AssetShield Bonus 10 With EBLR Annuity Review
The American Equity AssetShield Bonus 10 with Enhanced Bonus and Liquidity Rider, or EBLR, is a fixed indexed annuity designed for long-term accumulation. The EBLR replaces the standard premium bonus with a larger bonus and adds more penalty-free liquidity in exchange for an annual rider charge.
The product also offers an optional Performance Rate Rider on selected index strategies. That creates two separate fee decisions: whether to pay for the enhanced bonus and liquidity, and whether to pay another strategy fee for a higher cap or participation rate.
Our Professional Opinion on the American Equity AssetShield Bonus 10 With EBLR Annuity
We recommend considering the AssetShield Bonus 10 with EBLR only when the larger bonus and enhanced liquidity solve a specific planning need that is worth the annual rider cost.
The EBLR is not automatically better than the standard AssetShield Bonus 10. It gives the buyer a larger first-year premium bonus, limited penalty-free access during the first year, and a larger annual free-withdrawal allowance beginning in year two.
In exchange, American Equity deducts an annual EBLR charge from the contract value throughout the rider-charge period.
That means the extra bonus is not free. You are paying for the larger starting value and the additional liquidity every year during the rider period, whether or not you actually use the extra withdrawal feature.
We would use the EBLR version when one of two things is true:
- The larger bonus materially helps offset an existing annuity surrender charge, recent market loss, or another specific shortfall; or
- The buyer genuinely needs the first-year access or larger annual free-withdrawal allowance.
If neither benefit is important, we would normally use the standard AssetShield Bonus 10 or compare a non-bonus accumulation FIA. There is no reason to pay a contract-level annual fee for features you do not need.
The bonus still vests over the 10-year surrender period. The enhanced bonus is immediately reflected in contract value, but it is not fully available in the cash surrender value until the vesting schedule is completed. A surrender or excess withdrawal can cause unvested bonus value to be lost.
Our biggest concern becomes fee stacking when the buyer also chooses the Performance Rate Rider. The EBLR charges a contract-level annual fee, while the Performance Rate Rider charges a separate fee on selected index strategies in exchange for higher caps or participation rates.
We do not like paying a fee for a higher cap or participation rate when American Equity can change that rate at the end of the strategy term. The fee can remain while the extra upside being purchased changes.
You are paying for a temporary enhancement, not buying a cap lock. That stinks when the entire reason for paying the fee is to improve accumulation over a long contract.
The fee-based S&P 500 strategy may look attractive when the enhanced cap is materially higher than the no-fee cap. We would consider it for a specific strategy term only after comparing the additional upside with the rider fee.
We would not assume the same tradeoff will remain attractive next year. American Equity can reset the cap or participation rate at renewal, so the decision needs to be re-evaluated whenever the strategy renews.
The Performance Rate Rider fee can also be deducted after a negative strategy term. American Equity provides a protection at the end of the surrender period if cumulative fees exceed the interest earned on those strategies, but that protection does not reimburse lost time or guarantee that the strategy was a good use of the money.
If someone elects both EBLR and fee-based index strategies, we would look carefully at the total drag on contract value. A large bonus can make the product look great on day one, but annual rider charges and weaker bonus-product crediting terms can erode the advantage over the full 10-year period.
We like that the product includes the true S&P 500, Nasdaq-100, and Dow Jones Industrial Average in addition to engineered indexes. However, the most aggressive-looking participation rates are often attached to proprietary indexes or fee-based strategies.
We generally prefer one-year traditional index strategies when the economics are competitive. We do not choose a strategy simply because a manufactured index has a large participation rate or an impressive backtest.
The fixed account can reset annually, so it should not be confused with a MYGA. If the buyer expects to allocate heavily to the fixed account, compare current fixed annuity rates.
Our bottom line is that the EBLR version can make sense for someone who needs the larger bonus and extra liquidity, but it is not the automatic best version of AssetShield Bonus 10. We would avoid paying for EBLR without a specific need, and we generally do not like layering the Performance Rate Rider on top of it because the higher cap or participation rate can change at renewal.
Compare AssetShield Bonus 10 With Today’s Best Fixed Indexed Annuities
The right accumulation annuity depends on the value of the bonus, ongoing growth potential, liquidity, rider costs, surrender period, and insurer strength.
What We Like
- Larger Premium Bonus: The EBLR replaces the standard bonus with a larger first-year bonus.
- First-Year Liquidity: The rider provides limited penalty-free access during the first contract year.
- Larger Annual Free-Withdrawal Allowance: The rider increases the standard annual liquidity beginning in the second year.
- Traditional Index Choices: The product includes the true S&P 500, Nasdaq-100, and Dow Jones Industrial Average.
- Principal Protection: Negative index performance does not directly reduce the contract value.
