5 Annuity?
If you look far and wide, you aren’t likely to find any financial product that does not have at least some type of fee associated with it. In fact, even the products that tout “no fees” are oftentimes actually charging you at least some amount over time. As the saying goes, “There is no such thing as a free lunch…or a free annuity!” The Royal Neighbors of America Royal Choice 5 fixed annuity is no different.
Here you can be hit with ongoing annual administration fees. And, if you want to take out more than 10% of your contract value in any given year, you could also be hit with a surrender charge on the excess amount. (And, if you are under age 59 1/2, keep in mind that there could also be an additional 10% early withdrawal penalty from Uncle Sam).
The surrender charges on the Royal Neighbors of America Royal Choice 5 annuity are as follows:
|Withdrawal Charge %||8.5||7.5||7||6||4||0|
The Annuity Gator’s End Take on the Royal Neighbors of America Royal Choice 5 Fixed Annuity
Where it works best:
- Safety of principal
- Guaranteed lifetime income in retirement
- Guaranteed rate protection – at least for a short time after purchasing the annuity
Where it works worst:
- If you are seeking a long-term rate guarantee
- If you are looking for a higher return
- If you do not intend on using the lifetime income feature
If order to really get an idea of what the best annuity options are for you, feel free to download our free annuity report here.
If you have been considering the purchase of a fixed annuity but you are still not completely convinced that it is the right thing for you, it is essential that you have a good understanding of where the product may shine, and where it may fall short.
In any case, though, an annuity should always be considered as a long-term financial endeavor – as there are typically surrender charges if you want to get out. In the case of the Royal Neighbors of America Royal Choice 5, you would have to hang on to the annuity for 6 years after purchase in order to get out without a penalty.
On the other hand, if you do find that a fixed annuity is the right move for you, you will be able to obtain principal protection, and a minimum amount of guaranteed return each year, for as long as you have the annuity.
So, if you have any questions about whether or not this annuity would fit into your financial plan – or, even if you just have a general question about annuities and how they work – please feel free to contact us. Our annuity geek team will be happy to help.
Need Additional Info? Did You See Any Mistakes?
We realize that this annuity review was a tad bit on the long side – and for that, we thank you for sticking with us. But we would much rather provide too much detail on an annuity than not enough. So, if you felt that this annuity review was helpful, then please feel free to forward it on to anyone else that you think may benefit from it, too.
Also, as humans will often do, we also understand that information about annuities can change quickly. Therefore, if you happened to notice any details in this review that were out of date or that need correction, please let us know that as well, and we will get it fixed quickly.
Any other annuities that you would like to know about?
If so, just let us know via our secure online contact form here and we’ll get our team of annuity geeks on the case. Also, if you would like to dig a bit deeper with knowing whether or not the Royal Neighbors Choice 5 annuity is a good option for you, we’d be happy to help by running the calculations for you so that you can review the spreadsheet based on your specific situation.
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