Home / Variable Annuities / Reviews / Product Review: AXA Retirement Cornerstone Variable Annuity – | A New VA Is Attractive, Especially If You’re Under 65

With the AXA Retirement Cornerstone VA, you can choose from 20 accounts managed by 10 investment management companies, mostly balanced funds, and invest up to 80% in the stock market in all of them. This is particularly attractive to younger annuity owners because time is on their side should they have to wait for the market to rebound after a downturn.

 

Variable annuity (VA) sales have been in a slump in recent years, and it’s really no surprise because most VAs aren’t as attractive as they once were. Guaranteed income riders are often a bit less generous than those of fixed indexed annuities and the array of subaccounts (mutual funds) in which to invest has shrunk over the years while equity exposure is generally capped at 60%, down from 90%-plus in the past.

Small wonder, then, that VA sales in the first quarter were down nearly 10% from both the first quarter of 2019 and the first quarter of 2018, according to the Insured Retirement Institute.

But there are always exceptions to the rule, and one new and attractive VA is the AXA Retirement Cornerstone Variable Annuity – especially if you’re no older than 65, want an income rider and like the idea of an enhanced death benefit.

The rider in the Retirement Cornerstone’s so-called Protected Benefit Account pays 5% annually, compounded, for both joint and single accounts, more than most competitors if you’re younger than 65. Deferred payment rollups also increase 5% annually. Should the 10-year U.S. Treasury note rate, plus two additional percentage points, exceed 5%, this becomes the new guaranteed payment rate.

Yet more attractive is the growth potential of this VA. You can choose from 20 accounts managed by 10 investment management companies, mostly balanced funds, and invest up to 80% in the stock market in all of them. This is particularly attractive to younger annuity owners because time is on their side should they have to wait for the market to rebound after a downturn.

If you care strongly about the financial welfare of your beneficiary or beneficiaries, you can also buy an unusually attractive enhanced death benefit that would pay them 100% of your principal and whatever interest you earned and did not withdraw. (Investors are also allowed to take less than their 5% rider and reinvest it.) In addition, any Required Minimum Distributions (RMDs) withdrawn from the account do not reduce the death benefit base. Everyone, of course, has to begin taking RMDs after age 70 ½.

If the stock market wound up faring poorly and you simply collected your 5% annual payout, your beneficiary would still receive 100% of your principal. By contrast, most other annuities would deduct these payments, as well as RMD withdrawals, from principal.

The enhanced death benefit fee is 1.25% annually.

Bear in mind that a VA, unlike a fixed indexed annuity, offers no downside protection if the stock market declines over the course of a year. So buyers of this AXA annuity have to be bullish about stock market prospects even though the bull market is already more than 10 years old, the oldest ever, and the U.S. economic expansion is the longest ever. On the bright side, the U.S. stock market has always risen to new records over time despite periodic bear markets.

 

If you are interested in this product, please call 1-866-223-2121 or complete the form below.

 

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