EquiTrust MarketPower Bonus Index Annuity Review
The EquiTrust MarketPower Bonus Index is a fixed indexed annuity designed primarily for long-term, protected accumulation. It combines a first-year premium bonus, fixed and index-linked interest-crediting strategies, limited annual liquidity, and principal protection from negative index performance.
The product also includes optional buy-up strategies that let the owner pay an additional fee for a higher cap or participation rate. The problem is that the improved rate is not locked for the full surrender period. EquiTrust can reset the cap or participation rate when the strategy renews.
We do not recommend this annuity. EquiTrust currently falls below our A- minimum AM Best standard, and the product itself requires an unusually long commitment while giving the insurance company control over future renewal rates.
Our Professional Opinion on the EquiTrust MarketPower Bonus Index Annuity
We do not recommend the EquiTrust MarketPower Bonus Index annuity for new buyers.
The first problem is the insurance company rating. EquiTrust currently carries a B++ financial-strength rating from AM Best. That is below our minimum standard of A- for an annuity recommendation.
EquiTrust also has A- ratings from Fitch and Standard & Poor’s, but our carrier screen is based primarily on AM Best. An annuity is supposed to be the safe portion of a retirement plan. We do not see a reason to accept a lower AM Best rating when A- or better-rated insurers offer competing accumulation annuities.
Even if EquiTrust met our company-rating standard, we would still have major concerns with this product.
The MarketPower Bonus Index has one of the longest surrender schedules in the annuity market. Depending on the state, the surrender period can last up to 14 years. The early surrender charges are also extremely high compared with most modern fixed indexed annuities.
That is a long time to commit retirement money to a contract when the cap rates, participation rates, performance-trigger rates, and fixed-account rate can change at renewal.
The first-year premium bonus is the main feature used to make the product look attractive. We like bonuses when they solve a specific problem, such as offsetting an existing surrender charge or helping restore value after a market loss.
However, a bonus is not free money. The insurance company prices the bonus into the overall contract through some combination of a longer surrender period, lower ongoing crediting potential, reduced liquidity, or other product economics.
The consumer brochure states that the bonus is added directly to the accumulation value and is included in the death benefit. It is not presented as a separate bonus that gradually vests. That is better than a bonus subject to a long recapture schedule.
But the entire accumulation value remains subject to surrender charges and a Market Value Adjustment during the surrender period. A permanent bonus does not make a 14-year contract liquid.
Our biggest product-design complaint is the buy-up feature. MarketPower Bonus Index lets you pay an additional strategy fee for a higher cap or participation rate on selected S&P 500 strategies.
Paying for more upside can occasionally make sense when the difference between the fee-based and no-fee strategy is large enough. The problem is that EquiTrust does not lock the improved cap or participation rate for the entire surrender period.
The company can change the rate at the end of the crediting term. The historical rate sheet supplied with this review shows that caps, participation rates, and fixed rates have changed repeatedly over time.
In plain English, you are paying to rent a better rate rather than buying a cap lock. We do not like that.
You could purchase the annuity because the current fee-based cap looks attractive, then receive a less attractive cap at a future renewal while your money is still subject to a long surrender schedule.
The buy-up fee can also reduce the strategy value when the index earns little or no interest. A higher cap does not guarantee a positive return, and the fee still has to be overcome before the buy-up strategy adds value.
We would rather use a true cap-lock FIA, a transparent participation-rate guarantee, or a MYGA with a contractual multi-year fixed rate. Our comparison of annuities designed to reduce renewal-rate risk explains the difference.
The traditional S&P 500 point-to-point strategy is the easiest option to understand. However, its cap is not guaranteed for the full surrender period. The product also offers monthly-average, monthly-cap, performance-trigger, and engineered-index strategies.
We are careful with the engineered indexes. The Barclays Focus50, S&P MARC 5% Excess Return, and S&P 500 Dynamic Intraday TCA indexes use volatility controls, multi-asset formulas, cash components, excess-return calculations, or other proprietary rules.
