Our Professional Opinion on the EquiTrust MarketEdge Bonus Index Annuity
MarketEdge Bonus Index is a high-bonus accumulation annuity that we would use only in a narrow situation. Its staged premium bonus can create a large displayed account value over the first three anniversaries, but the product pairs that bonus with unusually high early surrender charges and a ten-year commitment.
EquiTrust is a financially established annuity company, but its B++ AM Best rating is below our preferred A- minimum. Other rating agencies may view the company differently, but our long-term annuity standard is based on AM Best. That does not make every EquiTrust contract unsuitable; it means the product must provide a meaningful advantage over an A- or better-rated insurer before we accept the lower rating.
We generally prefer an A- or better-rated insurer for new accumulation money. MarketEdge becomes worth considering only when the contract-specific guaranteed surrender values and realistic maturity value are meaningfully better—not slightly better—than those alternatives. A large bonus by itself does not meet that test.
The standard structure adds an initial bonus and then additional credits based on account value at the first three anniversaries. That is more favorable than a bonus that exists only in an income base, but the owner does not receive a free windfall. The surrender schedule begins at a very high percentage, and future crediting terms remain renewable.
MarketEdge does not include a GLWB, so it should not be compared by lifetime income. Compare the cash value available after all surrender charges, the MVA, strategy fees, and renewal assumptions. If an A-rated FIA or MYGA produces nearly the same value, we would choose the stronger insurer.
Bottom line: MarketEdge is not our first choice for accumulation. It can be considered for a buyer who can hold it for the full term and receives a materially stronger guaranteed outcome, but the bonus does not erase the B++ rating or the severe early-exit costs.
What We Like
- Staged bonus structure: The bonus is added over multiple years rather than relying on one future income calculation.
- True S&P 500 strategies: Familiar annual point-to-point choices are available.
- Zero-percent market floor: A negative index year does not directly reduce the account value.
- First-year funding flexibility: Additional premium can generally be added during the initial funding period.
- Annual access after year one: A free-withdrawal amount is available under the contract.
- Health waivers: Nursing-home and terminal-illness provisions can waive normal charges.
- Account-value death benefit: Remaining value can pass directly to beneficiaries.
What We Don’t Like
- B++ AM Best rating: The issuer is below our preferred standard for a ten-year annuity.
- Very high early surrender charges: The standard first-year charge can begin at 16%.
- The bonus can be misunderstood: A large displayed value is not the same as penalty-free cash.
- No return-of-premium guarantee: Early surrender can return less than the original deposit.
- Renewal-rate risk: Future crediting terms are not guaranteed for the full surrender period.
- Buy-up fees: Optional enhanced strategies can impose an annual charge.
- No guaranteed lifetime withdrawal benefit: This is not a retirement-income product.
- Promotional percentages change: A limited-time offer should not determine a ten-year purchase.
What Is the EquiTrust MarketEdge Bonus Index Annuity?
MarketEdge Bonus Index is a bonus-focused fixed indexed annuity designed for protected accumulation. It credits interest through a fixed account and strategies linked to the S&P 500 and proprietary indexes.
The contract protects against direct index losses, but the amount available on surrender can still be reduced by the surrender schedule, an MVA, withdrawals, and optional strategy fees.
MarketEdge Bonus Index Product Details
| Feature | Current Product Design |
|---|---|
| Product type | First-year-premium fixed indexed annuity with a staged bonus |
| Issue ages | Generally 0–80 |
| Minimum premium | $10,000 |
| Additional premium | Generally $2,000 minimum during the first contract year |
| Standard bonus structure | Initial premium bonus plus account-value credits on the first three anniversaries; current specials can vary |
| Surrender period | Ten years |
| Penalty-free access | Generally up to 10% of prior anniversary account value after year one |
| Index choices | S&P 500 and proprietary strategies plus a fixed account |
| Optional strategy fee | Buy-up strategies can impose an annual charge |
| Return of premium | Not included as the normal contract floor |
| Death benefit | Generally account value |
How the Staged Bonus Works
The standard design can add a first-year percentage to premium and then credit an additional percentage of account value on each of the first three contract anniversaries. It is important to distinguish this cash-value bonus from an income-only bonus; MarketEdge increases the account under its terms, but the value remains subject to the contract’s restrictions.
Temporary promotional specials can increase the headline total. Those specials may disappear before an application is submitted and should never be treated as a permanent product feature.
Why the Bonus Is Not Free
The cost is embedded in the overall contract economics. EquiTrust can support a larger bonus by using a long surrender period, high early charges, and crediting terms that may be less favorable than a no-bonus alternative.
Compare the year-by-year surrender value, not only the starting account value. The account, vested value, and cash surrender value can be different annuity values.
