If you’ve been waiting to purchase a fixed annuity product, now is the time to pull the trigger. Insurance companies are probably going to lower fixed annuity rates in the next week or so after a large decline in the 10-year U.S. Treasury rate. Earlier this week, that rate went down 21% from last month and closed at 2.09%. Fixed annuities have been popular in recent years because of their guarantees and transfer of risk. An expert at Annuity FYI would be happy to help answer any questions you have regarding fixed annuity products before rates go down soon. Our latest product alert is for two fixed annuities that are worth consideration for their particular costs and benefits.
Delaware Life’s Pinnacle Multi-Year Guaranteed Annuity (MYGA) is a single premium deferred annuity. This annuity offers guaranteed interest rate periods of 3, 5, 7 or 10 years and has a maximum age of 85. The current yield for the 10 year option is 3.65%. That is 75% higher than the 10-year Treasury. This MYGA guarantees your interest rates, does not charge initial sales or management fees, gives you access to your money and lifetime income. The minimum premium amount for qualified money is $5,000 and $10,000 for non-qualified money. There is a premium limit of $1,000,000 without special company approval. You can withdraw up to 10% of your account value without penalty after the first year. You can take systematic withdrawals yearly, twice a year, quarterly or monthly as long as your minimum account value stays above $2,000. The Pinnacle MYGA offers death benefits equal to your full account value. Surrender charges and market value adjustments will be applied to any withdrawals greater than the free withdrawal amount. Each time your guaranteed interest rate period ends, you have 30 days to select a new time frame. There are also many different options to choose for annuitization, two of which are Life and Life with Period Certain.
The Sentinel Security Life Personal Choice Annuity offers you the ability to customize your annuity with your specific financial needs. You can choose between a 5, 7 or 10 year time frame with this single premium deferred annuity. Currently, the 10-year rate is 3.75% and the 5-year rate is 3.35%. The Personal Choice Annuity offers 6 optional riders that you can select a la carte so that you don’t have to pay for riders that you don’t need. This allows you to receive a higher interest rate because you aren’t automatically paying for 6 benefits if you don’t want them. Although most of your riders will be added during the guarantee period, you can choose to add your required minimum distribution any time during your contract. If you choose to add the required minimum distribution rider, surrender charges and market value adjustments will be waived from tax-qualified plans. There are 5 other riders available with the Personal Choice Annuity. With the preferred 10% free withdrawal rider, you can withdraw up to 10% of your account value yearly without penalty. The terminal illness/nursing home care feature waives your surrender charge if you need your annuity money to pay for terminal illness care or nursing home care lasting more than 90 days. Surrender charges and market value adjustments will also be waived if you add one of the last three riders: death benefits, a 72(t) free withdrawal or an accumulated interest withdrawal.
This is the week to research fixed annuity products and make a purchase if you have been contemplating using this type of financial tool. The guarantees and transfer of risk offered by fixed annuities are hard to find anywhere else. Speak with an expert before fixed annuity rates decrease soon.