Our Professional Opinion on the American National Strategy Index Annuity
The American National Strategy Index can be a good fixed indexed annuity, but we would start with the 7-year version rather than automatically locking money up for 10 years. Both versions provide principal protection, flexible premiums, traditional index choices, optional lifetime income, and annual liquidity. The longer contract adds more index choices and accepts premium enhancements on new deposits for a longer period, but those features do not automatically justify three additional surrender years.
American National is a good annuity company. American National Insurance Company is rated A by AM Best and meets our A- minimum financial-strength standard. That is a solid rating, although several competing annuity companies are rated A+ or better.
For accumulation, the strongest part of the product is the true S&P 500 and Nasdaq-100 menu. We prefer those recognizable market indexes over the S&P MARC 5% and BNPP Patriot Technology strategies, which use volatility controls, fixed-income components, or other engineered rules that make the headline participation rate less meaningful.
The product’s premium enhancement is not free money. Strategy Index 7 applies enhancements to eligible deposits during the early contract years and can recapture part of an enhancement after an excess withdrawal or surrender. Strategy Index 10 can apply enhancements to eligible deposits for a longer period. Those bonuses need to be compared with the surrender restrictions, renewal rates, and growth potential available in a no-bonus FIA.
For guaranteed lifetime income, we prefer the fixed-rate Lifetime Income Rider over the fixed-rate-plus-index-credit version. The fixed-rate rider establishes a contractual growth rate for the Income Base and does not require future index performance to reach the illustrated benefit. The performance-based version can show more income in a favorable illustration, but the actual result depends partly on future index credits.
Both income riders charge a fee, and the Income Base is not cash. It is an accounting value used to calculate lifetime withdrawals. It cannot normally be surrendered as a lump sum, and it is not automatically the amount paid to beneficiaries.
The actual guaranteed payout still decides whether the income rider is worth buying. Compare the annual income using the same premium, age, state, income start date, and single- or joint-life structure. A high roll-up rate or a large illustrated Income Base does not guarantee the highest retirement paycheck.
Bottom line: Strategy Index 7 is the better starting point for most buyers. Use the contract primarily for protected accumulation when the traditional-index terms are competitive, or use the fixed-rate Lifetime Income Rider when its guaranteed payout is near the top of the market. Strategy Index 10 should provide a clear contractual advantage before you accept the longer surrender period.
What We Like
- 7- and 10-year choices: Buyers can select the surrender period that matches how long the money can remain in the contract.
- True S&P 500 and Nasdaq-100 options: The product includes familiar traditional market indexes in addition to proprietary choices.
- One-year crediting strategies: The owner is not forced to wait several years for every index result to be calculated.
- Flexible premiums: Additional money can be added after issue, subject to the contract’s premium and allocation rules.
- Low qualified-account minimum: The minimum initial premium is lower for qualified money than for nonqualified money.
- Fixed-rate income option: The optional rider can grow its Income Base at a contractual fixed rate for the stated accumulation period.
- Single- and joint-life income: Lifetime withdrawals can be structured around one owner or two spouses.
- Income can continue after the account reaches zero: When the rider rules are followed, lifetime payments continue after permitted withdrawals exhaust the annuity value.
- Annual penalty-free access: Up to the applicable annual withdrawal amount is generally available without a surrender charge, subject to contract provisions.
- Confinement, disability, and terminal-illness waivers: Qualifying events may provide additional access without normal surrender charges or an MVA.
- A-rated issuing company: American National meets our minimum financial-strength standard.
What We Don’t Like
- The premium enhancement is not free: The bonus economics can reduce growth potential, and Strategy Index 7 expressly recaptures enhancement value after certain excess withdrawals or surrender.
- Additional premiums create more complexity: New deposits may receive different enhancements, strategy terms, and crediting start dates than the original premium.
- Renewal-rate risk: Most caps, participation rates, and declared rates can change from one strategy term to the next.
