Our American Equity AssetShield Bonus 10 Review
The American Equity AssetShield Bonus 10 is a fixed indexed annuity designed for long-term accumulation. It protects principal from direct stock-market losses, provides a first-year premium bonus, and offers fixed and index-linked interest-crediting strategies.
The product does not include a guaranteed lifetime withdrawal benefit. It is intended for someone seeking protected growth, not someone who needs the annuity to create a contractual retirement paycheck for life.
Our Professional Opinion on the American Equity AssetShield Bonus 10 Annuity
We recommend considering the American Equity AssetShield Bonus 10 when the buyer specifically needs a premium bonus and can commit to the full 10-year contract. The bonus is competitive enough to matter, but it is not automatically the best bonus available, and the product gives up some accumulation potential in exchange for that upfront value.
That is the main tradeoff. Bonus annuities generally have lower caps, participation rates, trigger rates, or fixed rates than comparable non-bonus annuities. American Equity’s own product materials warn that crediting terms may be lower in a contract with a premium bonus.
Do not choose AssetShield Bonus 10 simply because the bonus makes the first-year contract value look larger. Compare the upfront bonus with the growth potential you may be giving up over the next decade.
The bonus can be useful when it solves a real problem. For example, it may help offset an existing surrender charge on an older annuity, restore part of the value lost during a market decline, or provide an immediate increase in contract value for someone who expects to hold the annuity through the entire vesting period.
If you do not need the bonus for a specific purpose, we would compare this product against non-bonus FIAs and other leading fixed indexed annuities for safe accumulation. A smaller or nonexistent bonus can be worth accepting when the ongoing cap or participation rate is materially stronger.
Our biggest problem with AssetShield Bonus 10 is the Performance Rate Rider. The rider lets you pay a strategy fee for a higher cap or participation rate on selected crediting strategies, including certain traditional S&P 500 strategies.
That sounds reasonable until you examine the renewal risk. American Equity can change the cap or participation rate at the end of a strategy term. The rider fee can remain in place while the amount of additional upside being purchased can change.
In plain English, you are paying to rent a higher cap rather than locking it in. We do not love that. If the insurer lowers the cap at renewal, you may continue paying a fee for less upside than you expected when you bought the contract.
The fee is also deducted after a negative strategy term. American Equity does provide a protection at the end of the surrender period: if total rider fees exceed the interest earned by the rider strategies, the difference is added back to the contract value. That feature is better than having no protection at all, but it does not compensate you for lost time, lost opportunity, or weak accumulation along the way.
We would only consider the Performance Rate Rider when the current increase in the cap or participation rate is large enough to justify the fee for that specific strategy term. We would not build a 10-year accumulation plan around the assumption that American Equity will keep the enhanced rate equally attractive at every renewal.
For someone who wants predictable upside terms, we prefer a true cap lock, a participation-rate guarantee on a transparent index, or a MYGA with a contractual fixed rate. Our overview of annuities designed to reduce renewal-rate risk explains those alternatives.
The current index menu is broader than the old review suggested. AssetShield Bonus 10 offers true S&P 500, Nasdaq-100, and Dow Jones Industrial Average strategies in addition to several proprietary and volatility-controlled indexes.
We like having traditional indexes available. However, the strongest-looking headline participation rates are often attached to engineered indexes or to strategies that charge a fee. A large participation rate on a proprietary index cannot be compared directly with the same participation rate on the traditional S&P 500.
The fixed account is also a one-year declared-rate strategy. The rate can change annually, so it should not be confused with a multi-year guaranteed annuity. If the plan is to place most of the money in the fixed account, compare current fixed annuity rates before purchasing this FIA.
We do like the no-fee Enhanced Benefit Rider. It can provide a one-time withdrawal of the contract value after the applicable waiting period for qualifying nursing-home confinement or terminal illness. That is a useful liquidity feature, although it is not a replacement for long-term care planning.
Our bottom line is that AssetShield Bonus 10 can be a good bonus accumulation annuity for a buyer who needs the bonus, understands the 10-year vesting schedule, and accepts renewal-rate risk. We would not buy it merely because the bonus looks good, and we generally do not like paying a recurring strategy fee for a cap or participation rate that American Equity can change later.
Compare AssetShield Bonus 10 With Today’s Best Fixed Indexed Annuities
The strongest accumulation annuity can change as insurers adjust bonuses, caps, participation rates, liquidity, and surrender terms.
What We Like
- Competitive Premium Bonus: The upfront bonus can solve a legitimate replacement or recovery need when the buyer intends to hold the contract long enough for the bonus to vest.
- Traditional Index Choices: The product includes true S&P 500, Nasdaq-100, and Dow Jones Industrial Average strategies.
- Several Crediting Methods: Available methods include caps, participation rates, and performance triggers.
- Principal Protection: Negative index performance does not directly reduce the contract value.
