Our Professional Opinion on the EquiTrust MarketValue Index Annuity
MarketValue Index is a non-bonus accumulation annuity built around a year-ten guaranteed value. The product can guarantee that the account reaches at least 110% of eligible premium, adjusted for withdrawals and strategy fees, at the end of the ten-year period. That sounds stronger than it is: 110% after ten years is only about a 0.96% compound annual floor.
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 do not recommend MarketValue Index for new accumulation money. The year-ten floor is useful protection against an extremely poor crediting result, but it is not competitive guaranteed growth in a high-interest-rate environment. The owner still accepts a long surrender period, an MVA, renewal risk, and optional buy-up fees.
MarketValue can be considered when its actual cap, participation-rate, and guaranteed-value package is materially better than an A- or better-rated contract. A slightly higher current cap is not enough. We would need to see a durable advantage in the no-fee strategies, guaranteed values, or liquidity provisions.
The product does offer flexible premiums and true S&P 500 strategies, but those features are common among modern fixed indexed annuities. They do not by themselves justify using a B++ company for ten years.
Bottom line: The 110% guarantee should be viewed as a low floor, not a growth target. Compare the complete illustration with A- or better-rated cap-lock FIAs and fixed annuities before considering MarketValue.
What We Like
- Contractual year-ten floor: The account can be stepped up to the guaranteed accumulation value at the end of the period.
- No premium bonus confusion: The product is easier to evaluate than a heavily bonus-driven design.
- Flexible premiums: Additional deposits can be accepted under the contract limits.
- True S&P 500 choices: Traditional index strategies are available.
- Zero-percent market floor: Index losses do not directly reduce the account value.
- Annual liquidity: A free-withdrawal allowance is generally available after year one.
- Health waivers: Nursing-home and terminal-illness provisions can provide additional access.
What We Don’t Like
- B++ AM Best rating: The issuer is below our preferred A- minimum.
- The 110% guarantee is weak growth: It is roughly 0.96% compounded annually over ten years.
- Ten-year surrender period: The buyer gives up liquidity for a long time.
- High standard surrender charges: Early access can be expensive.
- Renewal-rate risk: Current caps and participation rates are not locked for the full term.
- Buy-up fees reduce the guarantee: Fee deductions can lower the value used in the guarantee calculation.
- No lifetime-income rider: The product is not designed to maximize a guaranteed retirement paycheck.
- MVA exposure: Rising rates can reduce an early surrender value.
What Is the EquiTrust MarketValue Index Annuity?
MarketValue Index is a flexible-premium fixed indexed annuity issued by EquiTrust. It offers fixed and index-linked crediting options, a ten-year surrender period, annual liquidity after the first year, and a guaranteed accumulation-value provision.
The contract does not invest directly in the market. Interest is credited according to declared formulas, and a negative index result cannot directly create a negative interest credit. Fees, withdrawals, surrender charges, and an MVA can still reduce the amount received.
MarketValue Index Product Details
| Feature | Current Product Design |
|---|---|
| Product type | Flexible-premium accumulation fixed indexed annuity |
| Issue ages | Generally 0–85 |
| Minimum premium | $10,000 |
| Additional premium | Generally $2,000 minimum; annual limits apply after year one |
| Surrender period | Ten years |
| Guaranteed value | At least 110% of eligible premium at the end of year ten, adjusted for withdrawals and applicable fees |
| 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 |
| Death benefit | Generally account value |
What the 110% Guarantee Really Means
The guaranteed accumulation value is a separate floor within the contract’s annuity-value structure. If the normal account value is below the guarantee at the end of year ten, the contract can be increased to the guaranteed amount under the product rules.
A 10% total increase over ten years is approximately 0.96% compounded annually. That is not a 10% annual return and should not be presented as one. Withdrawals and buy-up fees can also reduce the amount used in the guarantee calculation.
Index Options and Crediting Methods
MarketValue offers strategies linked to the S&P 500, including annual point-to-point caps, participation-rate options, monthly methods, and a performance trigger.
