NAC VersaChoice 10 Fixed Index Annuity Overview
The NAC VersaChoice 10 Fixed Index Annuity, issued by North American Company for Life and Health Insurance, is a fixed indexed annuity designed to enhance your retirement savings with growth potential and downside protection. With a minimum premium of $20,000, it aims to provide a balance between growth and security, making it an appealing choice for those looking to diversify their retirement portfolio.
- Growth Potential and Downside Protection: This annuity grows based on the performance of selected index accounts or a fixed account, ensuring your premium is protected from market downturns. Multiple index strategy options, like Monthly Point-to-Point, Annual Point-to-Point, and Two-year Point-to-Point, tied to indices such as the S&P 500, Fidelity Multifactor Yield Index, and Morgan Stanley Dynamic Global Index, allow you to customize your growth strategy according to your financial goals.
- Tax Deferral: The NAC VersaChoice 10 grows on a tax-deferred basis, allowing your investment to compound over time without immediate tax implications. This feature enhances the growth potential of your retirement savings by deferring taxes until you access the funds.
- Enhanced Liquidity Benefit (ELB) Rider: One of the standout features is the optional ELB rider, which offers enhanced access to funds. This includes penalty-free withdrawals of up to 20% after the first year and return of premium options after three years. The ELB rider adds significant flexibility, making it easier to access your money when needed.
- Flexible Payout and Legacy Benefits: The annuity provides various annuitization options, including income for a specified period, life income, and joint survivor life income. It also offers a death benefit, ensuring that your beneficiaries receive a lasting legacy.
Our Professional Opinion on the NAC VersaChoice 10 Annuity
We recommend considering the NAC VersaChoice 10 when the buyer’s main goal is protected accumulation with unusually strong liquidity options. North American is a financially strong insurance company, and the optional Enhanced Liquidity Benefit rider gives this product a legitimate niche that many fixed indexed annuities do not offer.
The ELB rider can increase annual penalty-free access after the first contract anniversary, add a conditional return-of-premium feature after the required holding period, waive surrender charges and the Market Value Adjustment after a qualifying ADL event, and create a five-year payout based on an enhanced accumulation value.
That combination can be very useful for someone who wants safe growth but is concerned about needing access to a larger portion of the money later. It may also be worth comparing for someone who cannot qualify for traditional long-term care insurance but can perform all six activities of daily living when the rider is issued.
However, the product is not actual long-term care insurance. The ADL benefits require the contract’s eligibility conditions to be met, including physician certification. The enhanced payout does not reimburse the actual cost of care, and choosing the five-year payout terminates the contract’s other rights and benefits, including the surrender value and death benefit.
For accumulation, we like that the contract includes straightforward S&P 500 choices in addition to proprietary indexes. We also like the Accumulation Value true-up, which may refund the amount by which eligible strategy charges exceed credited interest at the end of the surrender period.
The true-up is narrower than it sounds. It does not refund the ELB rider fee, does not make every withdrawal whole, and can be lost after withdrawals above the penalty-free amount. It should be treated as a useful backstop for strategy-fee risk—not a blanket principal guarantee against every contract deduction.
We are also cautious about paying strategy fees for enhanced participation rates. The fee is deducted even when the strategy earns little or no interest, and the enhanced participation rate is guaranteed only for the applicable crediting term. North American can establish different caps and participation rates when a new term begins.
This is not a cap-lock annuity. Someone whose top priority is predictable safe growth should compare products with traditional-index cap locks, participation-rate guarantees, or a MYGA that guarantees its fixed rate for the selected term.
Another major limitation is that NAC VersaChoice 10 does not include a flexible guaranteed lifetime withdrawal benefit. The contract offers traditional annuitization, but annuitization is generally permanent and ends the contract’s other rights and benefits.
Our bottom line: NAC VersaChoice 10 is a good annuity for the right liquidity-focused buyer. We like the strong insurer, traditional S&P 500 choices, ELB rider, return-of-premium provision, ADL access, and Accumulation Value true-up. We do not like the long surrender period, MVA, renewal-rate risk, fee-based strategies, or the lack of a GLWB.
What We Like
- Strong Insurance Company: North American has strong financial-strength ratings and comfortably exceeds our A- minimum standard.
- Enhanced Liquidity: The ELB rider can substantially increase annual penalty-free access after the first contract anniversary.
- Conditional Return of Premium: After the required holding period, the ELB rider can allow the owner to terminate the contract and receive no less than net premium, subject to the rider’s adjustments and conditions.
- ADL-Based Surrender Waiver: A qualifying inability to perform two of six ADLs can provide access to the accumulation value without surrender charges or an MVA.
- ADL-Based Payout: A qualifying owner can elect a five-year payout based on an enhanced accumulation value after the applicable waiting period.
- No Medical Underwriting for the Rider: The ADL features do not require traditional medical underwriting, although the annuitant must be able to perform all six ADLs when the rider begins.
- Traditional S&P 500 Strategies: Buyers are not forced to allocate everything to engineered or volatility-controlled indexes.
