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Independent Review of the Kansas City Life Affinity Variable Annuity

What will be covered in this annuity review?

In this annuity review for the Kansas City Life Affinity Variable Annuity, we will be going over the following information:

  • Type of annuity
  • Fees
  • Current rates
  • Realistic long-term expectations
  • How the annuity is best used
  • How the annuity 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 worried about having enough income to last you through retirement, then it is possible that you’ve looked into purchasing an annuity. Not only can these financial vehicles provide you with an ongoing cash flow in the future, but depending on the type of annuity you choose, you can also attain tax-deferred growth in your account during the “accumulation period”.

But before you make a commitment to any annuity, it’s important that you have a good understanding of what the product will and won’t do for you. Annuities can be complicated – especially some of the newer versions that have a lot of “moving parts.”

When it comes to variable annuities, you also need to be mindful of the fact that, even though your funds can grow in a tax-advantaged manner, you can also be subject to market risk in the event of a correction – or even a slight downward blip.

In addition, once you have committed to an annuity, it can typically be difficult to get your money back – at least without paying a surrender charge – if you determine later on that it really isn’t the right financial tool for you.

That’s where the Annuity Gator comes in.

We focus on providing in-depth education to people who are interested in annuities. You can check out our extensive annuity review database on our website. And, if you’re looking specifically for more details on the Kansas City Life Affinity Variable Annuity, then all you have to do is stay right here and keep reading!

Annuity and Retirement Income Planning Information You Can Trust

If this is your first visit to our website, please allow us to personally welcome you here. Annuity Gator is made up of a team of financial and annuity pros who focus on providing in-depth, unbiased reviews of all types of annuities online.

We’ve been at this for quite some time now – far longer than our competitors have – although you may have landed on some of their websites, too. Many of these other sites will work hard to lure you in by making some pretty bold claims, such as:

  • Highest annuity rates
  • Low fees
  • High payouts
  • 7 – 8% annual return

But, while we really wish that this information was true, the hard truth is that these websites are just giving you part of the story. On our site, however, you will find that we dig into the good, the bad, and yes even the ugly. So, although our annuity reviews don’t always paint a nice rosy picture of these financial vehicles, they can help you to realistically anticipate what may happen going forward if you buy an annuity.

This isn’t to say that annuities are bad products. In fact, quite the contrary. We think that annuities have a place in many investors’ and retirees’ portfolios…provided that it’s the right annuity for the individual’s or the couple’s specific financial needs and objectives.

That being said, if you’ve come here looking for more details on Kansas City Life’s Affinity variable annuity, you are definitely in the right place. So, without further ado, let’s dive in!

Kansas City Life Affinity Variable Annuity at a Glance

Product NameAffinity Variable Annuity
IssuerKansas City Life
Type of ProductVariable Annuity
A.M. Best RatingA
Phone Number(800) 821-6164
Websitehttps://kclife.com

Opening Thoughts on the Kansas City Life Affinity Variable Annuity

Since 1895, Kansas City Life has been helping its clients to prepare for retirement and to protect what they have built up financially. Based in Kansas City, Missouri, this insurer has several subsidiaries, including:

  • Old American Insurance Company
  • Grange Life Insurance Company
  • Sunset Financial Services
  • Sunset Life Insurance Company of America

Kansas City Life offers a wide range of products, including term and permanent life insurance, as well as fixed and variable annuities. As of the third quarter of 2019, the company had more than $88.3 billion in revenues, which represents an increase of 15% over one year prior. The insurer also took in nearly $55.4 million in net premiums from insurance and annuity sales.

While variable annuities have taken somewhat of a back seat to other, safer, alternatives like fixed and fixed indexed annuities over the past decade, there is a definite niche for these products – particularly with those who are seeking the opportunity for a higher rate of return, as well as the tax-deferred growth of assets.

So, even though there are both pros and cons to owning a variable annuity, these financial vehicles could still have a place in your portfolio. In order to tell, though, you need to be sure that you know the whole story!