A cap limits credited upside, while a participation rate applies a percentage to a positive index move. A performance trigger credits a declared rate when the index is flat or positive at term end.
Proprietary indexes should be reviewed using the principles in our index-option comparison. An engineered index can show a high participation rate while still producing modest crediting because of volatility controls, cash allocations, and index expenses.
Renewal Rates and Optional Fees
Current crediting terms are not guaranteed for the full ten years. EquiTrust can change them at renewal, subject to contract minimums. That renewal-rate risk can materially change long-term results.
Buy-up strategies charge an annual strategy fee for improved current terms. The charge is deducted even when the strategy earns little or no interest and can reduce the year-ten guaranteed value.
Liquidity, Surrender Charges, and MVA
After the first year, the owner generally receives an annual penalty-free withdrawal allowance. The standard surrender schedule can be:
| 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 | 12% | 12% | 12% | 12% | 11% | 10% | 8% | 6% | 4% | 2% |
State schedules vary. A chargeable withdrawal can also receive a Market Value Adjustment, which may reduce the surrender value when market rates have risen.
Death Benefit, Waivers, and Taxes
Beneficiaries generally receive the remaining account value. Review how annuities pass to beneficiaries and keep the designation current.
Qualifying nursing-home confinement or terminal illness may activate penalty-free crisis waivers. These provisions are access features, not long-term care coverage.
Interest grows tax-deferred and is generally taxed as ordinary income under annuity tax rules. Qualified money in an IRA receives no additional tax-deferral advantage from the annuity.
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. The low year-ten guaranteed return does not provide enough value on its own to offset the B++ rating. MarketValue would need materially stronger no-fee crediting terms and projected surrender values than A- or better-rated competitors.
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 MarketValue Index?
- A buyer who wants a contractual year-ten value floor and can stay for the full period.
- Someone whose no-fee crediting terms and projected values are materially better than stronger-rated alternatives.
- A consumer with adequate liquid reserves outside the annuity.
- A buyer who understands that the 110% guarantee is a ten-year total, not an annual return.
Who Should Avoid It?
- Someone seeking a strong guaranteed return.
- A buyer who may need substantial access during the ten-year surrender period.
- Someone seeking guaranteed lifetime income.
- A consumer who can obtain similar index terms from an A- or better-rated insurer.
- Anyone relying on a current rate sheet as a ten-year forecast.
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 lock selected traditional-index caps for the contract term, reducing a major source of uncertainty.
Sagicor Sage Accumulator provides another accumulation comparison with locked crediting terms.
A MYGA: Compare the guaranteed maturity value with current fixed annuity rates. A competitive fixed rate may provide substantially more guaranteed growth than the MarketValue floor.
Our Final Recommendation
We generally do not recommend MarketValue Index unless its complete accumulation package is materially better than an A- or better-rated alternative. The 110% year-ten guarantee is a useful floor but only equals about 0.96% annual compound growth before considering the effect of withdrawals and strategy fees.
Contact The Annuity Expert for free quotes and a no-obligation comparison of MarketValue 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 MarketValue Index a good annuity?
It can provide a year-ten value floor, but we generally prefer stronger-rated accumulation products unless MarketValue offers a materially better contract-specific result.
Does the 110% guarantee mean a 10% annual return?
No. It means a 10% total increase after ten years under the guarantee rules, which is roughly 0.96% compounded annually.
Can buy-up fees reduce the guaranteed value?
Yes. The guarantee is adjusted for applicable strategy fees and withdrawals under the contract formula.
Does MarketValue provide lifetime income?
It offers annuitization options but does not include a guaranteed lifetime withdrawal benefit.
Are the index terms guaranteed for ten years?
No. Caps, participation rates, trigger rates, fixed rates, and strategy pricing can change at renewal.
Why compare it with a MYGA?
A MYGA may provide a much stronger guaranteed annual return when predictable accumulation is the primary goal.