- Engineered indexes: The S&P MARC 5% and BNPP Patriot Technology indexes are harder to evaluate than the S&P 500 or Nasdaq-100.
- Backtested illustrations can look better than live results: Hypothetical historical performance does not show how the index and renewal terms will perform after purchase.
- The income rider costs extra: The fee must be justified by a competitive guaranteed payout.
- Performance-based income can underdeliver: The fixed-rate-plus-index-credit rider may produce less income than illustrated when index credits are weak.
- New premiums do not receive the rider’s roll-up interest: Additional deposits increase the Income Base but do not earn the same Income Base interest.
- The Income Base is not cash: A large benefit value should not be presented as money available for surrender or inheritance.
- Market Value Adjustment: Excess withdrawals can be increased or reduced by changes in market interest rates.
- No contractual return of premium: An early surrender can return less than the original deposit after charges and a negative MVA.
- Strategy Index 10 is a long commitment: The insurer retains substantial control over future crediting terms during the surrender period.
What Is the American National Strategy Index Annuity?
The American National Strategy Index is a flexible-premium fixed indexed annuity issued by American National Insurance Company. It is offered in two contract lengths:
- Strategy Index 7: Seven-year surrender period.
- Strategy Index 10: Ten-year surrender period.
A fixed indexed annuity protects the contract value from direct stock-market losses while providing an opportunity to earn interest based partly on an external index. You do not own the stocks in the index, and index dividends are generally excluded from the interest calculation.
If an index declines during a crediting term, the applicable index strategy generally receives zero interest rather than a market loss. The contract value can still be reduced by withdrawals, surrender charges, a negative MVA, premium-enhancement recapture, and income-rider fees.
Strategy Index 7 Versus Strategy Index 10
| Feature | Strategy Index 7 | Strategy Index 10 |
|---|---|---|
| Surrender period | Seven years | Ten years |
| Issue ages | Generally 0–80 | Generally 0–80 |
| Premium type | Flexible premium | Flexible premium |
| Minimum initial premium | Generally $5,000 qualified and $10,000 nonqualified | Generally $5,000 qualified and $10,000 nonqualified |
| Traditional indexes | S&P 500 and Nasdaq-100 | S&P 500 and Nasdaq-100 |
| Engineered indexes | S&P MARC 5% | S&P MARC 5% and BNPP Patriot Technology |
| Premium-enhancement window | Eligible deposits during the first three years | Eligible deposits during the first seven years |
| Optional Lifetime Income Rider | Fixed rate or fixed rate plus index credit | Fixed rate or fixed rate plus index credit |
| Annual free withdrawal | Generally up to 10% of beginning-of-year annuity value | Generally up to 10% of beginning-of-year annuity value |
| Our preference | Better starting point for most buyers | Use only when the longer term creates a meaningful advantage |
The 10-year version offers more strategies and a longer premium-enhancement window. Those benefits matter only when they produce more net value than the shorter contract after renewal risk, and liquidity is considered.
How the Premium Enhancement Works
American National may add a premium enhancement to eligible deposits made during the contract’s enhancement window. The enhancement available to new money can change over time.
Strategy Index 7 applies an enhancement to eligible premiums made during the first three contract years. An excess withdrawal or surrender can trigger a recapture charge based on how long the specific premium has been in the contract. Newer deposits can therefore remain exposed to recapture after older money is more fully vested.
Strategy Index 10 extends the eligible deposit window through the first seven contract years. Before adding money late in the contract, verify the enhancement, surrender treatment, crediting terms, and the date on which the new premium becomes fully available.
Never compare these contracts solely by the bonus. Compare the projected annuity value, surrender value, traditional-index terms, renewal minimums, rider charges, and total restriction on every deposit.
How the Index Crediting Works
The Strategy Index family uses annual point-to-point formulas. The index value at the end of the term is compared with the value at the beginning, and the result is adjusted by a cap or participation rate.
