Purchasing MYGAs (multi year guaranteed annuities) - mega thread

[cashmoney]

Over time I have purchased 2 MYGAs thru Fidelity investments from their local Representative for $ 300k & $ 225k,

I am just curious how much commission did the Rep make ??

I believe the Fidelity agents may be LOA agent ( licensed only agents) on salary and only getting a small bonus for each sale. An independent agent with a "street level" contract commissions will earn between .5- 5% depending on the interest rate,age ,length of contract and rating of company.Below is "street level" commission for agents for Oceanview an A rated company with high interest rates and also for Mass Mutual A++ with lower interest rates. The agents upline is also getting an override of maybe .5 to 1 %. (An agency like Blueprint is earning the agent commission and override and employing LOA agents)

Oceanview 3 year 4 year 5 year 6 year 7 year
age 0-79 1.5% 1.15 2.25 1.25 2 .75
age 80 + .75 .575 1.25 .625 1.375


Mass Mutual A++ with low interest rates
age 0- 79 2 year 2% 5 year 2.5% 7 year 3.5%

[EricGold]

Blueprint income reports that they earn between 1% and 3% in most MYGA sales.

Presuming my understanding of the numbers is correct (please set me straight if not), I'm always surprised by how much middle-men cost. I casually estimate like this:

The insurance company offers an interest rate at best (for them), 2% below what they might collect on the money. On a 6 year MYGA, that is about 12% gross profit. They have paid e.g. 3% to the middle-men. So around 25% of their gross profit is eaten up by marketing, and perhaps a fair bit more.

[jhblegend]

Blueprint income reports that they earn between 1% and 3% in most MYGA sales.

Presuming my understanding of the numbers is correct (please set me straight if not), I'm always surprised by how much middle-men cost. I casually estimate like this:

The insurance company offers an interest rate at best (for them), 2% below what they might collect on the money. On a 6 year MYGA, that is about 12% gross profit. They have paid e.g. 3% to the middle-men. So around 25% of their gross profit is eaten up by marketing, and perhaps a fair bit more.

While undeniably true, the ultimate truth is insurance products are sold, and not bought. Thus those distributors are considered a necessary evil.

With that being said, there is growth in the direct space with Gainbridge and Canvas. I personally went with Gainbridge.

[Stinky]

Blueprint income reports that they earn between 1% and 3% in most MYGA sales.

Presuming my understanding of the numbers is correct (please set me straight if not), I'm always surprised by how much middle-men cost. I casually estimate like this:

The insurance company offers an interest rate at best (for them), 2% below what they might collect on the money. On a 6 year MYGA, that is about 12% gross profit. They have paid e.g. 3% to the middle-men. So around 25% of their gross profit is eaten up by marketing, and perhaps a fair bit more.

That’s definitely a fair comment.

One comparison point is MYGA commission rates compared to those on annuities that many Bogleheads regard as “poor consumer values”, such as indexed annuities and variable annuities. Those commissions are often in the range of 6-8%.

Finally, one notable exception to the variable annuity “rule” is the Fidelity Personal Retirement Annuity, which I believe pays no commission. It also has no surrender charges or costly riders, which makes it a good consumer value (that is, if one wants or needs a variable annuity).

[cashmoney]

Presuming my understanding of the numbers is correct (please set me straight if not), I'm always surprised by how much middle-men cost. I casually estimate like this:

The insurance company offers an interest rate at best (for them), 2% below what they might collect on the money. On a 6 year MYGA, that is about 12% gross profit. They have paid e.g. 3% to the middle-men. So around 25% of their gross profit is eaten up by marketing, and perhaps a fair bit more.

While undeniably true, the ultimate truth is insurance products are sold, and not bought. Thus those distributors are considered a necessary evil.

With that being said, there is growth in the direct space with Gainbridge and Canvas. I personally went with Gainbridge.

Most consumers don't even know what a MYGA is so yes they definitely still need to be sold which is a little ironic because most agents i have come across who market annuities don't want to sell them because of the relatively low commision vs FIA. I am a licensed agent mostly in the health insurance space and just recently got appointed through a big MYGA wholesaler to market MYGA ( to myself mostly but i didn't tell the wholesaler that ) and the marketing rep for the wholesaler thought there was something wrong with me when i said i was only interested in marketing the MYGA products. Even though i can earn a commission on most of the MYGA out there i still bought most of my MYGAs from Gainbridge and Canvas .

[Stinky]

One oddity about my personal experience with Gainbridge -

As I’ve posted upthread, I have MYGAs from a number of companies, most of which are “qualified” (that is, IRA).

Gainbridge is the only company that hasn’t yet provided me with the “fair market value” (that is, the account value) of my qualified MYGA as of 12/31/24. Every other IRA MYGA company has either sent me a letter or directed me to their website where I can find that value.

This oversight by Gainbridge isn’t critical to me. I’m not yet of RMD age, so the 12/31/24 balance isn’t needed for anything.

However, I just find it odd that Gainbridge hasn’t yet provided the information that all my other qualified IRA insurers have provided.

[HueyLD]

One oddity about my personal experience with Gainbridge -

As I’ve posted upthread, I have MYGAs from a number of companies, most of which are “qualified” (that is, IRA).