A large participation rate on one of those indexes cannot be compared directly with the same participation rate on the true S&P 500. Before using an engineered index, confirm its live date, live performance, volatility target, internal index deductions, and how much of the historical illustration is backtested.
The fixed account is only guaranteed for one contract year at a time. If the buyer expects to keep most of the money in the fixed account, compare current fixed annuity rates instead. A MYGA can guarantee the rate for the selected term rather than resetting it annually.
The product does provide useful liquidity after the first year, along with nursing-home and terminal-illness waivers. Those are good features, but they do not overcome the company rating, buy-up renewal risk, or unusually long surrender schedule.
Our bottom line: MarketPower Bonus Index is a bonus-heavy accumulation annuity with a long surrender schedule and changeable renewal rates. We do not recommend paying an additional fee for a higher cap or participation rate that EquiTrust can reduce later, and EquiTrust’s B++ AM Best rating falls below our minimum standard. We would choose an A- or better-rated insurer with a shorter surrender period and stronger contractual rate guarantees.
Compare MarketPower Bonus Index With Today’s Best Fixed Indexed Annuities
The best accumulation annuity changes as insurance companies adjust caps, participation rates, bonuses, liquidity, and surrender periods. Carrier strength and contractual guarantees should matter more than the largest first-year bonus.
What We Like
- Premium Bonus: Eligible first-year premiums receive an immediate bonus that is added to the accumulation value.
- Bonus Included in the Death Benefit: The supplied brochure states that the bonus remains part of the accumulation value paid to beneficiaries.
- True S&P 500 Options: Buyers are not forced to use only proprietary or volatility-controlled indexes.
- Several Crediting Methods: The contract includes annual point-to-point, monthly-average, monthly-cap, performance-trigger, and multi-year strategies.
- Principal Protection: Negative index performance does not directly reduce the accumulation value.
- Annual Liquidity After Year One: The contract generally permits penalty-free withdrawals of a portion of the accumulation value beginning after the first contract year.
- Nursing Home Waiver: Qualifying confinement can provide access without normal surrender charges or MVA.
- Terminal Illness Rider: Qualifying terminal illness can provide access to a substantial portion of the accumulation value without normal charges.
- Tax-Deferred Growth: Nonqualified interest is generally not taxed until money is withdrawn.
What We Don’t Like
- B++ AM Best Rating: EquiTrust falls below our A- minimum financial-strength standard.
- Extremely Long Surrender Period: The surrender schedule can last up to 14 years depending on the state.
- Very High Early Surrender Charges: The initial charges are substantially higher than those on many competing FIAs.
- Buy-Up Fee: The owner pays an additional fee for the higher cap or participation rate.
- Buy-Up Rates Are Not Locked: EquiTrust can change the enhanced cap or participation rate at future renewals.
- Fee Can Reduce Value: The buy-up charge must be overcome before the fee-based strategy improves the result.
- Traditional S&P 500 Cap Can Change: The simple point-to-point cap is not guaranteed for the full surrender period.
- Fixed Rate Resets Annually: The fixed account does not provide the multi-year certainty of a MYGA.
- Engineered Index Complexity: Several strategies rely on volatility controls, excess-return calculations, proprietary formulas, or limited live histories.
- No Bailout Provision: A rate reduction does not automatically allow the owner to leave without surrender charges.
- No Contractual Return of Premium: The owner cannot assume the original deposit will be available after an early surrender.
- Market Value Adjustment: Excess withdrawals during the surrender period can be increased or reduced by the MVA.
- Current Income-Rider Availability Is Unclear: An older brochure describes an optional income rider, but the current rate sheet supplied for this review does not price or describe that rider.