Index Strategies, Buy-Ups, and Renewal Risk
MarketEdge includes strategies tied to the S&P 500 through caps, participation rates, monthly methods, and a performance trigger. It also includes engineered indexes with volatility controls.
Before using a proprietary strategy, compare every index option, including its live date, internal expenses, volatility target, and historical reliance on backtesting. A high participation rate on an engineered index is not directly comparable with the same percentage on the S&P 500.
Optional buy-up strategies charge a fee for improved current terms. Future terms can still change through annual renewal-rate decisions, so the fee does not lock the enhanced rate for ten years.
Surrender Schedule and Market Value Adjustment
The standard schedule can be especially punitive during the first half of the contract:
| Schedule | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Contract year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| Surrender charge | 16% | 14.5% | 13% | 11.5% | 9.5% | 8% | 6.5% | 5% | 3% | 1% |
Amounts above the annual penalty-free withdrawal can also be adjusted by a Market Value Adjustment. An owner who may need the money early should not buy this contract.
Health Waivers, Death Benefit, and Taxes
Qualifying nursing-home confinement or terminal illness may allow access under the annuity’s health-related waiver provisions. The definitions and waiting periods vary by state.
Beneficiaries generally receive account value under the contract’s annuity inheritance provisions. Withdrawals and surrender can reduce that amount.
Interest grows tax-deferred and is generally taxed as ordinary income under annuity taxation rules. An IRA already supplies tax deferral, so qualified money should be used only when the product features justify the choice.
EquiTrust Financial Strength and the B++ Issue
An annuity guarantee is only as strong as the issuing insurance company. Because EquiTrust is rated B++ by AM Best, we apply a higher burden of proof than we would to an A- or better-rated carrier. MarketEdge does not provide lifetime-income economics that could compensate for the lower rating. It must produce materially stronger guaranteed surrender and maturity values than better-rated alternatives.
For a large purchase, consider insurer diversification and the limits of your state guaranty association. State guaranty protection is a backstop, not a substitute for choosing financially strong insurance companies.
Who Should Consider MarketEdge Bonus Index?
- A buyer who can remain in the contract for the full ten-year surrender period.
- Someone whose guaranteed surrender values are materially higher than comparable A- or better-rated products.
- A consumer who understands that the bonus is part of the restricted annuity value, not free cash.
- A buyer with substantial liquid reserves outside the annuity.
Who Should Avoid It?
- Anyone who may need significant access during the first several years.
- A buyer choosing the product mainly because of the advertised bonus.
- Someone seeking guaranteed lifetime income.
- A consumer who can obtain a similar result from an A- or better-rated insurer.
- Someone who does not understand the fee-based buy-up strategies and renewal risk.
Other Insurance Coverage to Consider
- Long-term care insurance: Protects retirement assets from extended home care, assisted-living, or nursing-home expenses.
- Life insurance: Provides a defined death benefit when the annuity is intended primarily for the owner’s retirement rather than inheritance.
- Medicare Supplement coverage: Helps limit healthcare cost-sharing so the annuity is not used as the first source for routine medical expenses.
Alternatives to Compare
Oceanview CapLock can reduce renewal uncertainty by locking selected traditional-index caps for the contract term.
Sagicor Sage Accumulator offers accumulation-focused terms that should be compared without allowing the bonus to dominate the decision.
A fixed annuity: Compare the guaranteed maturity value with current fixed annuity rates when predictable growth is the goal.
Our Final Recommendation
We generally do not recommend MarketEdge Bonus Index unless its guaranteed value is materially better than an A- or better-rated alternative. The staged bonus is attractive on paper, but the B++ rating, unusually high early surrender charges, MVA, renewal risk, and optional strategy fees create a high hurdle.
Contact The Annuity Expert for free quotes and a no-obligation comparison of MarketEdge Bonus Index with annuities from A- or better-rated insurers. We will compare the guarantee, income or accumulation value, fees, surrender period, liquidity, death benefit, company strength, and any care benefits before you buy coverage.
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Frequently Asked Questions
Is MarketEdge Bonus Index a good annuity?
It can work for a buyer who holds it for the full term and receives materially better guaranteed value than stronger-rated alternatives. It is not our default accumulation recommendation.
How is the MarketEdge bonus paid?
The standard design adds an initial bonus and additional account-value credits on the first three contract anniversaries. Current promotional percentages can change.
Can I withdraw the bonus immediately?
Not without considering the surrender schedule, MVA, and contract values. The displayed account value is not the same as penalty-free cash.
Does MarketEdge provide lifetime income?
It can be annuitized, but it does not include a guaranteed lifetime withdrawal benefit that preserves normal account control.
Why are the surrender charges so important?
The standard schedule begins at a high percentage, so leaving early can erase much of the apparent bonus advantage.
Should I choose a buy-up strategy?
Only after comparing the additional fee with the improvement in current terms and recognizing that future renewal terms can change.