Gainbridge is the only company that hasn’t yet provided me with the “fair market value” (that is, the account value) of my qualified MYGA as of 12/31/24. Every other IRA MYGA company has either sent me a letter or directed me to their website where I can find that value.

This oversight by Gainbridge isn’t critical to me. I’m not yet of RMD age, so the 12/31/24 balance isn’t needed for anything.

However, I just find it odd that Gainbridge hasn’t yet provided the information that all my other qualified IRA insurers have provided.

For MYGAs, you can easily calculate the value yourself for any date of a year.

Gainbridge calculates interest using the simple interest method from one anniversary date to the next anniversary date. And accrued interest is added to the beginning principal at each anniversary. And this new principal is then used to calculate the interest for the next year. Let’s illustrate the interest calculation by using a numeric example:

Day one 12/24/2023 principal = 250,000 @ 3% stated rate
Interest earned from 12/24/2023 to 12/24/2024 = 250,000 x 3% = 7,500
Principal balance on 12/24/2024 = 257,500
Accrued interest from 12/24/2024 to 12/31/2024 = 257,500 x 3% /365 x 7 = 148.15
Principal value including accrued interest not yet added to principal = 257,500 + 148.15 = 257,648.15

[jhblegend]

For MYGAs, you can easily calculate the value yourself for any date of a year.

Gainbridge calculates interest using the simple interest method from one anniversary date to the next anniversary date. And accrued interest is added to the beginning principal at each anniversary. And this new principal is then used to calculate the interest for the next year. Let’s illustrate the interest calculation by using a numeric example:

Day one 12/24/2023 principal = 250,000 @ 3% stated rate
Interest earned from 12/24/2023 to 12/24/2024 = 250,000 x 3% = 7,500
Principal balance on 12/24/2024 = 257,500
Accrued interest from 12/24/2024 to 12/31/2024 = 257,500 x 3% /365 x 7 = 148.15
Principal value including accrued interest not yet added to principal = 257,500 + 148.15 = 257,648.15

I don't think this is correct. This was my 1099 value and its associated formula.

The amount is exactly what I would expect in box 1 - interest income. $5,000 * (1.0615)^(245/365)-$5,000 = $204.37

If it were simple like you are saying, it would be $5,000 * .0615*(245/365) = $206.40

[Chogy]

Even though i can earn a commission on most of the MYGA out there i still bought most of my MYGAs from Gainbridge and Canvas .

Thank you for your inputs in this thread. Can you elaborate on why you chose these issuers? Canvas currently has excellent MYGA rates. I'm sitting on unneeded cash (taxable) in retirement, and I want to defer taxes for a while, so as to concentrate on Roth conversions.

[Stinky]

Most all of the MYGAs I’ve seen compound interest daily, as in poster jhblegend’s example.

The only MYGA I know of that pays “simple” interest is Ibexis. But that doesn’t mean that there aren’t others.

I made my post about Gainbridge only because I thought it was odd that they haven’t yet sent out a document showing my 12/31/24 IRA balance, when every other company has done it.

[cashmoney]

I am planning in the coming week, to do a side-by-side comparison of the same annuities through Stan the annuity man, blueprint, annuity advantage and one more.

It will be interesting to see if we can discern any difference in commissions to the provider, by comparing rates. Hopefully there will be enough MyGAs to compare.

I have to say, while I prefer the computer interface of blueprint, I have been very pleased with stan the annuity man's customer service, and literature that he sent. He also has more choices, but that should fall out in my analysis as well.

We've entered retirement, the husband will still be drawing a large income for 3 years. This lets us build out an after-tax myga portfolio plus iBonds ladder and use tips and a stable value fund inside the 401K and IRAs.

Not that what the commission paid to agents should be a factor in your decision but if you look at the ranges of commission earned disclosure on the blueprint website the high end of the range would be in general for applicants that are under age 80 ( this varies between carriers) and typically but not always for longer term MYGA

[Stinky]

The South Carolina and Utah regulators have deemed all of the ACAP insurers (Atlantic Coast Life, Sentinel Security Life, Haymarket, Jazz Re, and Southern Atlantic Re) to be in a "hazardous financial condition" and have ordered them to stop writing new business by December 31, 2024. Quotes from the Utah and South Carolina orders below, which appear to say that ACAP was using premiums from new policies to pay off obligations on old policies and was misleadingly telling customers not to worry. What is likely to happen to the ACAP businesses and their policyholders here?

Utah Order

The Companies are in a Hazardous Financial Condition for the following reasons:

a. With negative capital and surplus in the hundreds of millions of dollars, the Companies’ admitted assets are less than their liabilities; and

b. The Companies are using funds from new premiums and/or liquidating investments other than the impaired investments to pay their obligations as they become due.

South Carolina Order

On December 11, 2024, I issued a confidential Order Amending Confidentiality of Certain Provisions of Confidential Order Imposing Administrative Supervision and Appointing Supervisor making public, among other things, that the Licensees had been directed to cease writing all new business effective December 31, 2024.