Before we get into the gritty details, there are some required legal disclosures here…

This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Kansas City 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.

Download Your Free Annuity Buyers Guide HERE

How Kansas City Life Describes the Affinity Variable Annuity

According to Kansas City Life, the Affinity Variable Annuity is a savings vehicle that helps you to accumulate assets on a tax-deferred basis. As an annuity, it is the only investment vehicle that can guarantee an income for your entire lifetime – regardless of how long you may live.

In this annuity, you can decide how to invest your money from a diverse portfolio that includes a variety of investment options that could offer you a higher rate of return. There is also a fixed account available that offers a guaranteed minimum interest rate. So, this annuity could be considered “the best of both worlds.”

The Affinity Variable Annuity provides protection for your heirs, too. This comes in the form of a death benefit that provides for at least a return of your initial principal invested (adjusted for any withdrawals), or alternatively, for an enhanced guaranteed amount.

For example, the Annual Ratchet Guaranteed Minimum Death Benefit, or GMDB, provides the greater of the base death benefit or the greatest contract anniversary value on or preceding the annuitant’s date of death or attained age 80. (Note that there is an additional charge for this benefit).

Alternatively, you could choose to go with the Enhanced Combination Death Benefit. This benefit would be the greater of:

  1. The base death benefit
  2. The amount of the premiums paid in, accumulated annually at 5% interest until the annuitant’s death – up to a maximum of two times the net premiums deposited, or
  3. The highest contract anniversary value on or preceding the annuitant’s date of death or attained age 80. (There is also an annualized charge for this benefit).

If you should have to reside in a nursing home for a certain period of time (i.e., 90 days), you may qualify for the nursing home waiver. This option will waive all of the surrender charges if your proceeds from the annuity are taken over a period of three years or more.

You could also qualify to obtain a bonus, which in turn could help you to accumulate even more money for retirement. For instance, when your contract value is $100,000 or more, you will earn a monthly bonus equal to an annualized rate of 0.15% of the value of the funds in the variable sub-accounts. Starting in the ninth contract year, you will receive a monthly bonus equal to an annualized rate of 0.20% of the value of the funds in the variable sub-accounts.

As with other annuities, there are several income options available on the Affinity Variable Annuity from Kansas City Life. These include:

  • Lump-sum distribution
  • Payments for a specified amount
  • Payments for a specified period of time
  • Life income options – including those with 10- or 20-year guarantees
  • Joint and survivor income options

For more in-depth details, you can view the Kansas City Life Affinity Variable Annuity brochure HERE.

How an Advisor Might “Pitch” this Annuity to You

If you have been presented the Kansas City Life Affinity Variable Annuity by an insurance or financial advisor, it is likely that he or she keyed in on the tax-deferral of the account, as well as the opportunity for generating a higher return that you could get with either a fixed or a fixed indexed annuity.

Of course, there are also a number of income options that are available on this annuity – which include an alternative for lifetime income either for an individual or for joint annuitants. So, this could help to rid you of the worry about running out of money in retirement.

Yet, while this is all well and good, variable annuities are not necessarily known for being the best alternative for generating lifetime income. While you can obtain a stream of income for life, oftentimes, due to the risk to the insurance company involved, these products end up only generating the same amount of income – or less – than safer options such as fixed annuities.

That being the case, would you really want to endure sleepless nights wondering what the market is going to do, and worrying that your hard-earned principal could be lost before you retire?

Annuities can be confusing products – and because of that, it is important that you know what you’re getting into, and you know what questions you should ask before moving forward. With that in mind, if you would like some additional tips on what you need to know before buying an annuity, just simply click here so that you can immediately access our free report on how to shop for an annuity.

What About Fees on the Affinity Variable Annuity from Kansas City Life

While many investors feel that all annuities are riddled with fees, this is not necessarily the case. For instance, even though an agent commission is often charged on all annuities, it is typically built into the premium price – at least on many of the fixed and fixed indexed annuity options.

