Our GBU Future Flex Classic Annuity Review (Overall)
GBU Future Flex Classic is a flexible-premium fixed annuity designed for people with a substantial amount of money who want the ability to add more over time. It credits a declared interest rate, with a two-year early-withdrawal period and a rate that can change after the initial guarantee.
Our opinion: The short commitment is interesting, but the advertising around access deserves a hard look. GBU describes the annuity as having no conventional surrender charge, yet taking money out early can still cost you credited interest. We would compare its actual rate and access rules with shorter-term fixed annuities from other insurers before committing a large deposit.
- Insurance company: GBU Financial Life, a fraternal benefit society
- Product type: Flexible-premium fixed deferred annuity
- Initial premium: Generally $100,000, subject to current contract and state requirements
- Interest guarantee: The initial rate is guaranteed for one year; renewal rates can change, subject to contract minimums
- Early access: A withdrawal during the first two years may be subject to an excess-interest charge, unless an applicable exception applies
- Additional deposits: Allowed under the contract’s minimums and other terms
GBU Future Flex Classic Annuity Alternatives
Before you commit a large deposit, compare Future Flex Classic with the best annuities and look closely at the interest guarantee and access to your money. Fill out the form below or call us at (770) 755-1565 for a free comparison.
Our Professional Opinion on the GBU Future Flex Classic Annuity
We like that Future Flex Classic lets you add money and has a relatively short early-withdrawal period. If you want a fixed annuity that does not tie your money up for five or ten years, that is worth comparing.
But “no surrender charge” does not mean every early withdrawal is free. An excess-interest calculation can reduce what you receive during the first two years. We do not like seeing access described as though there is no cost to leave without making that catch obvious.
There is another distinction: the initial interest rate is guaranteed for one year, not necessarily the entire two-year early-withdrawal period. The rate can change afterward. That stinks if you thought you were locking in the same return for both years.
GBU Financial Life is an OK annuity company with an A− (Excellent) financial strength rating from AM Best, meeting our minimum. But GBU is a fraternal benefit society, and its contracts generally do not receive state life and health insurance guaranty association protection. That matters when the minimum deposit is this large. Verify the protection that applies in your state before buying. Depending on the contract and state law, a certificate holder may also be assessed a share of a reserve impairment.
If you plan to live off the interest, compare the actual guaranteed lifetime income from a fixed indexed annuity with a lifetime withdrawal rider. A rate that can change is not a paycheck guaranteed to last for life.
What We Like
- Shorter early-withdrawal period: The two-year restriction is shorter than many fixed annuity surrender schedules.
- Add money over time: Additional deposits are allowed under the contract rules.
- Fixed interest: The insurer declares a rate instead of tying interest to an index.
- Flexible income choices: When you are ready, available annuity payment options can provide income for a selected period or for life.
- Potential access exceptions: Eligible withdrawals may avoid the early charge under the contract’s rules.
What We Don’t Like
- Early access can still cost you: The excess-interest charge can reduce what you receive in the first two years.
- The initial rate can change after one year: Do not assume it is fixed for the entire early-withdrawal period.
- A high starting deposit: This is not a practical choice for someone looking to place a small amount.
- Fraternal society protection: State life and health guaranty association protection generally does not apply to GBU contracts.
- No lifetime withdrawal guarantee from interest: Spending interest is not the same as a guaranteed paycheck for life.
How GBU Future Flex Classic Works
You make an initial deposit and can add more money later, subject to the minimums and contract rules. GBU credits interest to the annuity at a declared rate. The initial deposit’s rate is guaranteed for the first year; after that, GBU declares renewal rates subject to the guaranteed minimum in your contract.
An additional deposit can receive the rate in effect when it is received. Do not assume every dollar added later gets the same rate as your original deposit. Ask what rate applies to each deposit and how long it is guaranteed.
Compare Fixed Annuity Rates
Compare GBU’s initial rate and access rules with fixed annuities from other financially strong companies. Match the guarantee period and amount you plan to deposit before deciding which offer is better.