Since the issuance of the December 11, 2024, order, the Department has received a report that at least one of the Licensees is circulating information stating that its “financials are strong” and “is closing out a profitable” year and which expressly refers to the issuance of an unspecified “Order” by the Department.

Such statements clearly contradict the Supervisor, are inconsistent with the circumstances justifying ongoing regulatory action and are otherwise confusing, inaccurate and misleading.

Additionally, A-CAP and/or at least one of the Licensees have made other misleading assertions regarding the directive to cease writing new business.

In the days since my December 11, 2024 Order providing for the limited release of information, the Department has received numerous inquiries from interested parties requesting additional information and seeking clarification regarding the status of the Licensees.

Here’s an update since this post, which was made in another thread on 12/31/24 -

Today, 2/13/25, in a victory for the A-CAP group, a South Carolina judge overturned the order of the South Carolina Department of Insurance and allowed Atlantic Coast Life to continue to write new business.

Next up is a similar hearing for Sentinel Security in Utah in March.

Here’s a link to the article. https://insurancenewsnet.com/innarticle ... regulators

Here's an additional update, following the comments above from 12/31/24 and 2/13/15, relating to the A-CAP group -

A-CAP announced in a press release on 3/5/25 that the Utah Insurance Department had agreed to "stay" its emergency order that commanded Sentinel Security to stop writing new business. The order is "stayed" until a trial that is scheduled to start on May 12, 2025. Here's a link to the press release: https://search.app/hABiv215K6jyCKaw7

In other words, both Sentinel Security and Atlantic Coast are now free to write new business.

I haven't seen those companies show up on the annuity marketplaces like Blueprint Income, etc. And the companies might not appear on those sites until the annuity agents once again feel comfortable writing new business through the companies.

That being said, this is a pretty major win for the A-CAP companies. The second win in the last two months.

I'll continue to monitor this situation.

[HueyLD]

Most all of the MYGAs I’ve seen compound interest daily, as in poster jhblegend’s example.

The only MYGA I know of that pays “simple” interest is Ibexis. But that doesn’t mean that there aren’t others.

I made my post about Gainbridge only because I thought it was odd that they haven’t yet sent out a document showing my 12/31/24 IRA balance, when every other company has done it.

Gainbridge uses simple interest between anniversary dates. IOW, it only compounds annually.

As an example (taken from annual statement for a Gainbridge MYGA):
6/18/2021 Initial principal: 250,000
6/18/2022 interest credit=25000*3%=7500; principal=25000+7500=257500
6/18/2023 interest credit=257500*3%=7725; principal=257500+7725=265225
6/18/2024 interest credit=265225*3%=7956.75; principal=265225+7956.75=272181.75

[suginami]

Here’s an update since this post, which was made in another thread on 12/31/24 -

Today, 2/13/25, in a victory for the A-CAP group, a South Carolina judge overturned the order of the South Carolina Department of Insurance and allowed Atlantic Coast Life to continue to write new business.

Next up is a similar hearing for Sentinel Security in Utah in March.

Here’s a link to the article. https://insurancenewsnet.com/innarticle ... regulators

Here's an additional update, following the comments above from 12/31/24 and 2/13/15, relating to the A-CAP group -

A-CAP announced in a press release on 3/5/25 that the Utah Insurance Department had agreed to "stay" its emergency order that commanded Sentinel Security to stop writing new business. The order is "stayed" until a trial that is scheduled to start on May 12, 2025. Here's a link to the press release: https://search.app/hABiv215K6jyCKaw7

In other words, both Sentinel Security and Atlantic Coast are now free to write new business.

I haven't seen those companies show up on the annuity marketplaces like Blueprint Income, etc. And the companies might not appear on those sites until the annuity agents once again feel comfortable writing new business through the companies.

That being said, this is a pretty major win for the A-CAP companies. The second win in the last two months.

I'll continue to monitor this situation.

While a win for A-Cap, makes you wonder the ethics of an agent who would be comfortable selling annuities for both Sentinel and Atlantic Coast.

[Stinky]

While a win for A-Cap, makes you wonder the ethics of an agent who would be comfortable selling annuities for both Sentinel and Atlantic Coast.

I agree on the “agent ethics” point.

Further, I would question the sanity of an agent who would sell a policy for either company right now. Seems to me that the agent would be taking on tremendous professional liability by selling an A-CAP policy now. If the companies do ultimately fail, any agent who sold a policy with these companies after these regulatory actions would be prime targets for lawsuits.

I don’t know what it would take to make these companies attractive for new business. Maybe it will take AM Best, which was ready to announce a 3 step downgrade last spring, giving them a clean affirmation of the B++ ratings. Maybe that’s what it takes.

[suginami]

I spoke to Blueprint on the phone. They’re not going to sell them.

[Stinky]

I spoke to Blueprint on the phone. They’re not going to sell them.

Good decision on their part.

And not at all surprising.

Why take the risk?

[cashmoney]

I spoke to Blueprint on the phone. They’re not going to sell them.

Good decision on their part.

And not at all surprising.