- Flexible Premiums: Additional premiums may be accepted under the contract rules.
- Annual Liquidity After Year One: The contract generally allows penalty-free withdrawals of a portion of contract value beginning in the second year.
- No-Fee Enhanced Benefit Rider: Qualifying nursing-home confinement or terminal illness can provide additional access to the contract value.
- Bonus Vests at Death: If the owner dies during the vesting period, the bonus becomes fully vested for purposes of the contract death benefit.
- Strong Insurance Company: American Equity meets our A- or better financial-strength requirement.
What We Don’t Like
- Performance Rate Rider Fee: You pay a fee for higher crediting terms, and the fee is deducted even after a negative strategy term.
- The Enhanced Rate Is Not Locked: American Equity can change caps and participation rates at future renewals.
- Bonus Products Usually Have Lower Rates: The upfront bonus can come at the cost of weaker long-term accumulation potential.
- 10-Year Bonus Vesting: The bonus is not fully available in the surrender value until the vesting schedule is completed.
- Engineered Index Complexity: Several strategies use proprietary, volatility-controlled, or excess-return indexes.
- Fixed Rate Can Change Annually: The fixed account is not a MYGA and does not lock the rate for the surrender period.
- No Guaranteed Lifetime Withdrawal Benefit: The product is not designed to provide flexible guaranteed income for life.
- No Return of Premium Feature: Early surrender can result in receiving less than the original premium.
- Long Surrender Period: The product requires a decade-long commitment to receive the full benefit of the bonus vesting schedule.
American Equity AssetShield Bonus 10 Product Details
| Product Type | Flexible Premium Fixed Indexed Annuity |
| Primary Purpose | Long-Term Protected Accumulation |
| Surrender Period | 10 Years |
| Minimum Initial Premium | $5,000 |
| Issue Ages | Generally ages 18 through 80 |
| Flexible Premium | Additional premium may be accepted under the contract provisions |
| Premium Bonus | Applied to eligible first-year premium and vested over the surrender period |
| Performance Rate Rider | Optional, strategy-specific fee in exchange for higher caps or participation rates |
| Standard Free Withdrawals | Interest-only access from the fixed account in year one; annual penalty-free access to a portion of contract value beginning in year two |
| Market Value Adjustment | Yes |
| Return of Premium | No |
| Enhanced Benefit Rider | No-fee nursing-home and terminal-illness benefit for eligible owners |
| Death Benefit | Generally the greater applicable value under the contract, with the premium bonus fully vested at death |
| Guaranteed Lifetime Withdrawal Benefit | Not Available |
American Equity is a good annuity company. Current product materials list A financial-strength ratings from AM Best, Fitch, and Standard & Poor’s. That comfortably meets our A- minimum for an annuity recommendation. Our concerns with AssetShield Bonus 10 are about the tradeoff between the bonus and future growth, the changeable renewal rates, and the optional strategy fees—not the financial strength of the issuing company.
How the Premium Bonus Works
The premium bonus is credited to eligible premium received during the first contract year. It increases the contract value immediately, but the bonus vests gradually over the 10-year surrender period.
Free withdrawals do not reduce bonus vesting under the current contract provisions. A withdrawal above the free amount or a full surrender can cause unvested bonus value to be lost.
The bonus is not free money. It is part of a long-term contract design that can include lower crediting terms, a vesting schedule, surrender charges, and an MVA.
We like bonuses when they solve a specific problem. We do not like using a bonus as the sole reason to purchase an annuity.
How the Performance Rate Rider Works
The Performance Rate Rider is attached to selected index-crediting strategies rather than the entire contract. In exchange for a fee, American Equity provides a higher cap or participation rate for the applicable strategy term.
The fee is calculated using the strategy value at the beginning of the term and deducted at the end of the strategy term. If the index has a negative result, the fee can still reduce the contract value.
At the end of the surrender period, American Equity compares the total rider fees paid with the interest earned on the rider strategies. If the fees exceed that interest, the difference is added back to the contract value.
That protection does not turn the Performance Rate Rider into a cap lock. The fee may be fixed for the surrender period, but the enhanced cap or participation rate can change when the strategy renews.
We would compare the fee-based strategy against the no-fee version every year. If the additional cap or participation rate is not substantial enough to justify the charge, we would not pay the fee.
AssetShield Bonus 10 vs. the EBLR Version
The standard AssetShield Bonus 10 provides the base premium bonus and standard liquidity without an annual EBLR charge.
The EBLR version replaces the standard bonus with a larger bonus and adds limited first-year liquidity plus a larger annual free-withdrawal allowance beginning in year two. In exchange, the rider charges an annual fee against contract value during the rider-charge period.
We prefer the standard version when the buyer does not need the extra liquidity or larger bonus. There is no reason to pay a contract-level annual rider fee for benefits you are unlikely to use.
