Power 5 Protector Review
The Power 5 Protector emerges as a highly considered annuity choice. It’s a fixed index annuity with a 5-year surrender period and attractive features and benefits. But is this annuity a worthy investment for you? It's precisely what this Power 5 Protector review aims to uncover.
About Power 5 Protector
The Power 5 Protector is a fixed-indexed annuity issued by American General Life Insurance Company. It’s designed for investors who prefer safety and security. The gains are linked to a positive change in a market index, allowing investors to receive some of the upside but none of the downside. This suits those who prefer bonds, bank CDs, and other safe investments.
Corebridge Financial Rating
Rating Company
Rating
Moody’s
A2
S & P
A+
A.M. Best Rating
A3
Comdex
82
Power 5 Protector Highlights
-
Fixed Index Annuity
The Power 5 Protector is a fixed index annuity (FIA) issued by the American General Life Insurance Company (AGL). It’s not a direct investment in the stock market or index -
Opportunity to Earn Interest
In exchange for your premium, the FIA offers the opportunity to earn interest based on specific indices or a fixed rate -
Guaranteed Income for Life
AGL promises to make regular income payments through annuitization when you need income -
Premium Branded Product
The rates you can earn will vary depending on the premium you deposit -
High First-Year Yield
When your full premium deposit is allocated to the fixed interest account, the highest first-year yield available is 5.00% on premium amounts of $100,000 - $1,000,000 -
Penalty-Free Withdrawals
After the first contract year, you can withdraw up to 10% of the previous contract anniversary contract value -
Death Benefit
This annuity waives withdrawal penalties upon death. Your named beneficiary(ies) will receive a death benefit equal to the total accumulation value -
Fixed Index Purpose
The Power 5 Protector is part of The Power Series of Index Annuities -
Term
This annuity has a term of 5 years
Power 5 Protector Overview
🔔 Important Information
Product Type
Fixed Indexed Annuity
Issuing Insurance Company
American General Life Insurance Company
Term
5 Years
Surrender Schedule
8%, 7%, 6%, 5%, 4%
Free Withdrawal
1st year: 0%, 2nd+ year: 10%
Market Value Adjustment
Applicable
Minimum Contribution
$25,000
Maximum Contribution
$2,000,000
Max Age Qualified
85
Types of Funds
Non-eligible, 401k, Individual Retirement Account, IRA for a spouse, Transferring IRA, Rolling over IRA, 403B Tax-Sheltered Annuity, Simplified Employee Pension IRA, Roth IRA, Tax-Free Exchange 1035, Stretching IRA, Inherited IRA, Non-Qualified Stretch, and Thrift Savings Plan
Power 5 Protector Historical Rate of Return
The hypothetical historical performance provided herein showcases the annualized return of allocation strategies, representing the investment's annual growth rate considering compounding effects. Similar analyses can be found for each account in official fixed index annuity illustrations provided by insurance carriers.
What's not reflected:
The annualized return does not encompass rider charges, strategy fees, or applicable premium bonuses.
Notes on rates:
The information presented assumes the annuities' current caps, spreads, participation rates, and other related rates, without guarantee.
No guarantees:
These actual elements are subject to change over time, resulting in potentially higher or lower outcomes. Additionally, no single index consistently outperforms in every scenario. It is advisable to consult with a properly licensed and educated annuity professional before making any decisions.
Fees and Charges
If you withdraw more than the penalty-free amount during the surrender period, the Power 5 Protector surrender schedule applies. The surrender charges start at 8% in the first year and gradually decrease to 4% in the fifth year. Additionally, a market value adjustment might be applied to early withdrawals.
Index Options
The annuity's interest is linked to your chosen indexes' Power 5 Protector performance. You may select a combination of the following indexes:
- ML Strategic Balanced
- MSCI EAFE
- PIMCO Global Optima Index
- Russell 2000
- S&P 500
Power 5 Protector Annuity Surrender Schedule
The Power 5 Protector surrender schedule includes fees you would incur if you withdraw more than the penalty-free amount during the surrender period.
Contract Year Surrender Charge
Power 5 Protector Key Features
Here's an overview of the Power 5 Protector benefits, such as its market value adjustment (MVA) and penalty-free withdrawals.
Market Value Adjustment (MVA)
- MVA changes depending on the performance of the chosen index.
- MVA charges only apply to clients who want to withdraw funds early; these fees won't be charged if you own your contract to its maturity date.
Penalty-Free Withdrawals
- The penalty-free withdrawal amount provided after the initial contract year is up to 10% of the contract value and is noncumulative.
- State variations apply.
Death Benefit
- It waives withdrawal penalties upon death.
- The named beneficiary(ies) will receive a death benefit equal to the total accumulation value.
Pros and Cons
-
Safety and Security: This fixed-indexed annuity offers a unique blend of safety and security. Gains are linked to a positive change in a market index, allowing investors to receive some upside but none of the downside
-
Potential for Higher Returns: It offers higher returns than traditional fixed-income investments like bonds and bank CDs
- Penalty-Free Withdrawals: After the first contract year, you can withdraw up to 10% of the previous contract anniversary contract value without incurring any company-imposed charges.
-
Surrender Charges: You will incur surrender charges if you withdraw more than the penalty-free amount during the surrender period. The surrender charges start at 8% in the first year and gradually decrease to 4% in the fifth year
-
Market Value Adjustment (MVA): A market value adjustment might be applied to early withdrawals, which could reduce the amount you receive
- Limited Upside Potential: While the Power 5 Protector provides some of the upside of the linked index, the potential gains are limited by caps, spreads, or participation rates
Company information
Company Name
American General Life Insurance Company
Website
Phone Number
1-800-445-7862
A.M. Best Rating
A (excellent)
Moody’s Best Rating
A2 (Good)
S&P'S BEST RATING
A+ (Strong)
Product Information
Product Name
Power 5 Protector
Product Type
Fixed Indexed Annuity
Product Information
This annuity is a hybrid of indexed and fixed annuities, providing indexed annuity benefits at a fixed interest rate. This means it guarantees a set amount of income payments. Fixed-indexed annuities offer the potential for market-linked growth while providing a guaranteed retirement income stream, making them an excellent option for more conservative investors.
Account Types
Non-qualified, 401(k), Individual Retirement Account (IRA), IRA for Spouse, Transferred IRA, 403(b) Tax-Sheltered Annuity (TSA), Simplified Employee Pension (SEP) IRA, Roth IRA, 1035 Exchange, Extended IRA, IRA Inheritance, Non-Qualified Extended IRA, and Thrift Savings Plan (TSP)
Not Available In
NY
Annuity Expert
Jeremiah Konger
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1. Watch Videos on How to Identify The Highest Paying Protected Income & Growth Annuities.
2. Watch Videos That Reveal What to Look For When Buying A Protected Growth Annuity.
3. Click Here To Access Our Annuity Review Vault To Compare The Pro's and Con's of Dozens of Annuities.
Other Products
American General Life Insurance Company, an AIG member company, offers a variety of annuity products. These include:
Power 7 Protector
This is a multi-year annuity with a death benefit guarantee and potential for growth over a 7-year term
Power 7 Protector Plus Income
This annuity combines the features of the Power 7 Protector with guaranteed income payments throughout the 7-year term.
Power Index Advisory
This product links your annuity's growth potential to a market index, offering growth potential while protecting your principal.
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