Why take the risk?

i just checked Annuity Rate Watch which is the quoting system that most of the big IMOs/ agencies use including Blueprint and they are no longer quoting those two carriers .Also they are not listed on Firelight anymore which is the electronic enrollment platform used by many agencies so it would be hard for any agent to submit business at this point.I checked this in about 10 states so not sure if it all states.

[EricGold]

The insurance company offers an interest rate at best (for them), 2% below what they might collect on the money. On a 6 year MYGA, that is about 12% gross profit. They have paid e.g. 3% to the middle-men. So around 25% of their gross profit is eaten up by marketing, and perhaps a fair bit more.

While undeniably true, the ultimate truth is insurance products are sold, and not bought. Thus those distributors are considered a necessary evil.

It's easy for me to agree with your POV for most annuities, but MYGA ? Are bank Certificate of Deposits 'sold and not bought' ?

[GuyInFL]

One oddity about my personal experience with Gainbridge -

As I’ve posted upthread, I have MYGAs from a number of companies, most of which are “qualified” (that is, IRA).

Gainbridge is the only company that hasn’t yet provided me with the “fair market value” (that is, the account value) of my qualified MYGA as of 12/31/24. Every other IRA MYGA company has either sent me a letter or directed me to their website where I can find that value.

This oversight by Gainbridge isn’t critical to me. I’m not yet of RMD age, so the 12/31/24 balance isn’t needed for anything.

However, I just find it odd that Gainbridge hasn’t yet provided the information that all my other qualified IRA insurers have provided.

I noticed the same thing with Aspida. When I log onto their website, it shows the current value of my single MYGA, but there doesn't seem to be a way to generate any reports showing values on previous dates. There's a formula in the contract I can play with, but an annual or quarterly statement would be nice.

[Wrench]

Companies are required by law in Secure 2.0 to report to owners the fair market value (FMV) of qualified annuities as of the end of the previous year. That said, I hold an SPIA at The Principal Company and and in past years form 5498 reporting FMV has not appeared in my mailbox until as late as June. Last year I didn't get it at all until I called them and they set up an online account for me (finally!) and I got it. This year it was available online by the end of January, so maybe their systems are catching up with Secure 2.0 law. Fortunately, I am not yet of RMD age so the values at this point are somewhat academic.

Wrench

[Chardo]

I spoke to Blueprint on the phone. They’re not going to sell them.

Good decision on their part.

And not at all surprising.

Why take the risk?

Their errors and omissions carrier might bar them from selling any low rated insurer.

[Stinky]

Good decision on their part.

And not at all surprising.

Why take the risk?

Their errors and omissions carrier might bar them from selling any low rated insurer.

It’s most certainly possible that Blueprint Income’s errors and omissions policy might preclude writing through “low rated” insurers. In fact, I’d be surprised if it didn’t.

However, the A-CAP companies present a special case. While AM Best proposed cutting the ratings last year from B++ to B-, a three step downgrade to a rating lower than any on the Blueprint website, A-CAP filed a lawsuit against AM Best, and the downgrade was never officially announced. So I believe that the two companies maintain their “official” B++ rating today. That is the same rating that a number of Blueprint-listed carriers hold, and is higher than a few companies on the Blueprint site.

So it’s more than an errors and omissions policy that’s keeping the companies off the Blueprint site. It’s likely a combination of lack of application support, as mentioned by “cashmoney” above, and wanting to avoid the customer disappointment/lawsuits if the A-CAP companies ultimately go into receivership or liquidation.

[Wrench]

One oddity about my personal experience with Gainbridge -

As I’ve posted upthread, I have MYGAs from a number of companies, most of which are “qualified” (that is, IRA).

Gainbridge is the only company that hasn’t yet provided me with the “fair market value” (that is, the account value) of my qualified MYGA as of 12/31/24. Every other IRA MYGA company has either sent me a letter or directed me to their website where I can find that value.

This oversight by Gainbridge isn’t critical to me. I’m not yet of RMD age, so the 12/31/24 balance isn’t needed for anything.

However, I just find it odd that Gainbridge hasn’t yet provided the information that all my other qualified IRA insurers have provided.

You can find the FMV from Gainbridge on their website. Click on your contract, go to Values and choose Custom Date Range under Transaction Periods. Enter the initial contract date and then 12/31/2024 as the final date in the Customer Date Range box. It will show the contract value, and the cash surrender value as of 12/31/2024. Since the cash surrender value is what you could actually recover on 12/31/2024, I believe that value is the "Fair Market Value" you would need for use in your RMD tax calculations. Maybe Gainbridge believes that is sufficient to meet the legal requirements of reporting FMV?

Wrench

[HueyLD]

One oddity about my personal experience with Gainbridge -

As I’ve posted upthread, I have MYGAs from a number of companies, most of which are “qualified” (that is, IRA).

Gainbridge is the only company that hasn’t yet provided me with the “fair market value” (that is, the account value) of my qualified MYGA as of 12/31/24. Every other IRA MYGA company has either sent me a letter or directed me to their website where I can find that value.

This oversight by Gainbridge isn’t critical to me. I’m not yet of RMD age, so the 12/31/24 balance isn’t needed for anything.

However, I just find it odd that Gainbridge hasn’t yet provided the information that all my other qualified IRA insurers have provided.