We prefer the EBLR version only when the enhanced bonus or liquidity solves a specific planning need, and the value is expected to exceed the rider cost.
Index-Crediting Strategies
AssetShield Bonus 10 currently offers a mixture of traditional and engineered indexes. Traditional choices include the true S&P 500, Nasdaq-100, and Dow Jones Industrial Average.
Other choices include proprietary, technology-focused, volatility-controlled, and excess-return indexes from BlackRock, BNP Paribas, Nasdaq, NYSE, and S&P.
Crediting methods can include:
- Annual point-to-point with a cap
- Annual point-to-point with a participation rate
- Performance-trigger strategies
- Two-year point-to-point strategies
- Monthly point-to-point and monthly-sum strategies
- A one-year fixed account
We generally prefer one-year strategies and traditional indexes when the economics are competitive. We do not select an engineered index merely because the headline participation rate is larger.
Before choosing a strategy, review the cap and participation-rate mechanics, index launch date, live history, volatility controls, excess-return deductions, strategy term, and any additional fee.
Liquidity and Health-Related Access
During the first contract year, standard liquidity is limited. Interest-only withdrawals from the fixed account may be available after the applicable waiting period.
Beginning in the second year, the owner can generally take an annual penalty-free withdrawal based on contract value. Unused free withdrawals do not accumulate.
Withdrawals above the free amount can be subject to surrender charges, loss of unvested bonus value, and a Market Value Adjustment.
The no-fee Enhanced Benefit Rider can provide a one-time withdrawal of up to the available contract value after the applicable waiting period for qualifying nursing-home confinement or terminal illness.
Buyers who place a high priority on access should compare the best annuities for liquidity before committing to a decade-long contract.
Death Benefit and Bonus Vesting
The standard death benefit is generally based on the applicable contract value or guaranteed minimum value under the contract. The bonus becomes fully vested at death, and surrender charges do not apply to the death benefit.
A surviving spouse may be able to continue the contract through spousal continuation.
This is useful, but it is not an enhanced death-benefit multiplier. Buyers whose primary goal is maximizing an inheritance should compare the best annuities for enhanced death benefits and traditional life insurance.
Who Should Consider AssetShield Bonus 10?
- Someone Who Needs a Bonus: The bonus helps solve a specific replacement, surrender-charge, or recovery need.
- Someone Seeking Protected Accumulation: You want growth potential without direct stock-market losses.
- Someone With a 10-Year Time Horizon: You can leave the money in place long enough for the bonus to vest.
- Someone Who Values Traditional Index Choices: You want access to the true S&P 500, Nasdaq-100, or Dow Jones Industrial Average.
- Someone With Adequate Liquidity Elsewhere: You do not expect to need substantial early withdrawals.
- Someone Repositioning Retirement Assets: The contract can accept eligible IRA, Roth IRA, 1035 exchange, and nonqualified funds under the applicable rules.
Who Should Probably Buy Something Else?
- Someone Seeking Guaranteed Lifetime Income: The product does not include a GLWB.
- Someone Who Wants a Cap Lock: The fee-based higher caps and participation rates can still change at renewal.
- Someone Who Does Not Need a Bonus: A non-bonus FIA may provide better long-term accumulation potential.
- Someone Who May Exit Early: Bonus vesting, surrender charges, and MVA can make early surrender expensive.
- Someone Who Needs Return-of-Premium Protection: The product does not include a contractual return-of-premium feature.
- Someone Wanting a Guaranteed Fixed Rate: A MYGA may be simpler and more predictable than an annually reset fixed account.
What Happens After the Surrender Period?
Once the surrender period ends, the owner can generally withdraw the contract value without the original surrender charge, continue tax-deferred growth, or transfer the contract through an eligible exchange.
The owner can also choose an annuitization option, but annuitization is generally irreversible and is not the same as owning a flexible lifetime-income rider.
Nonqualified funds can continue receiving tax-deferred growth as long as the contract remains in force.
What We Recommend
We recommend AssetShield Bonus 10 only when the bonus serves a specific purpose and the buyer understands that the product may provide less growth than a non-bonus FIA.
We would normally avoid the Performance Rate Rider unless the current increase in the cap or participation rate is compelling enough to justify the fee for that strategy term. We do not like paying an ongoing fee for a higher rate that the insurance company can change at renewal.
Before purchasing, compare the standard AssetShield Bonus 10, the EBLR version, non-bonus FIAs, cap-lock products, and MYGAs. The right answer depends on whether your priority is the upfront bonus, ongoing growth, liquidity, or a guaranteed fixed return.
Contact The Annuity Expert for free annuity quotes and a no-obligation side-by-side comparison.
Book A Free Consultation
Get help from a licensed financial professional. This service is free of charge.
Let Us Answer Your Questions
Not quite ready for a meeting, but you have a question that needs answering? We’re happy to help. Leave an inquiry below, and one of our staff will respond via email.