EquiTrust MarketPower Bonus Index Product Details
| Product Type | Deferred Fixed Indexed Annuity |
| Primary Purpose | Long-Term Protected Accumulation |
| Surrender Period | Up to 14 years; a shorter schedule applies in certain states |
| Issue Ages | Generally through age 75 |
| Minimum Initial Premium | $10,000 |
| Additional Premiums | Accepted during the first contract year, subject to contract minimums |
| Premium Bonus | Applied to eligible premiums received during the first contract year |
| Buy-Up Strategies | Optional fee-based S&P 500 strategies with a higher current cap or participation rate |
| Rate Guarantee on Buy-Up | Guaranteed only for the applicable crediting period, not the entire surrender schedule |
| Fixed Account | One-year declared interest rate that can change at renewal |
| Free Withdrawals | Interest-only access during the first year; annual penalty-free access to a portion of accumulation value beginning after year one |
| Market Value Adjustment | Yes, except where modified or prohibited by state law |
| Return of Premium | No contractual return-of-premium feature |
| Death Benefit | Generally the greater applicable amount under the contract, including accumulation value |
| Company Rating | AM Best B++; Fitch A-; Standard & Poor’s A- in the supplied current rate sheet |
| Guaranteed Lifetime Withdrawal Benefit | Verify current availability and contract form; the current rate sheet supplied does not price an income rider |
EquiTrust does not currently meet our minimum annuity-company standard. The current product sheet lists a B++ Financial Strength Rating from AM Best, which is below the A- minimum we use for new annuity recommendations. Although Fitch and Standard & Poor’s rate the company A-, we would select an insurer that also meets our AM Best requirement when comparable products are available.
Product provisions, surrender periods, index options, bonuses, and state availability can change. The supplied consumer brochure and current rate sheet reflect different bonus levels and different publication dates, so this review intentionally does not publish a temporary bonus percentage or current crediting-rate percentages.
How the MarketPower Bonus Index Annuity Works
The MarketPower Bonus Index is designed to provide tax-deferred accumulation without directly investing the premium in the stock market.
The owner allocates the premium among a fixed account and one or more indexed strategies. At the end of each crediting period, EquiTrust calculates whether interest should be added based on the selected strategy’s index performance, cap, participation rate, trigger, or averaging formula.
If an indexed strategy produces a negative result, the indexed credit is generally zero rather than negative. Previously credited interest is not lost merely because the index declines.
That does not mean the contract value can never decrease. Withdrawals, buy-up fees, surrender charges, taxes, and an MVA can reduce the value available to the owner.
How the Premium Bonus Works
Eligible premiums paid during the first contract year receive a premium bonus. The bonus is credited to the accumulation value and can earn fixed or indexed interest along with the premium.
The supplied consumer brochure says the bonus is a permanent part of the accumulation value rather than a separate amount subject to a gradual vesting schedule. It is also included in the amount available for the contract death benefit.
That does not make the bonus freely accessible during the surrender period. A full surrender or excess withdrawal can still trigger surrender charges and an MVA against the contract value.
The bonus should be evaluated against the entire contract. A larger day-one value is not automatically better if the buyer accepts weaker ongoing rates, a lower-rated insurer, and a surrender schedule lasting more than a decade.
Why We Don’t Like the Buy-Up Strategies
The buy-up strategies allow the owner to pay an additional annual charge in exchange for a higher cap or participation rate on selected S&P 500 strategies.
This creates the possibility of more interest when the index performs well enough for the additional upside to exceed the fee.
The problem is that the rate being purchased is not guaranteed for the entire contract. EquiTrust can declare a new cap or participation rate when the strategy renews.
The fee-based strategy should therefore be evaluated at every renewal. Do not assume that a buy-up that looks attractive at issue will remain attractive for the next decade or longer.
We would compare:
- The no-fee cap or participation rate
- The fee-based cap or participation rate
- The annual strategy charge
- The index’s realistic expected performance
- The guaranteed minimum cap or participation rate
- The remaining surrender period
When the additional upside is not clearly worth the charge, use the no-fee strategy or choose a different annuity.
