Oceanview CapLock Fixed Indexed Annuity Review
The Oceanview CapLock Fixed Indexed Annuity is an accumulation-focused fixed indexed annuity designed for people who want principal protection, index-linked growth potential, and more certainty about future cap rates.
The feature that separates this annuity from most competing FIAs is straightforward: you can lock your cap for the entire 5- or 7-year surrender period. Instead of receiving an attractive cap in year one and hoping the insurance company keeps it competitive at renewal, you know the cap upfront for the entire term.
Even better, Oceanview does not force you to use only the S&P 500 to get the cap lock. The guaranteed cap strategies are available using the S&P 500, Nasdaq-100, and Russell 2000.
Oceanview CapLock Product Details
| Product Type | Fixed Indexed Annuity |
| Primary Purpose | Accumulation |
| Available Terms | 5 Years and 7 Years |
| Minimum Premium | $20,000 |
| 5-Year Maximum Issue Age | 89 + 364 Days |
| 7-Year Maximum Issue Age | 84 + 364 Days |
| Free Withdrawals | 10% annually after the first contract year |
| Market Value Adjustment | Yes, except where otherwise required by state law |
| Premium Type | Single Premium |
| Financial Strength | Oceanview is rated A (Excellent) by AM Best |
For more information about the insurance company itself, see our Oceanview annuity review.
Our Professional Opinion
We really like the Oceanview CapLock for safe accumulation. It is one of our favorite fixed indexed annuities for somebody who wants market-linked growth potential without stock market losses and does not want to worry about the insurance company lowering their cap every year.
One of our biggest complaints about fixed indexed annuities is renewal-rate risk. A company can offer a great cap when you purchase the annuity and then lower the cap while your money is still locked inside the surrender period. That stinks because you made a multi-year commitment to the insurance company while the insurance company did not necessarily make the same commitment to your upside potential.
Oceanview solves that problem. The cap is declared when the policy is issued and remains locked for the full 5- or 7-year surrender period on the guaranteed cap strategies.
What makes Oceanview especially good is that you are not forced to use the S&P 500. You can choose a guaranteed cap strategy tied to the S&P 500, Nasdaq-100, or Russell 2000.
We think that is a significant advantage. Someone who wants exposure linked to large-cap growth companies can use the Nasdaq-100. Someone who prefers exposure linked to smaller U.S. companies can use the Russell 2000. And someone who wants the traditional broad large-cap benchmark can stick with the S&P 500.
You get those choices without being pushed into a newly created engineered index with a complicated formula and an impressive-looking backtest. We prefer simple, recognizable indexes whenever the economics are competitive.
The other accumulation annuity we really like for this purpose is the Sagicor Sage Accumulator. Sagicor is particularly attractive for its guaranteed S&P 500 cap. Oceanview stands out when the buyer wants the cap lock but also wants the ability to choose the Nasdaq-100 or Russell 2000 instead of the S&P 500.
For someone whose primary objective is protected accumulation, we think Oceanview CapLock is a very good annuity. It is simple, the purpose is clear, and the cap-lock feature addresses one of the biggest weaknesses we see with traditional fixed indexed annuities.
What We Like
- Full-Term Cap Lock: The guaranteed cap is locked for the entire 5- or 7-year surrender period.
- Nasdaq-100 Cap Lock: Buyers who prefer a growth-oriented traditional index are not forced to use the S&P 500.
- Russell 2000 Cap Lock: Buyers can also use a traditional small-cap index with the guaranteed cap strategy.
- S&P 500 Cap Lock: The traditional S&P 500 remains available for buyers who prefer it.
- Traditional Indexes: We like using recognizable indexes instead of relying heavily on complicated engineered indexes.
- Annual Point-to-Point Crediting: The guaranteed cap strategies use straightforward one-year measurement periods.
- 5- and 7-Year Options: You can match the surrender period to your desired accumulation horizon.
- A-Rated Insurance Company: Oceanview meets our preference for using A- or better-rated insurance companies.
- 10% Annual Liquidity: Penalty-free withdrawals of up to 10% of the account value are available after the first contract year.
- RMD Friendly: Applicable required minimum distributions from qualified contracts can be taken without surrender charges or MVA under the contract provisions.
- No Explicit Annual Policy Fee: There is no separate annual administrative fee for owning the base annuity.
- Nursing Home and Terminal Illness Waivers: Qualifying events can provide additional access to the account without normal surrender charges.
What We Don’t Like
- No GLWB: This is an accumulation annuity, not one of our preferred products for guaranteed lifetime income.
- Guaranteed Strategies Must Be Chosen at Issue: The guaranteed cap strategies are only available when the contract is purchased.