You can find the FMV from Gainbridge on their website. Click on your contract, go to Values and choose Custom Date Range under Transaction Periods. Enter the initial contract date and then 12/31/2024 as the final date in the Customer Date Range box. It will show the contract value, and the cash surrender value as of 12/31/2024. Since the cash surrender value is what you could actually recover on 12/31/2024, I believe that value is the "Fair Market Value" you would need for use in your RMD tax calculations. Maybe Gainbridge believes that is sufficient to meet the legal requirements of reporting FMV?

Wrench

Thanks very much for the “how to find the values” on a particular date.

And it appears that the FMV for RMD purpose can be a bit tricky because the contract value on a particular date is before surrender charge and market value adjustment. Since the classic definition of FMV is what the seller gets upon sale/exchange, I would think that the surrender value is the FMV for a MYGA.

[Stinky]

For the purposes of RMD calculations, the "fair market value" of a MYGA (or any other fixed annuity that is in the accumulation stage and does not have riders) is the account value, rather than the surrender value.

That's what I've observed with respect to my (many) MYGAs that are qualified; that is, IRA annuities. And it is supported by this excerpt from a Mass Mutual brochure, as follows:

The fair market value of your annuity is generally the account value. It may be greater if your annuity has a death benefit that exceeds the account value or has a living benefit rider.

https://www.massmutualascend.com/insigh ... it%20rider.

As to my issues with Gainbridge not providing me with the fair market value of my IRA annuity as of 12/31/24 - I found that the using a very narrow "transaction date" range, as suggested by poster "Wrench" above, provides me with what appears to be an accurate account value as of 12/31/24. If I was required to take RMDs in 2025, then I would feel comfortable in using this as the fair market value of my Gainbridge MYGA as of that date.

[EricGold]

^^ Thanks for the informative discussion related to end of year FMV. I also guessed wrong, and figured that the account value less surrender fees would be the FMV but after 'Stinky' corrected us, I can see the logic. Fees may be a tax deductible expense, but the account value is not reduced by them in the eyes of the IRS. RMD determination does not have a tax deductible expense but the IRS logic consistency remains the same.

By the way, I went to the Gainbridge site to play around to be sure I could get the Dec 31/2024 account balance. The drop-down menu has a choice labeled 'calendar year to date.' The starting balance of Jan 1 is the same balance as a day earlier, Dec 31 obtained by the custom date method.

[DustyDebris]

For the purposes of RMD calculations, the "fair market value" of a MYGA (or any other fixed annuity that is in the accumulation stage and does not have riders) is the account value, rather than the surrender value.

I thought that assets in a MYGA were not counted in RMD calculations?

[Stinky]

For the purposes of RMD calculations, the "fair market value" of a MYGA (or any other fixed annuity that is in the accumulation stage and does not have riders) is the account value, rather than the surrender value.

I thought that assets in a MYGA were not counted in RMD calculations?

If they’re in an IRA and not annuitized, they are part of the RMD calculation. Just like any other IRA account.

[KeepItSimpleSomehow]

SENTINEL MYGA bag holder here also. Seeking info and to share what is and will be my experience.

My agent?? Well, considering I had not heard anything regarding the 7 Sentinel MYGAs ... I made the call. Next day call back; cheery; casually saying ... "We did not contact you because you are fully covered by CA Guaranty"

I said No ... California is 80% and emailed to her:
https://www.califega.org/[b]FAQ[/b]

If I bought three annuities each worth $250,000 from a company that becomes insolvent, how much is protected?
$300,000. Typically, an annuity is covered at 80% up to $250,000; however, given there are multiple annuity contracts with a single insurer, the maximum coverage increases to $300,000.
------------------------
So ...here we go. Next day she called me ... "Three day weekend but will call CA Guaranty Monday"

All that "help" aside ... tough decisions ahead.

Maturity May 27, 2025 for two (correction) three MYGAs. "Should" get the paperwork 60 days in advance from Sentinel; so on watch this month. I do not see any choice here but to stay the course.

2024 Experience: Cashed out 3 MYGAS Matured May 7
Mar 19 -- Received in the mail 60 days prior to maturity Sentinel forms
Apr 1st -- My Priority Mail forms back to Sentinel received
May 7 -- Maturity
May 14 -- Checks in the mail to me received and deposited at Fidelity branch

2026 -- Last four MYGAs mature -- These are the tough decision category
May 7 - two
June 12 - one
June 22 - one

At this point with the agent, getting to the bottom of which hit is the best hit. Surrender (if even possible) vs Guaranty

Please share your thoughts for this .. and I will post back as it goes.

[Stinky]

SENTINEL MYGA bag holder here also. Seeking info and to share what is and will be my experience……

2026 -- Last four MYGAs mature -- These are the tough decision category
May 7 - two
June 12 - one
June 22 - one

At this point with the agent, getting to the bottom of which hit is the best hit. Surrender (if even possible) vs Guaranty

Please share your thoughts for this .. and I will post back as it goes.

Wow, your agent was really enamored with Sentinel Securiry!

Good for you for getting your money out in 2024 and not re-upping for another term.

