Our GBU Future Flex Fixed Index Annuity Review (Overall)
The GBU Future Flex Fixed Index Annuity is a flexible-premium fixed indexed annuity that lets you add money over time and earn interest based on available index strategies. It has a four-year surrender period, offers familiar index choices, and allows you to pay an optional fee for a higher participation rate.
Our opinion: Future Flex has some features we like, but there are enough catches that we would compare other annuities first. We like the flexibility to add deposits and the S&P 500 and Nasdaq-100 options. We do not like the possibility of another surrender period at renewal or paying an extra fee for a participation rate that can reset.
- Insurance company: GBU Financial Life, a fraternal benefit society
- Product type: Flexible-premium fixed indexed annuity
- Initial surrender period: Four years
- Additional premiums: Available under the contract rules
- Interest strategies: Indexed options and a fixed-interest account
- Participation-rate booster: Optional for an additional charge
- Income: Annuitization options are available under the contract
GBU Future Flex Fixed Index Annuity Alternatives
We would compare Future Flex with the best annuities before deciding where your money belongs. Fill out the form below or call (770) 755-1565 for a free comparison.
Our Professional Opinion on the GBU Future Flex Fixed Index Annuity
Future Flex has something many fixed indexed annuities do not: you can add money over time. That is useful if you are building a retirement account gradually instead of moving one large lump sum. The initial four-year period is also shorter than the seven- or ten-year commitments we often see.
We like having S&P 500 and Nasdaq-100 options. Those are familiar indexes people can actually understand. But a familiar index alone does not make the annuity a great deal. The participation rate determines how much of the index gain you receive, and GBU can set a new rate for a future term. We prefer a competitive participation rate or cap locked for multiple years.
The optional booster is another catch. You can pay a charge for a higher participation rate, but the fee is deducted even if the index earns no interest. A zero-percent index credit does not mean your account cannot go down when you elect a fee. We would compare the expected benefit and total cost before paying for the boost.
GBU Financial Life is an OK annuity company with an A− (Excellent) financial strength rating from AM Best. It meets our minimum for a long-term annuity, but there is a detail buyers need to know: GBU is a fraternal benefit society. Fraternal benefit societies are excluded from state life and health insurance guaranty associations in many states. Do not assume your state guaranty association covers this contract. Confirm the rules with your state association before you buy. Depending on the contract and state law, a certificate holder may also be assessed a share of a reserve impairment.
If your goal is guaranteed lifetime withdrawals, we would compare an annuity designed for that job. Converting an account into an income stream through annuitization is a different decision from using a guaranteed lifetime withdrawal rider.
What We Like
- Flexible deposits: You can add money over time, subject to the contract rules.
- A shorter initial commitment: Four years is easier to plan around than many longer surrender schedules.
- Familiar index choices: Available options include the S&P 500 and Nasdaq-100.
- No negative index credit: A decline in the index does not by itself produce a negative index interest credit.
- A choice of strategy terms: Available options include one- and two-year index strategies.
What We Don’t Like
- State guaranty protection may not apply: GBU is a fraternal benefit society, and many state guaranty associations exclude fraternal contracts.
- Participation rates reset: A rate that looks attractive today may be different for a future index term.
- The optional booster costs money: The charge can reduce the strategy value even if no interest is earned.
- A new surrender period can start: Renewal terms need attention before the initial period ends.
- Not our first choice for guaranteed lifetime income: We would compare a GLWB rather than buy this accumulation product just to create a future paycheck.
How Future Flex Credits Interest
You allocate your money among available index-linked strategies and a fixed-interest account. Index strategies use a participation rate to determine how much of a positive index change is used to calculate interest. You are not directly invested in the index, and you do not receive its dividends.
Suppose an index rises 10% during a hypothetical term and the participation rate is 60%. Before any applicable booster fee, the credited interest would be 6%. If the index declines, the index credit is generally zero. This is an example, not a current offer or a prediction.
The available choices include the S&P 500, Nasdaq-100, and Barclays indexes, subject to availability. We prefer starting with a familiar index rather than choosing an engineered index just because its participation rate looks impressive. Some engineered indexes use volatility controls and other rules that can affect their results.
For accumulation, compare the available locks on Oceanview CapLock and Sagicor Sage Accumulator. A locked cap or participation rate does not guarantee interest, but it can keep the insurer from changing that term during the locked period.
The Participation-Rate Booster
Future Flex lets you choose a higher participation rate on eligible strategies by paying an optional booster fee. GBU offers different fee levels for different increases. The fee is taken from the strategy value at the beginning of the index term, so it is a real cost, not just a percentage printed on a page.
