RateShield 7 from American Equity is a flexible-premium fixed deferred annuity that offers a 1-year guarantee, and a 7-year surrender charge duration. There’s also a provision for Market Value Adjustment (MVA), and an optional Lifetime Income Rider that comes at an extra cost.
Rate guarantees
Your annuity is credited with a first-year fixed interest rate, guaranteed by the company for one year.
After the initial premium, additional premium payments can be made with approval from the company any time before the maturity date. The interest rate applicable on the date additional premiums are made might be different from the interest paid on your initial premium.
Surrender values and charges
With RateShield 7 from American Equity, your surrender value never goes below 87.5% of your premiums, less withdrawals, and accumulated at the MGIR (Minimum Guaranteed Interest Rate). If you make a partial withdrawal or surrender your annuity within the surrender charge duration, a deduction is made according to the surrender charge schedule.
Surrender Charge Schedule – American Equity RateShield 7
| Contract Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8+ |
| Surrender Charge Percentage | 9.20 | 9.20 | 8.20 | 7.20 | 6.20 | 5.20 | 4.10 | 0 |
Annuity features
- Free withdrawals – each year after the first year, you’ve got the opportunity to make free withdrawals up to 10%.
- Partial withdrawals – partial withdrawals can be made at any time, and withdrawal charges are applied to the free withdrawal amount.
- Nursing care rider – the annuity’s NCR-100 rider allows annuitants to withdraw 100% of their contract value (Penalty-free) if they’re confined to a nursing home for over 90 consecutive days after the 3rd contract year. If they are confined within the 2nd or 3rd year, a 20% penalty-free withdrawal is permitted.
- Terminal illness rider – American Equity’s TIR-100 rider allows annuity owners to get 100% of their Contract Value back (and penalty-free) if they’re diagnosed with a terminal disease after the 1st contract year.
- Death benefit – no surrender charges are imposed on the death benefit, which is paid out to named beneficiaries of the annuitant. The death benefit is usually paid out in lump sum, but other income options are available.