But the reality is that variable annuities are loaded with a number of charges. With the Affinity Variable Annuity from Kansas City Life, these include:

  • $30 annual administration fee (taken at the beginning of each contract year – but is waived if your contract value is $50,000 or more at the beginning of the contract year)
  • Mortality and Expense (M&E) charge + an asset-based administration charge, which equals 1.4% annually

Then there is the surrender charge issue. Here, if you opt to take out more than 10% of the contract’s value during the first nine years of purchasing the Affinity Variable Annuity, you can incur a withdrawal charge.

Affinity Variable Annuity Surrender Charges

Contract YearSurrender Charge Percentage
18
28
37
46
55
64
73
82
9+0

Depending on the optional features that you choose to include on the Affinity Variable Annuity, there could be even more charges to contend with. For instance:

  • The Annual Ratchet GMDB costs you an annualized charge of 0.20% of the value of the funds in your variable sub-accounts
  • The Enhanced Combination GMBD costs 0.35% of the value of the funds in your variable sub-accounts
  • If you qualify for a contract bonus, your surrender charge may be higher, and surrender periods may be slightly longer, for the Affinity Variable Annuity that other variable contracts that do not credit bonuses on contract values. If that’s the case, is this bonus really worth it?

We didn’t think so either!

The Annuity Gator’s End Take on the Kansas City Life Affinity Variable Annuity

Where the annuity works best:

As a variable annuity, the Affinity Variable Annuity from Kansas City Life could be a viable option for those who:

  • Want the opportunity for high, market-related returns
  • Are seeking a lifetime income
  • Want to keep depositing money into a tax-advantaged financial vehicle after they have maxed out their IRA and / or their employer-sponsored retirement plan(s)

Where it works the worst:

Conversely, this may not be a good option for those who:

  • Have a lower tolerance for risk
  • Need their money before the end of the surrender period
  • Do not plan on using the lifetime income feature

In Summary

When you are weighing the pros and cons of purchasing any type of financial product, it is important to consider your overall goals – both the short and long term. With some investors, the primary draw of a particular product may be the opportunity for growth – even if it means risking the protection of principal.

As it relates to the Affinity Variable Annuity from Kansas City Life, there are numerous benefits, such as the many investment options, the ability to diversify, and of course, the income stream you could obtain in retirement.

However, there are also some tradeoffs that you need to consider – which include being exposed to market-related risk, as well as the numerous charges and fees that are involved with variable annuity products such as this one.

So, if you are a bit hesitant to move forward – especially with depositing a sizeable chunk of your retirement savings – it is possible that it is because there are other financial product alternatives that could fit your needs a bit better.

The only way to truly know if this, or any, annuity is a good fit for you is to have it tested. We can provide this service for you, so if you would like to input your specific information and see the resulting details, just simply contact us.

Have Any More Questions on the Kansas City Life Affinity Variable Annuity?

We realize that this annuity review ran a bit long, so we thank you for sticking with us thus far. However, we believe that it is important to provide “too much” information, as versus not enough.

If, after reading through this annuity review, you still have any questions or concerns about the Kansas City Life Affinity variable annuity, we encourage you to reach out to us directly via this secure online contact form. Our annuity experts will be happy to walk you through any of the information that you need.

Also, if you benefit from this annuity review, please feel free to share it by forwarding it on to anyone whom you know that may also benefit from it. We are always happy to help others in determining whether or not a particular annuity may be right for them.

In addition, we know just how quickly information about annuities can and does change. Therefore, if you happened to notice anything in this review that may be outdated or in need of revision, please let us know that, too and we will make the necessary updates as soon as possible.

Are there any other annuities that you would like to have us review?

If so, no problem! Just let us know the name of the annuity (or annuities, if there is more than just one), and our team of annuity geeks will get on it!

Best,

The Annuity Gator

Independent Review of the Kansas City Life Affinity Variable Annuity

 

 

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