For example, if $100,000 is allocated to a one-year strategy with a hypothetical 1% annual booster fee, the charge is $1,000 before the applicable index credit. If the index finishes down and the interest credit is zero, that charge still affects the money in the strategy. The actual charge and result depend on the strategy and contract.
We do not automatically hate a fee when it buys something valuable. But paying extra for a higher participation rate does not guarantee you will come out ahead. Compare the same index and term with and without the booster before buying.
Adding Money to the Annuity
Future Flex accepts additional deposits under its contract rules. That is attractive if you want to build savings over time. The minimum for additional deposits, allocation choices, and the timing for starting an index strategy should be confirmed before each contribution.
Ask how a new deposit is credited before its selected index term begins and whether the contract’s renewal rules affect your access. Do not assume that a deposit made today immediately receives a full year of indexed interest.
Withdrawals and Surrender Charges
Future Flex generally permits an annual free withdrawal of up to 10% of the account value. If you do not use the allowance in the preceding year, the available amount may increase to 20%, subject to the contract rules. Amounts beyond the allowance during a surrender-charge period can be subject to a surrender charge.
A withdrawal without a surrender charge does not mean the amount withdrawn gets a full index credit for an unfinished term. Ask how the withdrawal affects interest and whether any other contract adjustment applies before taking money out.
The standard four-year surrender schedule begins at 8% in each of the first two years, then 7% in each of the next two years. State and contract variations can apply. That is a serious haircut if you need more than the free amount, so keep emergency money somewhere else.
What Happens After Four Years?
Pay attention to the end of the initial term. Depending on the contract and state, renewal can begin a new surrender-charge period. That stinks if you expected the annuity to become permanently liquid after four years and did not realize you had to act.
Before the term ends, ask GBU for the renewal notice, the deadline for making a change, the new participation rates, and the surrender schedule that would apply if you continue. Compare those terms with what else is available before deciding.
Health-Related Access
Qualifying health events may allow additional access under the contract’s waiver provisions. Eligibility, waiting periods, and state rules apply. Ask which events qualify and whether surrender charges or other adjustments are waived before relying on the feature.
A waiver lets you access your own annuity money. It does not create a separate pool of long-term care insurance benefits.
What Happens When You Die?
Your named beneficiary can receive a death benefit under the contract terms. Withdrawals and any charges deducted while you are alive affect the amount left in your account. Ask how an unfinished index term is handled and what payment choices your beneficiary will have.
If your spouse is the beneficiary, ask whether spousal continuation is available and how continuing the contract would affect its renewal and withdrawal rules.
Can Future Flex Provide Lifetime Income?
The annuity offers payment options that can convert your account into a stream of income. This process is called annuitization. Once the account is converted, the ability to access the money and the benefits available to family depend on the payment option selected.
If you want a paycheck for life while retaining an account value, compare an annuity with a guaranteed lifetime withdrawal benefit. We can prepare a free income heat map using your age, state, deposit, and income start date so you can compare actual guaranteed payments.
Pros and Cons Compared With Other Annuities
- Compared with a MYGA: A fixed-rate annuity guarantees a stated rate for a set term. Future Flex offers index-linked potential and flexible deposits, but the interest it will credit is uncertain.
- Compared with another fixed indexed annuity: We like Future Flex’s flexible deposits and familiar indexes. We would compare its participation rates, booster costs, renewal rules, and issuer with products that lock a competitive cap or participation rate for multiple years.
- Compared with a RILA: A registered index-linked annuity can expose your account to market losses beyond its buffer or floor. We think accepting that downside while limiting the upside is a lousy trade for money you want protected. Future Flex does not credit negative interest simply because an index falls, although fees and withdrawals can reduce its value.
- Compared with a variable annuity: A variable annuity invests in options that can rise or fall. Future Flex exchanges direct market participation for an interest-crediting formula and protection from negative index credits.
Who Might Consider Future Flex?
Someone who wants to add money over time, values familiar indexes, and can live with the surrender and renewal rules may find the design useful. We would still compare the participation rates and total costs with other annuities and confirm the state guaranty association rules for GBU.
We would look elsewhere if you want a fixed interest rate, a competitive cap or participation rate locked for a longer period, or a guaranteed lifetime withdrawal rider. We would also avoid putting emergency savings into an annuity with surrender restrictions.
What We Recommend
Future Flex has useful flexibility, but we would not choose it just because you can add deposits or buy a higher participation rate. Compare the actual strategies, booster cost, renewal schedule, and insurance company with other options. Check whether your state guaranty association covers a fraternal benefit society before committing your money.
Contact The Annuity Expert for a free, no-obligation comparison. We can help you compare protected growth and lifetime income based on what you need your money to do. Call (770) 755-1565 or use the form below.
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