- No-Fee Enhanced Benefit Rider: Qualifying nursing-home confinement or terminal illness can provide additional access to contract value.
- Bonus Vests at Death: The premium bonus becomes fully vested for the contract death benefit.
- Flexible Premiums: Additional premium may be accepted under the contract rules.
- Strong Insurance Company: American Equity meets our A- or better financial-strength standard.
What We Don’t Like
- Annual EBLR Charge: The larger bonus and extra liquidity are paid for through an annual charge against contract value.
- You Pay Even If You Never Use the Liquidity: The EBLR charge applies whether or not the buyer takes the additional withdrawals.
- Performance Rate Rider Adds Another Fee: Selecting fee-based index strategies creates a second layer of charges.
- The Higher Cap Is Not Locked: American Equity can change caps and participation rates when the strategy renews.
- Fee Applies After Negative Terms: The Performance Rate Rider can reduce contract value even when the selected index strategy earns no interest.
- Bonus Vesting Takes 10 Years: The enhanced bonus is not fully available in surrender value until the vesting schedule is completed.
- Bonus Product Rates Can Be Lower: The larger bonus can come at the expense of long-term growth potential.
- Engineered Index Complexity: Several strategies use proprietary, volatility-controlled, or excess-return indexes.
- 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 investment.
- Long Surrender Period: The product requires a decade-long commitment.
American Equity AssetShield Bonus 10 With EBLR Product Details
| Product Type | Flexible Premium Fixed Indexed Annuity |
| Primary Purpose | Long-Term Protected Accumulation With Enhanced Bonus and Liquidity |
| Surrender Period | 10 Years |
| Minimum Initial Premium | $5,000 |
| Issue Ages | Generally ages 18 through 80 |
| Enhanced Bonus and Liquidity Rider | Optional at issue; replaces the standard bonus and adds enhanced liquidity |
| EBLR Charge | Annual charge deducted from contract value during the rider-charge period |
| Bonus Vesting | Vests gradually over the 10-year surrender period and becomes fully vested at death |
| EBLR Liquidity | Limited first-year penalty-free access and a larger annual free-withdrawal allowance beginning in year two |
| Performance Rate Rider | Optional strategy-specific fee for higher caps or participation rates |
| 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 contract value, with the 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, which exceeds our A- minimum. Our concerns with the EBLR version are about the annual rider cost, bonus vesting, lower bonus-product crediting terms, and the ability to change fee-based caps and participation rates—not the insurer’s financial strength.
How the Enhanced Bonus and Liquidity Rider Works
The EBLR is elected when the annuity is purchased. It replaces the standard premium bonus with a larger bonus and changes the contract’s free-withdrawal provisions.
The larger bonus is credited to contract value at issue but remains subject to the same long-term vesting concept. It becomes fully vested in surrender value only after the vesting schedule is completed.
The rider also provides limited first-year liquidity and increases the annual penalty-free withdrawal amount beginning in the second contract year.
An annual rider charge is deducted from contract value during the rider-charge period. The fee is not refunded if the contract is surrendered early.
The EBLR should solve a real problem. A buyer who does not need the larger bonus or extra liquidity may be better served by the standard AssetShield Bonus 10 or a non-bonus accumulation FIA.
Why We Don’t Love the Performance Rate Rider
The Performance Rate Rider applies only to selected index strategies. It provides a higher cap or participation rate in exchange for a strategy fee.
The fee is based on the strategy value at the beginning of the term and deducted at the end of the term. It can be deducted even when the index strategy has a negative result and receives no indexed interest.
The rider fee is designed to remain the same during the surrender period, but the cap or participation rate can change at renewal.
That is the part we dislike. The buyer commits to paying for the rider structure, but American Equity does not commit to maintaining the same amount of additional upside for the entire 10 years.
American Equity does provide a cumulative fee-versus-interest protection at the end of the surrender period. If cumulative rider fees exceed the interest earned by the rider strategies, the difference is added back to contract value.
That protection limits one type of loss, but it does not make the strategy efficient. The money may still have spent years earning less than a no-fee strategy, a cap-lock FIA, or a MYGA.
We would review the fee-based and no-fee versions at every strategy renewal. If the additional upside is not clearly worth the charge, do not elect the fee-based strategy.
Standard AssetShield Bonus 10 vs. the EBLR Version
| Feature | Standard Bonus 10 | Bonus 10 With EBLR |
|---|---|---|
| Premium Bonus | Standard first-year bonus | Larger first-year bonus |
| Year-One Liquidity | Limited primarily to eligible interest withdrawals from the fixed account | Additional penalty-free access |
| Liquidity After Year One | Standard annual free-withdrawal allowance | Larger annual free-withdrawal allowance |
| Annual EBLR Charge | None | Yes, during the rider-charge period |
| Bonus Vesting | Gradual 10-year vesting | Gradual 10-year vesting |
| Best Fit | Buyer who wants the bonus but does not need enhanced liquidity | Buyer who specifically values the larger bonus and extra access |
We prefer the standard version when the buyer does not need the EBLR benefits. We prefer the EBLR version only when the enhanced bonus and liquidity are valuable enough to justify the annual fee.