The Two-Year Early Withdrawal Charge
During the first two years, an early withdrawal can be subject to an excess-interest charge. In plain English, the amount you withdraw may receive only the contract’s guaranteed minimum interest rate from the start of the contract to the withdrawal date, rather than the higher interest that had been credited. In other words, you can give up some of the interest you thought you earned.
You can receive less than the account value you see on your statement when the charge applies. Ask GBU for the actual amount you would receive before taking money out. After the two-year period, the ordinary early-withdrawal restriction ends under the contract terms.
Certain withdrawals, such as qualifying earned interest, required distributions, limited annual withdrawals, or withdrawals under a health provision, may be treated differently. The calculation, exceptions, and availability can vary by contract and state. Do not assume every withdrawal is exempt.
If You Plan to Take Withdrawals
If you plan to use the interest to pay your bills, compare a guaranteed lifetime withdrawal benefit. GBU can change the renewal rate after the initial guarantee, so the interest available to spend can change too.
If you want withdrawals but do not need lifetime income, compare a bonus annuity that adds money to the account up front. The larger starting balance may leave more money working for you, even at a lower interest rate. It is not automatically better, so compare the actual terms and account projections.
If you are in poor health or planning for a shorter retirement, compare an annuity with a bonus that is available to beneficiaries at death. A qualifying bonus may leave your family more than an interest rate that has had little time to grow. Check the vesting, death-benefit, and withdrawal rules first.
Health Waivers and Required Withdrawals
Certain qualifying health events may provide access without the early-withdrawal charge through health waivers. Provisions can include a terminal condition, qualifying nursing home or home health care, a critical illness, or loss of certain daily living abilities. Requirements and availability vary, so ask what applies to your contract before relying on a waiver.
A required minimum distribution may also qualify for special treatment under the contract rules. A health waiver gives you access to your own annuity money; it does not create a separate pool of long-term care insurance benefits.
What Happens When You Die?
Before annuity payments begin, the death benefit is generally the accumulated value, subject to contract terms. Withdrawals you take while alive reduce the money left for beneficiaries.
An eligible surviving spouse may be able to continue the contract instead of taking the death benefit. Ask how spousal continuation affects the rate, access to the money, and beneficiary choices.
Compare Future Flex Classic With Other Annuities
- Compared with a MYGA: A multi-year guaranteed annuity locks its rate for a stated term. Future Flex Classic can accept additional deposits, but its initial rate is generally guaranteed for one year and can change afterward.
- Compared with a fixed indexed annuity: Classic credits a declared interest rate. A fixed indexed annuity offers index-linked interest potential, but the interest is not a guaranteed multiyear rate. Some also offer lifetime withdrawal riders.
- Compared with a RILA: A registered index-linked annuity can expose your account to losses beyond its protection. We think taking that risk while giving up some upside is a lousy trade when protecting savings is the goal.
- Compared with a variable annuity: A variable annuity gives you investment options that can fall with the market. Classic offers declared interest rather than direct market participation.
Who Should Consider Future Flex Classic?
Someone with a substantial deposit who wants to add money and values a shorter commitment may find it useful. We would compare the actual quote, first-year guarantee, early-withdrawal calculation, and insurer protections before deciding. The large deposit makes that last point especially important.
We would look elsewhere if you want a fixed rate guaranteed for several years, need unrestricted access right away, or want a lifetime withdrawal guarantee. A contract can be short and still be the wrong place for money you may need tomorrow.
What We Recommend
Future Flex Classic has useful flexibility, but we would not buy it just because the early-withdrawal period is short. Compare the rate and actual access with other fixed annuities, and understand the fraternal society’s guaranty association treatment before committing your savings.
Contact The Annuity Expert for a free, no-obligation comparison. Call (770) 755-1565 or use the form below, and we can compare fixed annuities, withdrawal options, and guaranteed income based on your goals.
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