Our Ameritas Advisor No-Load Variable Annuity Review (Overall)
The Ameritas Advisor No-Load VA is a flexible-premium variable annuity that lets you put money into investment options that can rise or fall with the market. It also has a fixed account, a death benefit, and a choice of annuity payment options.
Our opinion: This is better than a lot of variable annuities when it comes to liquidity and contract costs, but we would not use it to protect retirement savings or create predictable income. There is no surrender charge, which we like. The part that stinks is that your investment account can lose money, and a new contract does not offer the lifetime withdrawal rider described for some older policies.
- Insurance company: Ameritas Life Insurance Corp.
- Product type: Flexible-premium deferred variable annuity
- Initial deposit: Generally $2,000; exceptions may apply
- Investment options: Variable investment options and a fixed account
- Surrender charge: None, although other fees and limits can apply
- Lifetime income: Available through annuitization; the GLWB2 rider is not available on policies issued on or after May 1, 2017
- Death benefit: Generally the greater of the policy value or adjusted guaranteed death benefit premiums before annuitization, subject to contract terms
Ameritas Advisor No-Load Variable Annuity Alternatives
Not all annuities are created equal. Compare Ameritas Advisor No-Load VA with the best annuities before you decide. Fill out the form below or call us at (770) 755-1565 for a free comparison.
Our Professional Opinion on the Ameritas Advisor No-Load VA
We will give Ameritas credit where it deserves it. No surrender charge is a good feature. You are not stuck paying a percentage to get out of the contract if your plans change. The base annuity expenses are also lower than those of many traditional variable annuities. That is refreshing.
But do not confuse a no-load annuity with a safe annuity. Your variable investments can lose money. If the stock market drops and your investments go with it, there is no guarantee that your account will be worth what you deposited when you need the money. That sucks if you thought buying an annuity meant your retirement savings were protected.
We would not touch this product for someone whose main goal is a predictable retirement paycheck without giving up access to their account. The lifetime withdrawal rider you may see described for older policies is not available on new contracts. Ameritas does offer lifetime payments through annuitization, but once you turn your money into those payments, you generally cannot take additional withdrawals from it.
If you want market exposure and understand the risk, compare the total cost and features with a regular investment account or other low-cost variable annuities. If you want protected savings or guaranteed lifetime withdrawals, we would compare a MYGA or a fixed indexed annuity with a lifetime income rider. Those are different jobs, and this annuity does not do all of them.
Ameritas Life Insurance Corp. is a good annuity company with an A (Excellent) financial strength rating from AM Best. We like the company’s strength, but that rating does not protect your variable investments from market losses.
What We Like
- No surrender charge: You do not have to wait through a multiyear surrender schedule to avoid a percentage charge for leaving.
- Lower base policy expenses: The annuity keeps its base variable-account charge lower than many traditional variable annuities, though other costs still apply.
- Investment choices: You can select among variable investment options and use a fixed account, subject to its rules.
- Flexible deposits: You can add money over time instead of being limited to one initial deposit.
- Death benefit protection: Before annuity payments begin, the standard benefit can protect an adjusted amount for beneficiaries if the account value falls.
- Financially strong issuer: Ameritas meets our preference for an insurance company backing a long-term annuity.
What We Don’t Like
- Your account can lose money: Ameritas does not protect the variable investment options from market losses.
- No GLWB2 on new contracts: You cannot add the lifetime withdrawal rider available on certain older policies to a newly issued policy.
- Lifetime payments require annuitization: If you choose lifetime annuity payments, you generally give up access to the money converted into those payments.
- No-load does not mean free: Base policy expenses, fund expenses, possible advisor fees, and other charges can add up.
- The death benefit is reduced by withdrawals: That includes withdrawals made to pay advisory fees. You cannot assume your family will receive your full original deposit.
- The fixed account has allocation limits: You generally cannot put more than 25% of a premium into it without Ameritas’s prior approval.
How the Ameritas Advisor No-Load VA Works
You deposit money into the annuity and choose how to allocate it among available investment options. You can make additional deposits under the contract rules. Your variable investment options hold underlying portfolios, so your account value changes with their performance and the expenses charged.
If your chosen investments do well, your account can grow. If they lose value, your account can shrink. There is no cap on your account value from index-crediting rules, but there is also no fixed indexed annuity’s zero-interest floor protecting the variable investments. The death benefit has its own rules and does not stop the account itself from losing value.
The contract also offers a fixed account that earns a declared interest rate. Ameritas generally limits a premium allocation to that account to 25% without its prior approval. The fixed account does not turn the rest of your investment options into protected savings.
How Much Does the Ameritas Variable Annuity Cost?
We like that Ameritas does not charge a sales load or a surrender charge. But no-load does not mean no fees. Before buying, add up these layers:
- Base policy expenses: Ameritas charges a percentage of the assets in the variable subaccounts. The charge can change, up to the contract’s 0.80% maximum.
- Investment expenses: The underlying portfolios have their own expenses, which vary with the funds you choose and are reflected in their values.
- Annual policy fee: There is a $40 annual policy fee, which Ameritas waives when the policy value exceeds its declared threshold on the anniversary.
- Advisory fee: If you have a separate arrangement with a financial professional, that fee is additional. It can be paid from the annuity or other assets, depending on your agreement.
- Other charges: Certain transfers, wire requests, and applicable state premium taxes can involve additional charges.
