Our Professional Opinion on the F&G Performance Pro Annuity
We do not recommend F&G Performance Pro for most deferred-income buyers. The contract’s guaranteed income path is relatively weak, while much of the illustrated upside comes from an add-on rate tied to future index credits. That is the type of performance-based income design we generally avoid when a stronger contractual roll-up is available elsewhere.
F&G is a strong annuity company. Fidelity & Guaranty Life Insurance Company is rated A by AM Best and meets our A- minimum standard. The problem is not the company. The problem is paying for a ten-year bonus contract whose future income depends too heavily on index performance and renewal terms.
The large first-year premium bonus makes the contract look attractive, but it vests gradually over ten years. It is not immediately available for surrender. The bonus can also be offset by lower caps, participation rates, spreads, longer surrender charges, or the cost of enhanced index options.
The rider’s guaranteed roll-up is modest. The Income Base receives a stated base increase and can receive an additional amount based on interest credited to the account. A favorable annuity illustration can therefore show substantial growth, but a series of zero-crediting years or future renewal cuts can leave the owner much closer to the lower guaranteed path.
The rider fee is unusually low under the current design, which is a legitimate positive. However, a low fee does not rescue an uncompetitive payout. The actual annual payment—calculated from the Income Base and withdrawal factor—must be compared with guaranteed-income products from other A- or better-rated insurers.
Performance Pro also uses a long ten-year surrender schedule, and some state versions begin with substantially higher charges. The owner remains exposed to future renewal rates while the contract remains difficult to exit.
The impairment multiplier can temporarily increase income, but only while the account value remains above zero and the qualification continues. That is not a replacement for long-term care insurance or a stronger annuity care feature that continues after account depletion.
Bottom line: Performance Pro can produce a good result when its indexes perform well and its payout is competitive, but we would not base a retirement-income plan on that possibility. We prefer a GLWB with a stronger guaranteed roll-up and a competitive payout that does not need optimistic index assumptions.
What We Like
- A-rated insurer: F&G meets our minimum financial-strength standard.
- Low current income-rider fee: The annual charge is lower than many competing GLWB fees.
- Spouse continuation: The rider includes provisions for a surviving spouse to continue the contract and income.
- Single- and joint-life income: The guarantee can cover one life or two covered spouses.
- True S&P 500 choices: The crediting menu includes familiar traditional-index strategies.
- Broad strategy menu: Buyers can select fixed, annual, multi-year, cap, spread, and participation-rate methods.
- Account-value bonus: The year-one premium bonus can increase the amount credited to the contract, subject to vesting.
- Income can continue after account depletion: Permitted payments remain guaranteed for life.
- Annual liquidity: Up to the applicable percentage of vested value is generally available after year one.
- Health-related waivers: Qualifying care or terminal illness can provide additional access.
What We Don’t Like
- Weak guaranteed roll-up: The basic contractual income path is not compelling compared with stronger income riders.
- Add-on rate depends on performance: Zero index credits produce little or no performance-based income growth.
- Ten-year bonus vesting: The headline bonus is not immediately available for surrender.
- Long surrender schedule: Some state versions begin with double-digit charges and remain restrictive for ten years.
- Engineered-index reliance: Several strategies have short live histories and depend on backtested results.
- Fee-based crediting options: Some enhanced strategies deduct an annual charge before interest is determined.
- Renewal-rate risk: Future caps, participation rates, spreads, and fixed rates can change.
- Income Base is not cash: The rider value cannot be withdrawn as a lump sum or paid directly at death.
- Care increase can end: The enhanced payment reverts when the account value reaches zero or eligibility ends.
- Illustrated upside can distract from the guarantee: The product should not be purchased on backtested performance.
What Is F&G Performance Pro?
Performance Pro is a flexible-premium fixed indexed annuity with a year-one vesting bonus and a guaranteed minimum withdrawal benefit. The product combines protected account-value accumulation with a separate Income Base used to calculate lifetime withdrawals.
The contract is designed to blend three ideas: an account-value bonus, index-linked growth, and guaranteed income. Those features are not interchangeable. The bonus affects account value subject to vesting, index credits affect account value and the rider add-on, and the Income Base determines the lifetime payment.
