American Equity’s Guarantee 5 is a single-premium, multi-year guaranteed annuity that offers a 5-year interest rate guarantee, a 5-year surrender charge duration, and a provision for Market Value Adjustment.
In the first year of your Guarantee 5 annuity from American Equity, your contract is credited with a fixed interest rate (which currently stands at 2.5%), which is guaranteed by American Equity for 5 years.
Once the selected Guarantee Period ends, you can renew your annuity for a new guaranteed interest period. During this renewal, the company establishes a new interest rate based on prevailing market conditions. The company has guaranteed that at no time will the effective interest rate be lower than 1%.
Depending on your financial goals and your circumstances, the company gives you 30 days (after the guarantee period ends) to choose the next course of action. You could make partial withdrawals and then renew the remaining funds for a new guarantee period, or surrender your annuity for its contract value. If you do not take action, the default procedure is to renew your annuity for a new guarantee period, which is done automatically by American Equity.