Our Professional Opinion on the Global Atlantic ForeIncome II Annuity
ForeIncome II is a good guaranteed-income fixed indexed annuity, and the Guaranteed Income Builder Benefit is the version we prefer for deferred income. It provides a contractual annual increase to the Withdrawal Base for up to 15 years, which makes the future income path more dependable than the performance-based Income Multiplier Benefit.
Forethought Life Insurance Company is a good annuity company. It is part of Global Atlantic and is rated A by AM Best, comfortably meeting our A- minimum standard.
The Guaranteed Income Builder Benefit is the cleaner option. It credits a stated percentage of the original premium to the Withdrawal Base each year for up to 15 years or until income begins. That growth is simple rather than compound, and it is not cash, but it does not require the indexes to perform well.
We generally do not recommend the Income Multiplier Benefit for deferred income. It multiplies the interest credited to the contract before income begins and can continue adding interest-based increases after activation. That can look better in a favorable annuity illustration, but weak index performance, lower renewal terms, or zero-crediting years can produce much less future income.
The actual guaranteed payout matters more than the roll-up percentage or rider name. Compare the same premium, age, state, start date, single- or joint-life structure, and survivor protection with other guaranteed lifetime withdrawal benefits.
We prefer the Level Payment Option for most retirees. The Lifestyle Payment Option can provide more income during the early active years, but it later falls to the level amount and then drops again in the legacy phase. That may fit a deliberate front-loaded spending plan, but it creates less income at the ages when healthcare and support expenses often rise.
The 5-year version should be the first comparison when it produces the same guaranteed payout as the 7- or 10-year version. A longer surrender period should only be accepted when it creates a clear income or account-value advantage. Do not select a 10-year contract merely because its index terms look higher.
The Income Enhancement Benefit can double the Lifetime Annual Payment for up to five years after a qualifying inability to perform two activities of daily living. It is useful supplemental protection, but it requires sufficient contract value and is not a substitute for long-term care insurance.
Bottom line: ForeIncome II is worth quoting. Start with the Guaranteed Income Builder, Level Payment Option, and shortest contract producing the competitive guaranteed payout. Use the Income Multiplier only when its guaranteed minimum income is attractive without assuming strong future index credits.
What We Like
- Guaranteed Income Builder: The Withdrawal Base receives a contractual annual increase for up to 15 years.
- 5-, 7-, and 10-year choices: The surrender period can be matched more closely to the retirement plan.
- Level and Lifestyle payment choices: Retirees can choose stable or intentionally front-loaded income.
- Single- and joint-life income: The rider can cover one person or two spouses.
- Income can continue after contract depletion: Permitted lifetime payments continue when rider rules are followed.
- Income Multiplier upside: Strong index credits can increase the Withdrawal Base before and after activation.
- Income Enhancement Benefit: A qualifying ADL impairment can temporarily double the lifetime payment.
- Guaranteed minimum surrender value: Before activation, the contract provides a meaningful floor after the charge period.
- Annual penalty-free access: Up to 10% of beginning-of-year contract value is generally available.
- Nursing-care and terminal-illness waivers: Qualifying events can provide additional access.
What We Don’t Like
- The Withdrawal Base is not cash: It cannot be surrendered and is not paid as the death benefit.
- Income Builder fee: The annual charge is based on the Withdrawal Base and deducted from the contract value.
- Income Multiplier is performance-based: Weak or zero index credits can produce far less income-base growth than an optimistic illustration.
- Multiplier fee still applies: The lower rider charge does not make a weak performance-based payout competitive.
- Lifestyle income drops: The legacy-phase payment can be materially lower than the active-phase amount.
- Excess withdrawals can permanently reduce income: Taking more than the permitted amount proportionally lowers the guarantee.
- Renewal-rate risk: Future fixed and index-crediting terms remain under insurer control.
- Care enhancement is temporary: It is not a permanent long-term care doubler.
- Market Value Adjustment: Excess withdrawals and applicable annuitizations can be affected by market rates.
- Longer versions require justification: A 7- or 10-year surrender period should produce a clear advantage over the 5-year contract.
What Is ForeIncome II?
ForeIncome II is a single-premium fixed indexed annuity issued by Forethought Life Insurance Company. It includes a required guaranteed lifetime withdrawal benefit with two income-base growth choices selected at issue.
The contract value can earn fixed or index-linked interest and supports surrender value, withdrawals, and the death benefit. The separate Withdrawal Base is an accounting value used only to calculate the Lifetime Annual Payment. These annuity values can grow differently.