Index-Crediting Strategies
The current product materials include strategies tied to the true S&P 500 and several engineered indexes.
S&P 500 Strategies
The S&P 500 choices include point-to-point caps, participation rates, monthly averaging, monthly caps, and a performance-trigger method.
We generally prefer the simple one-year point-to-point S&P 500 strategy when the cap is competitive. It is easier to understand than monthly-sum or engineered-index formulas.
The downside is renewal control. The S&P 500 cap and participation rates can change after the strategy period, and the contract does not provide a bailout provision if the future terms become unattractive.
Barclays Focus50 Index
The Barclays Focus50 Index combines lower-volatility U.S. stocks and U.S. Treasuries while targeting a controlled level of volatility.
Volatility control can reduce fluctuations, but it can also move money toward cash or fixed income during periods when equities subsequently rise. The participation rate cannot be evaluated without understanding the index methodology.
S&P MARC 5% Excess Return Index
The S&P MARC strategy uses equities, commodities, fixed income, and cash to target a controlled level of volatility. It is also an excess-return index, which means its result is not directly comparable with the traditional S&P 500.
We would not select it merely because the headline participation rate is larger than the rate on the true S&P 500.
S&P 500 Dynamic Intraday TCA Index
This is another engineered strategy rather than the traditional S&P 500. Confirm how long the index has operated live, how its volatility controls work, and how live results compare with hypothetical backtesting.
Fixed Interest Account
The fixed account guarantees its declared rate for one contract year. EquiTrust can declare a different rate at the next anniversary, subject to the contract minimum.
That makes the fixed account useful for short-term allocation decisions inside the annuity, but it does not provide the rate certainty of a MYGA.
If the buyer wants a guaranteed fixed return rather than index-linked interest, a MYGA from an A- or better-rated company is usually the cleaner comparison.
Liquidity and the Long Surrender Schedule
The biggest practical issue is the surrender period. Depending on the state, the contract can impose surrender charges for up to 14 years.
The current product sheet shows a shorter schedule in certain states, but even that version requires a long commitment. State-specific provisions should be confirmed before purchase.
During the first year, standard access is generally limited to eligible interest from the fixed account. Beginning after the first contract year, the owner can generally take an annual penalty-free withdrawal based on the accumulation value.
Unused penalty-free withdrawal amounts do not accumulate. A later full surrender in the same contract year may also cause previously free withdrawals to be included in the surrender-charge calculation under certain state provisions.
Withdrawals above the free amount can be subject to surrender charges and an MVA.
Do not place money in this contract that you may need during the surrender period.
Nursing Home and Terminal Illness Benefits
The contract includes health-related waivers that can improve access after the applicable waiting period.
- Nursing Home or Hospital Confinement: Qualifying confinement can permit a partial or full surrender without the normal surrender charge or MVA.
- Terminal Illness: A qualifying diagnosis can provide access to a substantial portion of accumulation value without the normal charges.
These features provide access to the owner’s own contract value. They are not a substitute for long-term care insurance, which can create a separate pool of benefits for care expenses.
Death Benefit
Before annuitization, beneficiaries generally receive the applicable accumulation value or another minimum amount defined by the contract, without the normal surrender charge or MVA.
The premium bonus is included in the accumulation value under the supplied brochure, which is a positive for beneficiaries.
This remains a standard annuity death benefit rather than a dedicated enhanced-death-benefit multiplier. Someone whose primary objective is leaving the largest inheritance should compare the best annuities for enhanced death benefits and traditional life insurance.
Retirement Accounts Accepted
- Non-Qualified Funds
- Traditional IRA
- Roth IRA
- 401(k) Rollovers
- SEP IRA
- SIMPLE IRA
- Inherited IRA
- 1035 Exchanges
Who Might Consider MarketPower Bonus Index?