And I agree with cashing out your 2025 policies. Given the “temporary reprieve” for Sentinel Security reported upthread, with a court hearing set to start in May 2025, you should be in fine shape to get your money and interest out fully intact.

That leaves your 2026 policies —-

Do you have online access to the policies? If so, get the current account value and surrender value for each policy. If not, set up online access and get the values.

For the purpose of this post, let’s say that your total 2026 account value is $100,000, and your total current surrender value (including surrender charge and MVA) is $90,000. There are three plausible paths -
—- You could surrender right now. You’d have $90,000 in hand, which you could reinvest.
—- You could continue to hold the policies, and Sentinel Security is not put into receivership before you can get your surrender checks in mid 2026. You’d have $100,000 plus interest from now until mid 2026.
—- You could continue to hold the policies, and Sentinel Security is put into receivership before mid 2026. You would lose access to the money until the receivership is resolved, either by rehabilitation or (most likely) by liquidation. The date of liquidation is when the amount covered by the guaranty association is established. Liquidation could take 1–5 years to resolve. And your $90,000 would get further haircut by the California guaranty association 80% limitation, down to $72,000 plus whatever additional interest you earn.

I personally think that there’s about a 50/50 chance that the A-CAP companies are put into receivership in the next year. Two independent outside parties, AM Best and the state regulators, have had serious concerns about the companies’ assets. The companies have been able to get the courts to intervene and get the regulators to stand down for now, but that situation might change later this year.

I’m planning to hold my A-CAP policies and not surrender. My guaranty association covers 100% of surrender value, and my surrender value is growing every month as the surrender charge and MVA burn off. And I will not be hurt if I lose access to the funds for a while.

But your coverage at 80%, plus losing access to the funds for a time if the company is taken over, might make me lean toward surrendering now. Losing 20% of surrender value, plus needing to wait a few years to access it, is a pretty bitter pill to swallow.

Look at the bright side. You got all your 2024 policies out at full value, and the chances are very high that you’ll get you 2025 policies out at full value. And I hope that your 2026 policies have a current surrender value higher than the original premium you paid, even though the surrender value is less than the account value.

My crystal ball is cloudy. Those are my best current thoughts.

Post back with questions.

[Atticus713]

I thought that assets in a MYGA were not counted in RMD calculations?

Hi DustyDebris,
I’ve learned much on the topic of annuities from both this excellent thread by Stinky as well as from “Stan the Annuity Man” on YouTube.

From what I understand, you may be referring in your quoted question above to a QLAC (Qualified Longevity Annuity Contract) which is basically a DIA (Deferred Income Annuity) inside of an IRA. The funds you have in a QLAC are not included in RMD’s. The current limit is $200k per person. One stipulation is that you must turn on the annuitization income stream by age 85 at the latest.

Purchasing a QLAC using funds from a qualified account (IRA, 401k, etc.) is a legitimate way to decrease your RMD. For example, a person could purchase a $200k QLAC at age 62 and specify that the annuitization payments will turn on at age 80. Once this person’s RMD’s start at say 72, the $200k is not included in the total IRA balance calculation for the RMD. In addition, once the lifetime income payments “turn on” at age 80, the monthly annuity payment you receive satisfies the RMD for that portion of your IRA assets.

There are downsides to a QLAC, just like any financial vehicle. For example, one downside is that it is an irrevocable contract—you can’t change your mind and pull out your money once a QLAC is purchased.

Thanks again Stinky for this excellent thread!
Best,
Atticus713

[dante56]

Oxford Life Science customer portal has been down for several days. Phone rep said that work is being done on it and it might be back up today. No other details. Hopefully the website has not been hacked and it is not a ransomware situation.

[Bronco Billy]

Whats the best 5 yr annuity out there? I noticed FIDO has a USAA 5yr for 4.7%

[Stinky]

Whats the best 5 yr annuity out there? I noticed FIDO has a USAA 5yr for 4.7%

Go to Blueprint Income, Stan the Annuity Man, or Annuity Advantage for many rates higher than that, albeit from lower-rated companies.

A relatively attractive rate to me right now on a 5 year product is SBLI (rated A by AM Best), paying 5.60% for a deposit of $100,000 or more.

[hoops777]

Hi Stinky.
Blueprint currently has Reliance Standard and Mass Mutual Ascencion A++ at 5.2 and 5.15.

Going out 5 years is it worth it to go with either of these for a slightly lower rate than someone like Americo?

[suginami]

Hi Stinky.
Blueprint currently has Reliance Standard and Mass Mutual Ascencion A++ at 5.2 and 5.15.

Going out 5 years is it worth it to go with either of these for a slightly lower rate than someone like Americo?

Based on my poor experience with Sentinel, I went with Reliance Standard at 5.2% for 5 years. My journey with B++ companies is over.

[Bronco Billy]

Thanks for all the replys. I just got out of the hospital and just thought with would try to lock in some money on a fixed rate. I was going to use some IRA cash to buy the annuity. THEN my i Remembered i moved most everything to Fido including my IRA funds. I did this to make it easier for my wife and know I am probably stuck going with Fido annuity 5 yr for 4.7%. I did call and email my Fido advisor wanting to look at buying an annuity and still waiting.