Cap Strategy
A cap limits the maximum positive index change that can be credited. If the index gains more than the cap, the additional gain is not credited to the annuity.
Participation-Rate Strategy
A participation rate multiplies the positive index change. For example, a contract receiving a portion of the index gain will earn less than the index unless the participation rate is above 100%. A high participation rate on an engineered index does not necessarily produce a high return.
Declared-Rate Strategy
The declared-rate option earns a fixed interest rate for the applicable period. The rate can change when the period renews and should not be confused with a MYGA rate guaranteed for seven or ten years.
Traditional Index Choices
The S&P 500 and Nasdaq-100 are the easiest strategies to evaluate because they are widely followed indexes with long public histories.
Both versions offer an S&P 500 uncapped strategy using a participation rate and an S&P 500 cap strategy. Strategy Index 10 also offers an enhanced S&P 500 cap strategy with a maximum allocation limit.
We generally prefer the annual S&P 500 point-to-point choices. They are transparent, easy to explain, and do not depend on a manufactured volatility-control methodology.
Engineered Index Choices
S&P MARC 5% Index
The S&P MARC 5% Index is a multi-asset, volatility-controlled index. It can allocate among equities, fixed income, and commodities while targeting a specified volatility level.
Volatility control can reduce losses, but it can also reduce equity exposure before a market recovery. A high participation rate should not be mistaken for a high expected return.
BNPP Patriot Technology Index
The BNPP Patriot Technology Index is available on Strategy Index 10. It combines selected U.S. large- and mid-cap stocks with money-market instruments and bond futures as part of its risk-control methodology.
The index may be marketed using an uncapped participation-rate strategy, but “uncapped” does not mean the annuity receives the full return of technology stocks. The result still depends on the index methodology, risk controls, participation rate, and renewal terms.
We generally prefer transparent traditional indexes unless a proprietary index has a meaningful live history and a clear contractual advantage.
Renewal-Rate Risk
The contract’s initial caps, participation rates, and declared rates are not guaranteed for the full surrender period unless the contract specifically says otherwise. American National can reset those terms at renewal, subject to contractual minimums.
This matters most on the 10-year version. A buyer can remain subject to surrender charges even after the original crediting terms have been replaced by lower renewal terms.
Compare Strategy Index with products designed to reduce renewal-rate risk, including the Oceanview CapLock FIA and the Sagicor Sage Accumulator.
How the Lifetime Income Rider Works
The optional Lifetime Income Rider creates a separate Income Base used to calculate guaranteed lifetime withdrawals. The owner chooses the income-crediting method when the rider is added at issue.
The annual lifetime payment is based on the higher of the Income Base or annuity value when income begins, multiplied by the applicable withdrawal percentage. Income generally can begin after the contract has been in force for more than one year and the youngest covered owner has reached the required age.
Joint owners must be spouses when joint-life coverage is elected. The joint payment is generally lower than single-life income because it can continue over two lifetimes.
Fixed-Rate Lifetime Income Rider
The fixed-rate rider credits a contractual rate to the Income Base for up to ten years or until income begins, whichever occurs first. This is our preferred version for deferred income because the Income Base does not require future index gains to reach the guaranteed value.
Fixed-Rate Plus Index-Credit Rider
This version credits a lower fixed rate plus an amount linked to index interest earned by the annuity allocations. It can produce a larger Income Base when the strategies perform well, but it can also produce less than illustrated.
We would not select the performance-based version unless its guaranteed minimum income is competitive without relying on favorable index assumptions.
The Income Base Is Not Cash
The Income Base is maintained separately from the annuity value. It exists only to calculate lifetime withdrawals.
- It cannot normally be surrendered as a lump sum.
- It is not the amount available for a penalty-free withdrawal.
- It is not automatically the death benefit.
- Its growth should not be described as an investment return.
Additional premiums increase the Income Base but do not earn the rider’s Income Base interest. This makes late deposits less valuable for deferred income than money deposited at issue.