We do not recommend new purchases because EquiTrust falls below our AM Best standard. Looking only at the product design, it was built for someone who:
- Wants a first-year premium bonus
- Can commit money for 10 to 14 years
- Wants principal protection from negative index performance
- Is comfortable with changeable renewal rates
- Understands engineered indexes and optional fee-based strategies
- Has sufficient emergency liquidity outside the annuity
Those goals can be met through A- or better-rated insurers with shorter surrender periods or stronger rate guarantees.
Who Should Buy Something Else?
- Someone Who Requires an A- or Better AM Best Rating: EquiTrust currently does not meet that standard.
- Someone Who Wants a Shorter Commitment: The surrender period can last up to 14 years.
- Someone Who Wants a True Cap Lock: The fee-based higher rates can still change at renewal.
- Someone Who Wants Guaranteed Fixed Interest: The fixed account resets annually rather than locking a multi-year rate.
- Someone Who Dislikes Engineered Indexes: Several strategies use volatility-controlled or excess-return formulas.
- Someone Who Needs Guaranteed Lifetime Income: No income rider availability; compare the actual payout with dedicated income annuities.
- Someone Who May Need the Money Early: Surrender charges and an MVA can make an early exit expensive.
- Someone Who Wants Return-of-Premium Protection: The base contract does not provide a contractual return-of-premium feature.
What Existing Owners Should Do
Existing MarketPower Bonus Index owners should not automatically surrender the contract. A new buyer should avoid placing money into a lower-rated insurer, but an existing owner must consider the cost of leaving.
Before making a change, request:
- Current accumulation value
- Current cash surrender value
- Remaining surrender-charge period
- Current Market Value Adjustment
- Current caps, participation rates, triggers, and fixed rate
- Current death benefit
- Tax basis and taxable gain
- Any income-rider or annuitization benefits attached to the specific contract
Then compare the amount that can actually be transferred with accumulation or income annuities from A- or better-rated companies. A properly structured 1035 exchange may preserve tax deferral, but the existing and replacement contracts should be compared before any paperwork is submitted.
Additional Insurance Options to Consider
Fixed Indexed Annuities With Guaranteed Lifetime Income
If lifetime income is the goal, compare FIAs with a contractual guaranteed lifetime withdrawal benefit. Select the annuity that produces the most competitive actual payout from an A- or better-rated company.
Multi-Year Guaranteed Annuities
A MYGA provides a fixed rate for a selected term without relying on index performance or annual cap renewals. It can be a better fit for someone who values simplicity and predictable interest.
Long-Term Care Coverage
The MarketPower health waivers merely improve access to the owner’s contract value. Dedicated long-term care coverage can create additional benefits for home care, assisted living, or nursing-home expenses.
What Happens After the Surrender Period?
After the applicable surrender period ends, the original surrender charges and MVA generally no longer apply. The owner may:
- Continue tax-deferred accumulation
- Take withdrawals without the original surrender charge
- Reallocate among then-available strategies
- Surrender the contract
- Complete an eligible exchange to another annuity
- Elect an available settlement or income option
Do not leave the contract on autopilot. Review the renewal rates, company rating, liquidity, and current alternatives when the surrender period ends.
What We Recommend
We do not recommend the EquiTrust MarketPower Bonus Index annuity for new purchases.
EquiTrust’s B++ AM Best rating is below our minimum requirement. The product also combines a very long surrender period with fee-based buy-up rates that can change at renewal.
The premium bonus is useful, but it is not enough to offset the insurer rating, surrender commitment, renewal-rate risk, and strategy complexity.
We recommend comparing A- or better-rated FIAs with shorter surrender periods, transparent traditional indexes, and contractual cap or participation-rate guarantees. A MYGA may be more appropriate when guaranteed fixed interest is the priority.
Contact The Annuity Expert for free annuity quotes and a no-obligation comparison. We can review an existing MarketPower contract or show new buyers stronger alternatives.
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