Thanks again I just love the annuity section of the Bogleheads... and of course STINKY!!

[Chogy]

THEN my i Remembered i moved most everything to Fido including my IRA funds. I did this to make it easier for my wife and know I am probably stuck going with Fido annuity 5 yr for 4.7%. I did call and email my Fido advisor wanting to look at buying an annuity and still waiting.

Interesting timing. Hopefully your guy will get back to you.

Yesterday I emailed my Fido advisor guy to discuss Fidelity's MYGA products, which are all A+ or better. He called within 3 hours. We discussed a plan to purchase 3 MYGA of 3, 4, 5 years. Despite the lower yields, the annuities would remain "resident" within the Fidelity system, and maintenance, withdrawals, 1035, etc, would be handled in-house, as line items within our portfolio. And all A+ or A++ rated.

So, rather than having 3 annuities floating in the ether, with lesser credit and customer service, we are leaning strongly towards these Fido products.

[jhblegend]

While undeniably true, the ultimate truth is insurance products are sold, and not bought. Thus those distributors are considered a necessary evil.

It's easy for me to agree with your POV for most annuities, but MYGA ? Are bank Certificate of Deposits 'sold and not bought' ?

No, I agree CDs are generally bought. Even though MYGAs should be viewed as comparable (arguably better with tax deferral), I think many consumers hear the word "annuity" in it and immediately go into fight or flight mode. Not saying I agree, in fact I strongly disagree, but I believe that is how the average consumer thinks.

[Bronco Billy]

THEN my i Remembered i moved most everything to Fido including my IRA funds. I did this to make it easier for my wife and know I am probably stuck going with Fido annuity 5 yr for 4.7%. I did call and email my Fido advisor wanting to look at buying an annuity and still waiting.

Interesting timing. Hopefully your guy will get back to you.

Yesterday I emailed my Fido advisor guy to discuss Fidelity's MYGA products, which are all A+ or better. He called within 3 hours. We discussed a plan to purchase 3 MYGA of 3, 4, 5 years. Despite the lower yields, the annuities would remain "resident" within the Fidelity system, and maintenance, withdrawals, 1035, etc, would be handled in-house, as line items within our portfolio. And all A+ or A++ rated.

So, rather than having 3 annuities floating in the ether, with lesser credit and customer service, we are leaning strongly towards these Fido products.

Thanks Chogy for that reply. after 24 hours i got an email today saying maybe she could call me about the annuity. I feel she just pushed me off again. Right now i am Pretty Pi$$ed with Fido. I am looking a the USAA annuity for 5 years.

[Chogy]

Thanks Chogy for that reply. after 24 hours i got an email today saying maybe she could call me about the annuity. I feel she just pushed me off again. Right now i am Pretty Pi$$ed with Fido. I am looking a the USAA annuity for 5 years.

Fidelity advisors seem to come in two flavors... very good, or slack. Seems like you got the latter. I've been pleased with mine. Swap her out?

The USAA 5 year went from 4.90% (I have that on a 8 march spreadsheet I made) to 4.70% as of today. The 10YR treasury dropped something like 80 basis points yesterday, which may have triggered some MYGA rate reductions.

I know timing the market is foolishness, but I just can't help myself. That yield difference over 5 years is not small. A dumb part of me whispers like a little cartoon shoulder devil... "Wait. Just waaaait. Yields will rise. Lock in that higher yield next week!"

[cashmoney]

Whats the best 5 yr annuity out there? I noticed FIDO has a USAA 5yr for 4.7%

Go to Blueprint Income, Stan the Annuity Man, or Annuity Advantage for many rates higher than that, albeit from lower-rated companies.

A relatively attractive rate to me right now on a 5 year product is SBLI (rated A by AM Best), paying 5.60% for a deposit of $100,000 or more.

Ever heard of this one Knightshead? it recently showed up on annuity rate watch - i know nothing about it. look's like a new company. A- 5 yr 6.55 simple 5.83 compound equivalent

https://www.knightheadlife.com/wp-conte ... -Guide.pdf

[Stinky]

Ever heard of this one Knightshead? it recently showed up on annuity rate watch - i know nothing about it. look's like a new company. A- 5 yr 6.55 simple 5.83 compound equivalent

https://www.knightheadlife.com/wp-conte ... -Guide.pdf

I have not heard of Knighthead Life. But I googled their website. It looks like they plan to sell through advisors of some type, rather than direct. https://www.knightheadlife.com/

The underwriting company is Merit Life insurance company. My former employer had a relationship with Merit Life several decades ago, but I expect that the company has totally changed since then.

With such broad licenses in about 45 states, I wonder if we’ll see them appear on platforms soon.

[cashmoney]

Ever heard of this one Knightshead? it recently showed up on annuity rate watch - i know nothing about it. look's like a new company. A- 5 yr 6.55 simple 5.83 compound equivalent

https://www.knightheadlife.com/wp-conte ... -Guide.pdf

I have not heard of Knighthead Life. But I googled their website. It looks like they plan to sell through advisors of some type, rather than direct. https://www.knightheadlife.com/

The underwriting company is Merit Life insurance company. My former employer had a relationship with Merit Life several decades ago, but I expect that the company has totally changed since then.