For a simple example, suppose the variable-account charge is 0.45%, the chosen funds cost 0.30%, and an advisor charges 1.00%. That is approximately 1.75% a year, or $1,750 on $100,000, before any annual policy fee or other charges. This is an illustration, not a quote. Your investment choices, advisor arrangement, account value, and policy terms determine what you actually pay.
A fee is not automatically a bad deal if you are getting services or features you value. But paying an advisor plus annuity and fund expenses just to own investments you could buy elsewhere deserves a hard look. Compare the total cost and what you get for it.
Can You Get Guaranteed Lifetime Income?
Yes, the contract offers annuity payment options that can provide guaranteed income for life through annuitization. The payment amount and any payments to a beneficiary depend on the option you choose and the contract terms.
Here is the catch: Once annuity payments begin, you generally cannot make additional withdrawals from the money used for those payments. If you want the freedom to keep an account value and take guaranteed lifetime withdrawals, compare a fixed indexed annuity with a guaranteed lifetime withdrawal benefit instead.
Ameritas describes a GLWB2 rider in connection with some older policies. It is not available to be elected or added on policies issued on or after May 1, 2017. If you already own an older contract, check your policy to see whether the rider applies before making changes. If you are shopping for income today, ask us for a free heat map comparing actual guaranteed payments from financially strong insurers based on your age, state, deposit, and income start date.
Withdrawals and Surrender Charges
Before annuity payments begin, you can generally withdraw money or surrender the policy without a surrender charge. We like that a lot. Many annuities tie your money up for years, so having the option to leave without a percentage-based surrender charge is a real advantage.
That does not guarantee you will get back what you deposited. If your investments have fallen or fees have reduced the account, you may have less to withdraw. Minimum withdrawal amounts and other contract rules apply. Ameritas does not currently charge an early-withdrawal fee, but reserves the right to introduce one within the contract’s limits; other transaction charges may also apply.
Once you annuitize, access changes substantially. Do not choose a lifetime payment option until you are comfortable giving up the ability to make additional withdrawals from the annuitized money.
What Happens When You Die?
Before annuity payments begin, the standard death benefit generally pays the greater of the policy value or your adjusted guaranteed death benefit premiums, subject to contract terms and applicable charges. If you have made no withdrawals, the adjusted premium amount generally equals your total premiums paid. That can be useful if the investments lose value before death.
But withdrawals, including withdrawals used to pay advisory fees, reduce the adjusted amount proportionately. The reduction can be larger than the dollars withdrawn when the account value has fallen. For example, if you deposited $100,000, your account falls to $70,000, and you withdraw $7,000, that withdrawal represents 10% of the account. The adjusted premium amount would generally fall from $100,000 to $90,000, assuming no other withdrawals or adjustments. Do not assume your family will always receive your full original deposit.
An eligible surviving spouse may be able to choose spousal continuation. After annuity payments begin, the benefits remaining for your family depend on the payment option selected; the pre-annuitization death benefit ends.
Pros and Cons Compared With Other Options
- Compared with a MYGA: A fixed-rate annuity guarantees a fixed interest rate for a set period. Ameritas gives you variable investment choices and no surrender charge, but your variable account can lose money and its return is not guaranteed.
- Compared with a fixed indexed annuity: A fixed indexed annuity generally protects against negative index interest credits and may offer a lifetime withdrawal rider. Ameritas offers direct investment exposure and no surrender charge, but variable investments can fall. For protected growth or reliable income, we prefer comparing fixed indexed options.
- Compared with a RILA: A registered index-linked annuity may absorb part of a market decline through a buffer or floor, but can still expose you to losses. This Ameritas variable annuity has no comparable buffer on its variable investments. We generally prefer a fixed indexed annuity when protecting retirement savings is the goal.
- Compared with another variable annuity: The lack of a surrender charge and relatively low base policy expense are genuine advantages. Another contract may offer different investment choices or income riders. Compare the features and every layer of cost.
- Compared with a regular investment account: A brokerage account can offer investment choices without an annuity contract and its associated policy expenses. Ameritas offers an annuity death benefit and tax-deferred growth; determine whether those features justify the extra costs and restrictions for your situation. An IRA already provides its own tax deferral.
Who Might Consider Ameritas Advisor No-Load VA?
Someone who wants variable investment exposure inside an annuity, values its death benefit, and wants to avoid a surrender schedule might consider it after comparing all costs. For the right person, the liquidity and lower base charge can make it worth a look. We would still compare the investment choices and the total cost with other ways to invest.
Who Should Look Elsewhere?
If you need your principal protected from market declines, want a fixed rate, or want a guaranteed lifetime withdrawal rider on a new contract, look elsewhere. We would also think twice if you already have tax-deferred retirement accounts and do not need this contract’s specific annuity benefits. Paying extra for features you do not use is a lousy deal.
What We Recommend
We like the no-surrender-charge design and the lower base policy expense. But we would not use Ameritas Advisor No-Load VA as a substitute for protected retirement savings or a guaranteed lifetime withdrawal plan. Your investment account can lose money, and new contracts do not offer the GLWB2 rider.
Contact The Annuity Expert for a free, no-obligation comparison. We can help you compare an annuity for protected growth or guaranteed income with other options based on what you need your money to do. Call (770) 755-1565 or use the form below.
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