- Accumulation Value True-Up: The contract may refund eligible strategy charges that exceed total credited interest at the end of the surrender period, subject to the endorsement conditions.
- Tax-Deferred Growth: Nonqualified earnings generally grow tax-deferred until money is withdrawn.
- Standard Death Benefit: Beneficiaries generally receive the remaining accumulation value or applicable minimum value before annuitization.
What We Don’t Like
- No Guaranteed Lifetime Withdrawal Benefit: The contract is designed for accumulation and liquidity rather than flexible guaranteed lifetime income.
- Long Surrender Period: Excess withdrawals can trigger surrender charges for approximately a decade.
- Market Value Adjustment: An MVA may further reduce the amount received from an excess withdrawal or full surrender.
- No Bailout Provision: A future reduction in cap or participation rates does not automatically allow the owner to leave without surrender charges.
- Renewal-Rate Risk: The fixed rate, caps, and participation rates can change when the applicable crediting term renews.
- Strategy Fees: Enhanced participation strategies charge a fee that can reduce the account value when credited interest is low or zero.
- ELB Rider Fee: The annual rider charge is deducted from the accumulation value and is not covered by the Accumulation Value true-up.
- Engineered Indexes: Several choices use volatility controls, excess-return calculations, internal deductions, or limited live histories.
- ADL Benefit Is Not Long-Term Care Insurance: The rider provides contract access and a temporary payout rather than a separate pool of comprehensive care benefits.
- Enhanced Payout Ends Other Benefits: Electing the five-year ADL payout terminates the contract’s other rights and benefits, including the surrender value and death benefit.
- True-Up Has Limitations: The benefit applies only to eligible strategy-fee shortfalls and can terminate after withdrawals above the penalty-free amount.
NAC VersaChoice 10 Product Details
| Product Type | Modified Single-Premium Fixed Indexed Annuity |
| Primary Purpose | Protected Accumulation With Optional Enhanced Liquidity |
| Surrender Period | Approximately 10 years; state variations apply |
| Base Penalty-Free Access | Up to a portion of beginning-of-year accumulation value each contract year |
| Enhanced Liquidity Benefit Rider | Optional annual-fee rider providing enhanced withdrawals, conditional return of premium, and ADL-based benefits |
| Market Value Adjustment | Yes |
| Bailout Provision | No |
| Fixed Account | One-year declared interest rate |
| Index Choices | S&P 500 and several engineered or volatility-controlled indexes |
| Crediting Terms | One- and two-year strategies, depending on the selected allocation |
| Fee-Based Strategies | Optional enhanced-participation strategies |
| Guaranteed Lifetime Withdrawal Benefit | Not Available |
| Death Benefit | Generally the remaining accumulation value or applicable minimum value |
| Insurance Company Rating | A+ from AM Best at the time of this review |
North American is an excellent annuity company. Its financial strength is not our concern with NAC VersaChoice 10. The decision comes down to whether the ELB rider’s liquidity features justify the rider charge and whether the current accumulation terms are competitive with other strong insurers.
Product features, index options, state availability, fees, and renewal terms can change. Review the current state-specific illustration, disclosure, and contract before purchasing.
Retirement Accounts Accepted
The NAC VersaChoice 10 Fixed Index Annuity can be funded through various types of retirement accounts, enhancing its flexibility and accessibility. These include:
- Non-Qualified
- IRA
- 401(k)
- IRA Rollover
- IRA Transfer
- SEP IRA
- IRA-Roth
- SIMPLE IRA
- NQ Stretch
- TSP
Final Thoughts
The NAC VersaChoice 10 is a good niche annuity for protected accumulation when enhanced liquidity is a major priority. The optional ELB rider is what makes this product different. It can provide larger penalty-free withdrawals, a conditional return-of-premium feature, an ADL-based surrender-charge waiver, and a five-year payout based on an enhanced accumulation value.
We would not purchase this annuity for guaranteed lifetime income because it does not include a guaranteed lifetime withdrawal benefit. We also would not use it solely for maximum accumulation without comparing fixed indexed annuities that provide stronger contractual cap or participation-rate guarantees.
The ELB rider can be valuable for someone who wants more access to retirement money and may have difficulty qualifying for traditional long-term care coverage. However, the ADL payout is not long-term care insurance, and selecting that payout ends the contract’s other rights and benefits, including the surrender value and death benefit.
Our bottom line: NAC VersaChoice 10 is good for liquidity, just OK for pure accumulation, and not designed for flexible guaranteed lifetime income. The right buyer values North American’s financial strength, can leave the money in place through the surrender period, and specifically needs the ELB rider’s access features.
Compare NAC VersaChoice 10 With Other Fixed Indexed Annuities
The strongest accumulation annuity can change as insurance companies adjust caps, participation rates, fixed rates, surrender periods, and liquidity provisions. Compare today’s best fixed indexed annuities for safe accumulation, liquidity, guaranteed lifetime income, and other retirement goals.
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