A bonus annuity is a type of annuity that pays out an additional sum of money, or bonus, at some point now or in the future. This bonus can be a set amount of money, or it can be a percentage of the original investment. In this guide, we will discuss how bonus annuities work and how you can benefit from them!
How Does A Bonus Annuity Work?
Bonus annuities work by giving the policyholder an additional sum of money, or bonus, either immediately or in the future. This bonus can be a set amount of money or a percentage of the original investment.
For example, if you invest $100 in a bonus annuity, you may receive an additional $20 bonus for every contribution to the contract.
The purpose of a bonus annuity is to encourage policyholders to keep their money invested for a longer period of time. By offering a bonus, annuity providers can offer higher payouts than traditional annuities.
What Are The Benefits Of A Bonus Annuity?
Several benefits come with investing in a bonus annuity.
- Policyholders can receive a higher rate of return on their investment.
- Bonus annuities are often more flexible than traditional annuities, allowing policyholders to withdraw their money earlier if they need to.
- Bonus annuities can provide peace of mind, knowing that you will receive a bonus at some point in the future.
- Annuity owners wanting to replace their current annuity with a new one can use a bonus to offset any surrender charges applied for prematurely canceling the annuity.
What Are The Drawbacks Of Bonus Annuities?
- The upside potential may be lower than an annuity without a bonus.
- The bonus may not be fully vested until years after the annuity’s surrender charge period.
The Best Annuities With A Premium Bonus
So you’re looking for annuities with a premium bonus? Well, look no further. Below is an ever-growing list of bonus annuity products that offer a real premium bonus when you open up a retirement plan.
Now with that said, be careful.
Always check the rates to ensure you have the best opportunity to grow your retirement savings. A bonus today may make you happy now, but in the future, it may not.
What Is A Bonus Annuity?
A bonus annuity is an annuity that provides a bonus as an incentive to purchase the contract. The bonus is based on the initial purchase amount and often has vesting schedules, meaning the bonus is credited on day 1, earns interest on day 1, but vests over the entirety of the contract. Suppose the annuity is canceled before the contract term is complete. In that case, the bonus is pro-rated based on the amount of time in the contract before surrendering, canceling, or transferring away.
Ideal Scenarios To Purchase Bonus Annuities
- Making up for losses (market volatility)
- Replacing one annuity contract for another (offsetting surrender charges)
- Increase your lifetime income payments.
Bonus Annuity Rates
| Annuity | Length | Rating | Bonus (Up To) |
|---|---|---|---|
| American Select Bonus Plus | 10 years | B++ | 16% |
| Athene Performance Elite PLUS 15 | 15 years | A | 20% |
| Athene BCA 12 2.0 | 12 Years | A | 14% |
| American Select 7 Series Bonus Plus | 7 years | B++ | 11% |
| Athene Performance Elite 10 Plus | 10 years | A | 16% |
| North American Secure Horizon Plus | 10 years | A+ | 15% |
| Equitrust MarketPower Bonus | 14 years | B++ | 10% |
| Midland IndexBuilder 14 | 14 years | A+ | 11% |
| F&G Performance Pro | 10 years | A- | 15% |
| Athene Performance Elite 15 | 15 years | A | 15% |
| Athene Performance Elite 10 | 10 years | A | 10% |
| North American Charter Plus 14 | 14 years | A+ | 10% |
| Athene BCA 10 2.0 | 10 years | A | 12% |
| Midland IndexBuilder 10 | 10 years | A+ | 7% |
| Americo LibertyMark 10 Plus | 10 years | A | 7% |
| North American Charter Plus 10 | 10 years | A+ | 8% |
| Athene Performance Elite 7 Plus | 7 years | A | 6% |
| Athene BCA 8 2.0 | 8 years | A | 6% |
| Fidelity & Guaranty Accelerator Plus 10 | 10 years | A- | 5% |
| Fidelity & Guaranty Prosperity Elite 7 | 7 years | A- | 4% |
| Americo ClassicMark 10 Plus | 10 years | A | 4% |
| AIG Power Select Builder 8 | 8 years | A | 10% |
| American Select 10 Series Bonus | 10 years | B++ | 10% |
| American Select 7 Series Bonus | 7 Years | B++ | 7% |
Next Steps
Bonus annuities can be a great way to grow your retirement savings. They can provide an extra income boost when you need it the most. Additionally, bonus annuities can help you keep pace with inflation.
There are a few things to consider before investing in a bonus annuity. Make sure to do your research and contact us to see if a bonus annuity is right for you.
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