Performance Pro Product Details
| Feature | Current Product Design |
|---|---|
| Product type | Flexible-premium bonus fixed indexed annuity with lifetime withdrawals |
| Issue ages | Generally 0–80 nonqualified and 18–80 qualified |
| Minimum premium | $10,000 |
| Surrender period | Ten years, with state-specific schedules |
| Premium bonus | Age- and state-dependent bonus on first-year premium, vesting over ten years |
| Guaranteed Income Base growth | Currently a 2.75% base roll-up plus a possible performance-based add-on |
| Income rider fee | Currently 0.10% of the Income Base annually; restart provisions can permit a higher fee within the contract maximum |
| Free withdrawal | Generally up to 10% of vested account value after year one |
| Death benefit | Account value including applicable total vesting bonus |
How the Premium Bonus Works
Eligible first-year premium receives a bonus that varies by state and issue age. The bonus generally vests in equal portions over ten years. A death benefit may include the total bonus even before it is fully vested, but an ordinary surrender does not receive the same treatment.
This is why a bonus annuity must be compared using surrender value rather than the first-day account value. A premium bonus versus income bonus comparison can be useful when deciding whether the headline bonus creates more spendable value, but the bonus should not be mistaken for free cash.
How the Performance Pro Income Base Grows
The rider maintains a separate Income Base. Under the current design, the base receives a 2.75% contractual roll-up and may receive an add-on based on the weighted interest credited to the account allocations.
The guaranteed portion is the dependable path. The add-on is a performance-based income credit and can vary from zero upward. Multi-year index allocations that have not reached the end of their crediting period can contribute zero to that year’s add-on calculation.
Withdrawals before income begins reduce the Income Base proportionally. A restart can extend the accumulation period, but F&G can declare a new roll-up rate subject to the contractual minimum.
Why We Do Not Rely on the Add-On Rate
The add-on calculation looks attractive because it allows account interest to increase the Income Base. The problem is that every input can vary: the index result, cap, participation rate, spread, allocation, crediting term, and future renewal terms.
Several illustrated indexes were launched only recently, and earlier historical results are backtested. Review the difference between illustrated and realized FIA returns before treating the add-on as likely retirement income.
A retirement plan should work under the guaranteed assumptions. Performance can be treated as upside, not as the amount required to pay essential expenses.
How Guaranteed Lifetime Income Is Calculated
When income begins, F&G multiplies the Income Base by an age-based payout factor. Current factors rise in age bands and are lower for joint-life coverage.
The rider can provide payments for life without requiring annuitization. Compare that structure with annuitization versus lifetime withdrawals and confirm that both spouses are protected when household income depends on the contract.
Performance Pro includes spousal continuation provisions. Ownership, joint-annuitant status, and beneficiary designations must be correct before a death occurs.
Income Rider Fee
The current fee is a small percentage of the Income Base and is deducted annually from vested account value. This is one of the product’s better features, but all annuity fees should be measured against the guaranteed income received.
A low fee on a lower payout can still be a worse deal than a higher fee on materially stronger lifetime income. Compare net outcomes rather than fee percentages in isolation.
Index Crediting Options
The contract offers the S&P 500 plus several engineered indexes tied to balanced assets, commodities, BlackRock, Goldman Sachs, Barclays, and Morgan Stanley methodologies.
The strategies can use a cap rate, participation rate, or spread. Some multi-year strategies also charge a separate fee for a higher participation rate.
Many nontraditional choices use volatility controls and internal index costs. A high participation rate on these indexes does not mean the annuity will earn the same return as a stock index.
Backtested Indexes and Illustrations
Performance Pro’s marketing can display hypothetical account and Income Base growth using a mixture of newer indexes. A consumer should understand how annuity illustrations use historical assumptions and may include periods before an index existed live.
The relevant question is not how the index would have performed under a backtest. It is how much of the result is contractually guaranteed and whether the account can withstand lower renewal terms.
Renewal-Rate Risk
F&G can reset future caps, participation rates, spreads, and fixed rates. These changes can reduce account growth and the income add-on while the surrender schedule remains in force. Compare products designed to avoid renewal-rate drops before accepting the long commitment.
The contract therefore should not be purchased for accumulation unless its guaranteed and current terms compare favorably with simpler products designed specifically for growth.
Liquidity, Surrender Charges, and MVA
After the first year, the owner can generally take up to 10% of vested account value through penalty-free withdrawals. Excess withdrawals can face surrender charges, an MVA, bonus loss, and a proportional reduction to future income.
| Contract Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11+ |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Higher-charge schedule | 14% | 13% | 12% | 11% | 10% | 8% | 6% | 4% | 2% | 1% | 0% |
| Common alternate schedule | 9% | 9% | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0% |
An applicable Market Value Adjustment can further increase or decrease the amount received. The state-specific contract controls.