Lifetime Income and Excess Withdrawals
When the rider rules are followed, lifetime income can continue after permitted withdrawals reduce the annuity value to zero.
An excess withdrawal is different. Taking more than the rider or contract permits can proportionally reduce the Income Base, lower future income, or terminate the guarantee. Someone expecting large irregular withdrawals should keep more liquid money outside the annuity.
Before purchasing, compare the product with other guaranteed lifetime withdrawal benefits using identical ages, premiums, start dates, and spouse protection.
Flexible Premiums and New Deposits
Strategy Index permits additional premiums, including scheduled electronic contributions. That flexibility can be useful for consolidating retirement accounts or making ongoing contributions.
New money may receive the enhancement, index terms, and declared rates available when it is deposited rather than the terms offered on the original premium. Ask how each deposit is allocated and how an early withdrawal is applied among premium years.
When qualified money is used, coordinate the annuity with the household’s broader IRA and rollover strategy. An IRA already provides tax deferral, so the annuity must justify itself through principal protection, growth potential, lifetime income, liquidity, and beneficiary provisions.
Penalty-Free Withdrawals and Surrender Charges
The contract generally permits annual withdrawals up to 10% of the annuity value measured at the beginning of the contract year. The minimum withdrawal is generally $250. Required minimum distributions may receive favorable treatment under the contract.
| Contract Year | Strategy Index 7 | Strategy Index 10 |
|---|---|---|
| 1 | 7% | 10% |
| 2 | 6% | 9% |
| 3 | 5% | 8% |
| 4 | 4% | 7% |
| 5 | 3% | 6% |
| 6 | 2% | 5% |
| 7 | 1% | 4% |
| 8 | 0% | 3% |
| 9 | — | 2% |
| 10 | — | 1% |
| 11+ | — | 0% |
California schedules can differ. Strategy Index 7 can also impose premium-enhancement recapture on money taken above the free-withdrawal allowance during the recapture period.
Someone who may need more than the annual allowance should compare annuities with stronger liquidity.
Market Value Adjustment and Minimum Surrender Value
An MVA may apply to withdrawals above the penalty-free amount during the surrender period. The adjustment can increase or decrease the amount received based on changes in market interest rates.
The minimum guaranteed surrender value is generally based on 87.5% of premium, accumulated at contractually required minimum rates and reduced by withdrawals. It is a floor—not a full return-of-premium guarantee.
Confinement, Disability, and Terminal-Illness Waivers
American National may waive surrender charges and the MVA after qualifying confinement, disability, or terminal illness. Waiting periods, age limits, medical definitions, and state availability apply.
These waivers provide access to the existing annuity value. They do not create a separate pool of money and are not a substitute for long-term care insurance.
Death Benefit and Money Left to Family
Before maturity, the death benefit is generally the greater of the annuity value or surrender value. The annuity value includes applicable credited interest and is reduced by withdrawals and rider charges.
The Income Base is not paid as the death benefit. If lifetime withdrawals eventually deplete the annuity value, income can continue under the rider, but there may be no remaining account value for children or other beneficiaries.
Buyers whose main objective is leaving money to family should compare annuities designed for enhanced death benefits.
Tax Treatment
Interest in a nonqualified annuity grows tax-deferred. Withdrawals are generally taxed as ordinary income to the extent of gain. A distribution before age 59½ may be subject to an additional federal tax penalty unless an exception applies.
Qualified retirement money is generally taxable when distributed. Placing IRA money in an annuity does not create additional tax deferral.
Who Should Consider Strategy Index?
- A conservative saver seeking principal protection and index-linked growth potential.
- Someone who intends to use the S&P 500 or Nasdaq-100 rather than relying primarily on engineered indexes.
- A buyer who needs flexible premiums and understands that new deposits can receive different terms.
- A retiree seeking guaranteed lifetime income when the fixed-rate rider produces a competitive payout.
- A married couple seeking joint-life withdrawals and clear spouse continuation.
