Independent Annuity Review
AIG
Power Select Builder 8
Fixed Index Annuity
BY JEREMIAH KONGER, October 6th, 2020 11:00 AM
AIG - Power Select Builder 8
Annuity Type: Fixed Index
A.M. Best Carrier Rating A
Surrender Schedule: 8 years
Included Riders: Nursing Home/Terminal Illness Waiver of Surrender (no charge)
Optional Riders: N/A
Premium Bonus: 4%
Free Withdrawal: 5% Annual
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Nowadays, it seems like just about everyone is looking for a little guarantee from their money. Let’s not kid around - this is something that should have always been the case, but perhaps wasn’t as big of a priority until we saw just what an unforeseen circumstance could do to an economy. The point that was driven home was not that we need to be worried about a specific type of event (i.e. a pandemic), but rather that this was one of many types of things that can happen to throw off an economy. And, if you are not properly prepared, it can completely tank a retirement plan.
When it comes down to it, there are still far too many people overly-invested in the stock market. Investing certainly has its place, but you never want to end up in a position where you are relying too heavily on things, only to see a market downturn destroy so many years of hard work. However, it is also important that you aren’t just establishing an emergency fund that simply sits around under the mattress. As tempting as that can feel on certain days, the best strategy is to find a way to grow your money in a safe, yet powerful way.
It can be stressful to try to find a way to grow your money safely, that also gets you a rate that’s worth your time. After all, interest rates are so low that CDs, bonds, money markets, and savings accounts don’t even seem worth it most of the time. Fortunately, the safe growth that is associated with an annuity may be just what you need to grow your money in a way that you’ve always desired.
Do you want the ability to invest in something with strong growth potential, that is also completely protected from market loss? AIG’s Power Select Builder 8 Fixed Index Annuity may be exactly what you want. With the chance to invest in reliable proven market indexes, such as the Merrill Lynch Strategic Balanced Index, and the safety net of knowing that any losses get zeroed out on your account, this annuity can be a powerful tool in your retirement arsenal. Moreover, five available indexes including PIMCO Global Optima, Alliance Bernstein All Market, Russell 2000, and the standard S&P 500 Index give plenty of options to spread your principal across the equity and multi-asset, risk managed strategies, meaning that the possibilities for growth are wide-ranging.
The Power Select Builder 8 provides three ways to grow your money. You can choose a number of diverse index crediting strategies including one year and two year point to point with participation rates, cap rates and/or spreads, which allows your money to grow based on market linked index performance. You also receive the benefit of a 4% premium enhancement bonus, which gives immediate growth to your principal investment. For example, if you were to invest $100,000, the premium enhancement bonus would apply a 4% credit, growing your $100,000 to $104,000. The 4% premium bonus is fully vested after the 8th contract year. Finally, a 1-year fixed account can provide the kind of guaranteed interest rate that you desire for peace of mind, currently offered at 1.3%.
Of course, the AIG Power Select Builder 8 Fixed Index Annuity does not check every single box within the annuity industry. While there is a provision that allows access to your accumulation value for those diagnosed with a terminal illness, or who end up with extended care needs, the long-term care enhanced benefit options within this annuity non-existent. If LTC is a concern, there are other fixed index annuities on the market that offer an enhanced payout for long-term care needs. Additionally, although this annuity does have a death benefit for beneficiaries, there are other annuities out there that prioritize legacy benefits in a more impressive fashion. Finally, there are annuities out there that do possess stronger, lifetime income rates, for those looking to prioritize guaranteed income in the most powerful way possible.
Overall, the AIG Power Select Builder 8 Fixed Index Annuity as a Safe Growth focused annuity does a great job of providing powerful growth options, while protecting you from those dangerous market downturns that plague so many people out there. If you're looking for an alternative safe money instrument with higher than average growth options, this annuity is definitely one to consider.
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What We Like
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Premium Bonus 4% AIG's Power Select Builder 8 offers a competitive bonus for an 8yr product.
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Strong Renewal Rate History Overall, 99% of renewal rates were better, the same, or no worse than 0.50% from their initial rates.
What Can Be Improved
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Participation Rates/Index Strategy compared to other comparable Fixed Index Annuities, the participation rates and index options offered are average at best.
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No Enhanced Payout Option for LTC
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