ForeIncome II Product Details
| Issuing company | Forethought Life Insurance Company |
|---|---|
| Product type | Single-premium fixed indexed annuity with required GLWB |
| Issue ages | Generally 45 through 85 |
| Income activation age | Generally age 55 or older |
| Minimum premium | $25,000 |
| Withdrawal-charge periods | 5, 7, or 10 years; state and firm variations apply |
| Income-base choices | Guaranteed Income Builder or Income Multiplier |
| Rider fees | Different annual percentages of the Withdrawal Base for the two benefit choices |
| Payment options | Level Payment; Lifestyle Payment with Guaranteed Income Builder |
| Normal free withdrawal | Up to 10% of beginning-of-year contract value |
| MVA | Applies to applicable excess withdrawals and certain annuitizations |
| Income enhancement | Temporary two-times payment after qualifying ADL impairment |
Guaranteed Income Builder Benefit
The Guaranteed Income Builder increases the Withdrawal Base by a stated percentage of premium each year for up to 15 years or until income begins. The increase is a guaranteed roll-up, but it is calculated using simple annual credits rather than compounding on the growing Withdrawal Base.
This is the type of income design we prefer because the benefit-base path does not depend on future index gains. A withdrawal before activation can reduce the Withdrawal Base and can prevent a scheduled increase for that year.
When income begins, the Withdrawal Base stops receiving the scheduled credits, and the owner selects Level or Lifestyle payments.
Income Multiplier Benefit
The Income Multiplier grows the Withdrawal Base using a multiple of interest credited to the contract.
- Before activation: The Withdrawal Base receives a multiple of credited interest.
- After activation: The Withdrawal Base can continue receiving interest-based increases while contract value remains and rider conditions are met.
- Anniversary step-up: If the contract value exceeds the Withdrawal Base, the base can be reset upward under the rider rules.
The design has more upside, but no interest credit means no performance-based increase. Future caps, participation rates, spreads, and fixed rates directly affect the result.
We would use this rider only when the guaranteed payout at the planned start date is competitive without assuming favorable market performance.
Guaranteed Income Builder Versus Income Multiplier
| Feature | Guaranteed Income Builder | Income Multiplier |
|---|---|---|
| Pre-income growth | Contractual annual credits based on premium | Multiple of interest credited to the contract |
| Dependence on index performance | Low for the guaranteed roll-up | High |
| Growth after activation | Scheduled roll-up stops | Interest-based increases can continue for a period while value remains |
| Rider fee | Higher | Lower |
| Our preference | Preferred for deferred guaranteed income | Niche choice when guaranteed income is competitive without optimistic assumptions |
How Lifetime Income Is Calculated
At activation, the issued withdrawal percentage is applied to the Withdrawal Base. The percentage depends on age, single- or joint-life coverage, and the selected rider.
Joint-life income uses the younger spouse’s age and generally pays a lower percentage because the guarantee may continue over two lifetimes. The payment can continue after the contract value reaches zero when permitted withdrawals deplete the account.
Ask for the guaranteed annual and monthly payment in dollars and verify what the surviving spouse receives after the first death.
Level Payment Option
The Level Payment Option provides a stable Lifetime Annual Payment based on the issued percentage and Withdrawal Base. It is available with the Guaranteed Income Builder and is the structure we generally prefer.
A level payment can lose purchasing power over time, but it avoids a scheduled late-life reduction. Separate liquid assets and investment growth can be used to address inflation.
Lifestyle Payment Option
The Lifestyle Payment Option is available with the Guaranteed Income Builder and must generally be selected by age 70. It uses three payment phases:
- Active phase: Higher income during the earlier retirement years.
- Steady phase: Income returns to the ordinary level percentage.
- Legacy phase: Income drops to a lower late-life percentage.
This can fit a retiree who deliberately wants more spending money early. It should not be sold as an increasing-income option. The payment eventually declines. Compare cumulative payments and the later-life floor through an annuity payout calculation.
Rider Fees
The annual rider charge is calculated from the Withdrawal Base and deducted from the contract value. The Guaranteed Income Builder costs more than the Income Multiplier under the current design.
The higher fee can be worthwhile when the guaranteed payout is materially better. The lower fee does not make the performance-based option superior when it guarantees less income.
Index Crediting and Renewal Risk
The contract value can earn interest through a fixed strategy and index-linked strategies. The owner is not directly invested in the market, and negative index performance does not directly reduce the protected value.
Most crediting terms can change at renewal. This is especially important for the Income Multiplier because weak future crediting terms reduce the benefit-base growth. Review renewal-rate risk rather than relying on backtested illustrations.
Income Enhancement Benefit
The benefit can double the Lifetime Annual Payment for up to five years after the covered person has been unable to perform at least two activities of daily living for the required period and meets certification requirements.
The contract value must remain above the rider’s required threshold for the enhancement to continue. This is temporary supplemental income, not reimbursement or indemnity care coverage.