- Someone who has enough emergency savings to avoid excess withdrawals.
Who Should Avoid It?
- Someone attracted mainly by the premium enhancement.
- A buyer who wants every cap or participation rate locked for the full surrender period.
- Someone who may need substantial access before the contract ends.
- A consumer who believes the Income Base is cash.
- Someone choosing the fixed-plus-index rider based on an optimistic illustration.
- A buyer uncomfortable with recapture, surrender charges, and an MVA.
- Someone considering Strategy Index 10 without receiving a meaningful advantage over the 7-year version.
Other Insurance Coverage to Consider
- Long-term care insurance: Provides dedicated benefits for home care, assisted living, or nursing-home expenses beyond surrender-charge waivers.
- Life insurance: May create a larger income-tax-free legacy when leaving money to family is the main goal.
- Medicare Supplement coverage: Helps control healthcare expenses that an annuity income rider does not insure.
Alternatives to Compare
A cap-lock accumulation FIA: Better when you want the traditional-index cap or participation rate contractually protected for the surrender period.
A no-bonus FIA: May provide stronger growth potential and cleaner liquidity because the insurer is not funding a premium enhancement.
A MYGA: Appropriate when a guaranteed fixed return is more important than uncertain index-linked interest.
A competing GLWB annuity: Compare the highest guaranteed payouts from A- or better-rated insurers before selecting the income rider.
Review our current fixed indexed annuity choices and the latest American National annuity rates before purchasing.
Our Final Recommendation
We recommend starting with Strategy Index 7. It provides the same basic principal protection, flexible premiums, traditional-index access, annual liquidity, and optional income-rider structure without the additional three-year surrender commitment.
For accumulation, favor the S&P 500 or Nasdaq-100 and compare the contract with cap-lock FIAs and no-bonus products. For deferred lifetime income, use the fixed-rate rider as the starting point and select the product only when its guaranteed payout is competitive. Strategy Index 10 should provide a meaningful contractual advantage—not merely another engineered index or a larger illustration.
Contact The Annuity Expert for free quotes and a no-obligation comparison of American National Strategy Index 7 and 10 with accumulation and income annuities from A- or better-rated insurers. We will compare the traditional-index terms, premium enhancement, renewal risk, rider fee, guaranteed payout, spouse continuation, surrender period, liquidity, death benefit, and insurer strength before you buy coverage.
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Frequently Asked Questions
Is Strategy Index 7 or Strategy Index 10 better?
Strategy Index 7 is the better starting point for most buyers because it provides the core features with a shorter surrender period. Strategy Index 10 should provide a meaningful growth or income advantage before you accept three additional surrender years.
Does the contract include the real S&P 500?
Yes. Both versions include true S&P 500 strategies. The annuity does not invest directly in the index, and dividends are generally excluded from the interest calculation.
Is the premium enhancement free money?
No. Strategy Index 7 can recapture enhancement value after certain excess withdrawals or surrender, and the enhancement must be evaluated against growth potential, renewal terms, and the surrender period.
Which Lifetime Income Rider is better?
We prefer the fixed-rate rider for deferred income because its Income Base growth does not depend on future index credits. The fixed-plus-index version may produce more, but its illustrated result is not fully guaranteed.
Is the Income Base the same as the annuity value?
No. The Income Base is used only to calculate lifetime withdrawals. It is not cash, is not normally available for surrender, and is not automatically paid to beneficiaries.
Can I add money later?
Yes. Strategy Index is a flexible-premium annuity. New premiums may receive the enhancement and crediting terms available when deposited, and additional premium does not receive the income rider’s Income Base interest.
Can American National lower the cap or participation rate?
Yes. Most crediting terms can change at renewal, subject to contractual minimums. The initial rates should not be treated as permanent terms for the entire surrender period.
What do beneficiaries receive?
Before maturity, beneficiaries generally receive the greater of the annuity value or surrender value under the contract’s death-benefit provisions. The separate Income Base is not the death benefit.