Because excess withdrawals can damage both account value and income, compare annuities with stronger liquidity when irregular access is likely.
Impairment Benefit and Health Waivers
Qualifying impairment can increase the guaranteed payment after the rider has been in force for the required period. Eligibility generally requires an inability to perform at least two ADLs and other medical conditions.
Home-health, nursing-home, and terminal-illness provisions can also waive charges under defined circumstances. These crisis-waiver benefits provide access to the existing account and should not be confused with dedicated care insurance.
Death Benefit
Beneficiaries generally receive the account value, including the applicable total vesting bonus, without surrender charges or MVA. The Income Base is not the death benefit. Compare the contract with annuities designed for enhanced death benefits when legacy is the primary goal.
Tax Treatment
Nonqualified earnings receive tax deferral and are generally taxed as ordinary income when distributed under annuity taxation rules. Withdrawals before age 59½ can face an additional federal penalty.
An IRA already has tax-deferred growth. Qualified money should be used because the income rider and principal protection fit the retirement plan, not because the annuity adds another layer of tax deferral. Eligible RMDs receive special contract treatment.
Who Should Consider Performance Pro?
- A buyer who understands that the guaranteed roll-up is modest and treats the add-on as optional upside.
- Someone whose actual contract-specific payout is competitive despite the performance-based design.
- A married couple that correctly structures joint-life income and spouse continuation.
- A consumer who can leave the money in the contract for the full surrender period.
- Someone who values a low current rider fee and accepts renewal-rate risk.
Who Should Avoid It?
- A retiree who needs a strong guaranteed income path independent of index performance.
- Someone attracted mainly by the first-year bonus or an optimistic illustration.
- A buyer who may need substantial access during the next ten years.
- Someone who wants a simple accumulation FIA with locked traditional-index terms.
- A consumer relying on the impairment benefit as long-term care insurance.
Other Insurance Coverage to Consider
- Long-term care insurance: Provides dedicated benefits that can continue independently of annuity account value.
- Life insurance: Can protect beneficiaries if lifetime withdrawals are expected to spend down the contract.
- Medicare Supplement coverage: Helps control retirement healthcare costs outside the annuity.
Alternatives to Compare
F&G Safe Income Advantage: Start with a product whose income design relies more heavily on guaranteed roll-up growth.
A cap-lock accumulation FIA: Use a product such as Oceanview CapLock when account growth and renewal protection are the main objectives.
A no-bonus FIA: Compare products designed for growth without ten years of bonus vesting and surrender restrictions.
Check current F&G annuity rates and guaranteed payouts rather than relying on the illustrated add-on rate.
Our Final Recommendation
We recommend looking at a stronger guaranteed-income design before buying Performance Pro. The low rider fee and spouse provisions are positives, but the modest guaranteed roll-up, performance-dependent add-on, long vesting bonus, engineered indexes, and ten-year surrender schedule are not the combination we prefer for essential retirement income.
Contact The Annuity Expert for free quotes and a no-obligation comparison of Performance Pro with guaranteed-income FIAs from A- or better-rated insurers. We will compare the actual paycheck, guaranteed and illustrated Income Base growth, rider fee, joint-life protection, surrender value, liquidity, care benefit, death benefit, and insurer strength before you buy coverage.
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Frequently Asked Questions
Is F&G Performance Pro a good annuity?
It can work when the actual payout is competitive, but we do not recommend it for most deferred-income buyers because the guaranteed roll-up is modest and the add-on depends on index performance.
Is the first-year bonus immediately available?
No. The bonus vests over ten years for ordinary surrender purposes, although the death-benefit calculation can receive different treatment.
What is the add-on rate?
It is an Income Base increase linked to interest credited to the account allocations. It can be zero in a weak or zero-crediting year.
Does the 0.10% rider fee make Performance Pro a bargain?
Not automatically. The fee is low, but the guaranteed payout must still beat or closely match stronger income riders.
Can the care benefit continue after account depletion?
The enhanced impairment payment generally reverts when the account value reaches zero. The ordinary lifetime guarantee may continue.
Are the illustrated index results guaranteed?
No. Many results rely on hypothetical or backtested index history and current crediting terms that can change at renewal.