Compare actual long-term care insurance when the primary objective is funding home care, assisted living, or nursing-home expenses.
Liquidity, Surrender Charges, and MVA
ForeIncome II generally allows up to 10% of beginning-of-year contract value to be withdrawn without the normal charge. Amounts above the allowance can trigger withdrawal charges and a Market Value Adjustment.
After activation, withdrawals above the Lifetime Annual Payment can proportionally reduce future income. Someone expecting irregular large withdrawals should keep more liquid assets outside the annuity or compare annuities with stronger liquidity.
Guaranteed Minimum Surrender Value and Death Benefit
Before GLWB activation, the guaranteed minimum surrender value is generally based on premium less withdrawals and can support surrender value, annuitization value, and the death benefit after the withdrawal-charge period when it exceeds contract value.
The Withdrawal Base is not the death benefit. Beneficiaries receive the remaining contract-based amount. Lifetime withdrawals and rider fees reduce what is left, and no account value may remain after the contract is depleted.
Someone focused on family value should compare annuities with enhanced death benefits or life insurance rather than using an income rider as a legacy product.
Tax Treatment
Interest in a nonqualified annuity grows tax-deferred and is generally taxed as ordinary income when withdrawn. After the contract value reaches zero, continued lifetime payments are generally fully taxable.
An IRA already provides tax deferral. ForeIncome II should be selected for its guaranteed income and insurance provisions. Coordinate qualified money with the household’s IRA and rollover strategy.
Who Should Consider ForeIncome II?
- A retiree seeking guaranteed lifetime income without permanent annuitization.
- A buyer whose Guaranteed Income Builder payout is near the top of the market.
- A person who prefers a contractual benefit-base roll-up over market-dependent growth.
- A married couple seeking joint-life income.
- A retiree who values a temporary ADL-based income enhancement.
- Someone with enough liquid assets outside the annuity to avoid excess withdrawals.
Who Should Avoid It?
- A buyer who believes the Withdrawal Base is cash.
- Someone selecting the Income Multiplier based on optimistic index illustrations.
- A retiree who may need substantial irregular access.
- Someone choosing a longer surrender schedule without a clear payout advantage.
- A buyer relying on the Income Enhancement Benefit as the only long-term care plan.
- A consumer whose primary objective is accumulation or legacy rather than income.
Other Insurance Coverage to Consider
- Long-term care insurance: Provides dedicated benefits for qualifying care expenses beyond the temporary income enhancement.
- Life insurance: Can replace legacy value expected to be depleted by lifetime withdrawals.
- Medicare Supplement coverage: Helps control healthcare expenses separately from the annuity income plan.
Alternatives to Compare
A competing guaranteed-roll-up GLWB: Compare the highest contractual payout from A- or better-rated insurers.
Income 150+ SE: Better suited to buyers who want scheduled Withdrawal Base bonuses and expect income within roughly ten years.
A lower-fee income annuity: A lower rider cost can preserve more account value when the guaranteed payout is equal or higher.
A SPIA for a narrow use case: Immediate annuitization is mainly useful for early-retirement tax planning, Medicaid planning, or a period-certain Social Security bridge. Compare SPIA and GLWB income first.
Our Final Recommendation
We recommend quoting ForeIncome II using the Guaranteed Income Builder, Level Payment Option, and shortest contract that produces the competitive payout. The guaranteed roll-up is dependable and the payout can be strong. Use the Income Multiplier only when the guaranteed result is attractive without relying on future index performance.
Contact The Annuity Expert for free quotes and a no-obligation comparison of ForeIncome II with competing GLWB annuities from A- or better-rated insurers. We will compare Guaranteed Income Builder and Income Multiplier payouts, rider fees, Level and Lifestyle income, spouse continuation, liquidity, care enhancements, death benefits, and insurer strength before you buy coverage.
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Frequently Asked Questions
Which ForeIncome II benefit do we prefer?
We prefer the Guaranteed Income Builder for deferred income because its Withdrawal Base growth does not depend on future index credits.
Is the Withdrawal Base cash?
No. It is an accounting value used to calculate lifetime income and is not available for surrender or paid as the death benefit.
What happens in a zero-crediting year under Income Multiplier?
No index interest generally means no performance-based Withdrawal Base increase for that year.
What is Lifestyle income?
It begins with a higher active-phase payment, returns to the level amount in the steady phase, and drops to a lower legacy-phase percentage at advanced ages.
Can income continue after the contract value reaches zero?
Yes, when the value is depleted by permitted lifetime payments and all rider rules are followed.
Is the Income Enhancement Benefit long-term care insurance?
No. It temporarily doubles the lifetime payment after a qualifying ADL impairment and sufficient contract value. It does not reimburse actual care expenses.