Index-Crediting Strategies
AssetShield Bonus 10 offers true S&P 500, Nasdaq-100, and Dow Jones Industrial Average strategies along with several proprietary and volatility-controlled indexes.
Crediting choices include annual and multi-year point-to-point strategies, caps, participation rates, performance triggers, monthly strategies, and a one-year fixed account.
We generally prefer traditional indexes and one-year crediting periods when the economics are competitive. We are careful with engineered indexes because large headline participation rates can mask volatility controls, excess-return deductions, limited live history, and complicated methodology.
Review the cap and participation-rate rules, current rate sheet, index launch date, and strategy fee before selecting an allocation.
Liquidity and Health-Related Access
The main reason to pay for EBLR is liquidity. It provides some penalty-free access during the first year and a larger annual free-withdrawal allowance beginning in the second year.
Withdrawals above the applicable free amount can be subject to surrender charges, loss of unvested bonus value, and a Market Value Adjustment.
The separate no-fee Enhanced Benefit Rider can provide a one-time withdrawal of the available contract value after the applicable waiting period for qualifying nursing-home confinement or terminal illness.
These features improve access, but they do not replace dedicated long-term care planning.
Buyers who care most about access should compare the best annuities for liquidity before paying an annual rider charge.
Death Benefit and Bonus Vesting
The premium bonus becomes fully vested at death, and the contract death benefit is generally paid without the normal surrender charge.
A surviving spouse may be eligible for spousal continuation.
The contract provides a standard annuity death benefit rather than an enhanced multiplier. Buyers focused primarily on legacy planning should compare the best annuities for enhanced death benefits and life insurance.
Who Should Consider AssetShield Bonus 10 With EBLR?
- Someone Who Needs a Larger Bonus: The enhanced bonus solves a specific replacement, surrender-charge, or recovery need.
- Someone Who Needs First-Year Access: The additional liquidity has a realistic chance of being used.
- Someone Who Values a Larger Annual Withdrawal Allowance: The standard contract’s liquidity is not sufficient.
- Someone With a 10-Year Time Horizon: You can allow the bonus to vest and avoid excess withdrawals.
- Someone Seeking Protected Accumulation: You want index-linked interest potential without direct market losses.
- Someone Repositioning Retirement Assets: The product can accept eligible nonqualified funds, IRAs, Roth IRAs, and 1035 exchanges under the applicable rules.
Who Should Probably Buy Something Else?
- Someone Who Does Not Need Enhanced Liquidity: There is no reason to pay the EBLR fee for benefits you will not use.
- Someone Seeking Maximum Accumulation: A non-bonus FIA may provide stronger long-term growth potential.
- Someone Who Dislikes Fees: EBLR plus fee-based index strategies can create multiple layers of charges.
- Someone Seeking Guaranteed Lifetime Income: The product does not provide a flexible lifetime income rider.
- Someone Who Wants a Cap Lock: Paying the Performance Rate Rider does not guarantee the enhanced cap for the entire surrender period.
- Someone Who May Leave Early: Surrender charges, MVA, rider fees, and bonus vesting can make an early exit expensive.
- Someone Who Wants Return-of-Premium Protection: The contract does not include a return-of-premium feature.
What Happens After the Surrender Period?
After the surrender period ends, the original surrender charges and EBLR charge end under the current design. The owner can generally withdraw the contract value, continue tax-deferred growth, change available allocations, or complete an eligible exchange.
The contract also offers annuitization, but annuitization is generally irreversible and is not the same as owning a GLWB.
If the primary objective becomes guaranteed income, compare the transferable value against current income annuities rather than automatically annuitizing the contract.
What We Recommend
We recommend the AssetShield Bonus 10 with EBLR only when the larger bonus and enhanced liquidity are expected to provide more value than the annual rider cost.
We would not add EBLR merely because the illustrated bonus is larger. We would also avoid stacking the Performance Rate Rider on top of EBLR unless the current enhancement is compelling enough to justify the additional fee for that specific strategy term.
The bigger issue is that the higher fee-based cap or participation rate can change at renewal. We prefer a true cap lock or a no-fee strategy when the economics are close.
Before buying, compare the EBLR version against the standard AssetShield Bonus 10, non-bonus FIAs, cap-lock annuities, and MYGAs.
Contact The Annuity Expert for free annuity quotes and a no-obligation comparison.
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