With such broad licenses in about 45 states, I wonder if we’ll see them appear on platforms soon.

i just checked again and Knighthead has enabled brokers/agents to market it and electronically enroll using firelight e app platform so Stan the Man and others should have it available. The products inception date is 12/2/2024 so that maybe why they are not on all the platforms yet.

[indexfundfan]

Hi Stinky.
Blueprint currently has Reliance Standard and Mass Mutual Ascencion A++ at 5.2 and 5.15.

Going out 5 years is it worth it to go with either of these for a slightly lower rate than someone like Americo?

From my many prior experiences, Americo has very long processing time for withdrawals.

The most recent experience being two week ago when I submitted a partial withdrawal request. Seeing that there is no movement, I called them today. And they said it takes 20 business days (!) to process such a request.

My Americo policies are reaching the end of their initial guarantee period this year and next. I am looking forward to be rid of Americo.

[EvelynTroy]

Noticed this evening that Knighthead MYGAs - Rating A- (they were mentioned up-thread) are being offered @ Blueprint Income.
There are 2 different rate bands:
$10,000 - $99,999
$100,000 - $2,000,000
Investment amounts in higher bands receive higher rates.

They are issuing 3 yr. 5.65% , 5 yr. 6.30% and 7 yr. 6.55% (simple interest)
They have a withdrawal rider - If elected, your policy's interest rate will be reduced by 0.20%.
Rates above are at the less than $100K band.

I'd be interested in your thoughts about these considering it's a new company.
I would like to purchase a MYGA - starting to shop. Thanks for the heads-up about Americo being slow to process withdrawals - I have one due 11/2025.
Evelyn

[gunny]

Wow that's tempting as hell.....thanks for the info. Although if they're new, I'm curious how they merited an A- rating already?

Edit: I see they're based in the Cayman Islands. Maybe it shouldn't, but that caused my stomach to tighten a little

[Stinky]

Noticed this evening that Knighthead MYGAs - Rating A- (they were mentioned up-thread) are being offered @ Blueprint Income.
There are 2 different rate bands:
$10,000 - $99,999
$100,000 - $2,000,000
Investment amounts in higher bands receive higher rates.

They are issuing 3 yr. 5.65% , 5 yr. 6.30% and 7 yr. 6.55% (simple interest)
They have a withdrawal rider - If elected, your policy's interest rate will be reduced by 0.20%.
Rates above are at the less than $100K band.

I'd be interested in your thoughts about these considering it's a new company.
I would like to purchase a MYGA - starting to shop. Thanks for the heads-up about Americo being slow to process withdrawals - I have one due 11/2025.
Evelyn

I have two types of comments - a general comment about new entrants into the MYGA market, and a specific comment about this company’s product

New entrants into MYGA market
I've been watching the MYGA market closely for almost 5 years now, and have seen a few companies with A- ratings from AM Best enter the market for the first time. Two such companies, from which I've purchased MYGAs, are Pacific Guardian and AmFirst. Both companies had established positions in other businesses, but had not previously sold MYGAs. I was one of the "first purchasers" from both companies when their MYGAs became available. Their service so far has been fine. The only negative I'll cite is that neither company initially had a customer-facing website where you could view your policy values. Pacific Guardian's website became active about one year after they entered the MYGA market; AmFirst, which has been in the market for about eight months now, still does not have a website. I have no idea whether Knighthead has a customer-facing website - you could ask.

Here's the most recent press release from AM Best, upgrading Merit Life (whose marketing name is Knighthead Life) to a rating to A-. https://news.ambest.com/newscontent.aspx?refnum=262018

Comment about Knighthead Life's products
Knighthead is one of only two companies (Ibexis being the other) that credits "simple" interest. For example, if you were to deposit $100,000 into a five year MYGA at a 6% simple interest rate, and did not withdraw any money, you would be credited $6,000 in interest per year. All other MYGA writers use "compound" interest, where the interest amount would grow each year as the policy value grows.

In my view, a "simple interest" product is most appropriate for someone who wants to withdraw from the policy, rather than letting it accumulate. For example, someone who wants a monthly check for the interest earned.

However, the "base rate" for Knighthead allows for no withdrawals. A rider allowing 10% withdrawals is available, which will reduce your credited rate by 0.20%.

To my mind, it's somewhat silly to advertise a "simple interest" rate for a policy that doesn't allow for withdrawals. In my view, Knighthead should include the withdrawal rider on all policies, and reduce its advertised rates by 0.20%.

If you're interested in this product, check with the agent to see if the withdrawal rider allows for free partial withdrawals during the first policy year. Both the company website and the Blueprint Income site are silent on this issue. Also, check to see if monthly interest withdrawals are available, or if you're limited to taking one withdrawal per policy year.

[Stinky]

Wow that's tempting as hell.....thanks for the info. Although if they're new, I'm curious how they merited an A- rating already?

Edit: I see they're based in the Cayman Islands. Maybe it shouldn't, but that caused my stomach to tighten a little

Per the AM Best press release referenced in my prior post, Merit Life is incorporated in North Carolina.