- You Cannot Re-Enter the Cap Lock: If you move money out of a guaranteed cap strategy, you cannot later move back into one.
- A Locked Cap Can Eventually Become Less Competitive: If market conditions improve dramatically and new annuities offer substantially higher caps, your existing locked cap does not increase.
- Single Premium Only: This is not designed for someone who wants to make ongoing annual contributions.
- Market Value Adjustment: Withdrawals exceeding the penalty-free amount during the surrender period may be adjusted based on changes in interest rates.
- Surrender Period: Taking too much money out before the 5- or 7-year period ends can create surrender charges.
- Not Available in New York: Product availability varies by state.
How the Oceanview CapLock Works
The CapLock feature is simple.
You choose one of the available Guaranteed Cap Rate Strategies when you purchase the annuity. Oceanview declares the cap at issue and guarantees that cap for the entire surrender-charge period.
- 5-Year Contract: The guaranteed cap remains locked for five years.
- 7-Year Contract: The guaranteed cap remains locked for seven years.
Interest is measured annually. If the applicable index increases during the one-year period, interest is credited up to the guaranteed cap. If the index decreases, the indexed strategy earns 0% for that crediting period rather than participating in the market loss.
Your principal and previously credited interest are not reduced because the index declines.
Three Traditional Indexes With a Guaranteed Cap
This is one of our favorite parts of the Oceanview CapLock.
Most FIAs offer a traditional S&P 500 strategy, but many of the other available choices are engineered or volatility-controlled indexes. Oceanview gives you three recognizable indexes with the full-term cap lock.
S&P 500
The S&P 500 is the traditional large-cap U.S. stock market benchmark. This is the most familiar choice and the one many annuity buyers naturally understand.
Nasdaq-100
The Nasdaq-100 provides an alternative for someone who prefers an index with greater exposure to large growth-oriented companies.
We particularly like the fact that you can choose the Nasdaq-100 and still receive the same basic full-term cap-lock structure. You do not have to give up the rate guarantee simply because you want something other than the S&P 500.
Russell 2000
The Russell 2000 tracks smaller U.S. companies and gives buyers another traditional index option.
This can appeal to someone who wants an index linked to small-cap companies instead of concentrating exclusively on large-cap stocks.
Having the S&P 500, Nasdaq-100, and Russell 2000 available under the guaranteed cap feature is one of the biggest reasons we prefer Oceanview CapLock over many competing accumulation FIAs.
Other Index Crediting Strategies
Oceanview also offers non-guaranteed crediting strategies. Depending on current availability, these can include:
- S&P 500 annual point-to-point with a cap
- Nasdaq-100 annual point-to-point with a cap
- Russell 2000 annual point-to-point with a cap
- S&P 500 annual point-to-point with a participation rate
- S&P 500 two-year point-to-point with a participation rate
- S&P 500 monthly average with a cap
- S&P 500 Daily Risk Control strategies
- Fixed interest strategy
Those choices provide additional flexibility, but the guaranteed cap strategies are the reason we would buy this product.
What Happens If You Leave the Guaranteed Cap Strategy?
This is an important rule to understand before buying Oceanview CapLock.
The Guaranteed Cap Rate Strategies are only available at the time you apply for the annuity.
If you later move money from one of the guaranteed cap strategies into another crediting strategy, you cannot move that money back into a Guaranteed Cap Rate Strategy.
That does not mean you can never change your allocations. You can move among available non-guaranteed strategies. But once you voluntarily give up the cap lock, you cannot simply change your mind later and get it back.
For that reason, we would be careful about moving money out of the guaranteed strategy without a good reason.
5-Year vs. 7-Year Oceanview CapLock
We like both contract lengths. The correct choice comes down to how long you are comfortable committing the money and the guaranteed cap being offered when you purchase the annuity.
5-Year CapLock
The 5-year version provides the shortest surrender period. The guaranteed cap is locked for all five years.
This can be attractive for somebody who wants cap certainty but does not want a 7- or 10-year surrender commitment.
7-Year CapLock
The 7-year version extends the cap guarantee across the full seven-year surrender period.
If the 7-year cap is materially better when you purchase the contract and you are comfortable with the longer commitment, the additional two years can make sense.
We would compare the current terms rather than automatically choosing the longer contract.
Liquidity and Withdrawal Rules
Beginning after the first contract year, Oceanview generally allows you to withdraw up to 10% of the account value annually without surrender charges or a Market Value Adjustment.
Qualified contracts can also accommodate applicable required minimum distributions after the first contract year. Under the contract provisions, those RMD withdrawals are not subject to surrender charges or MVA even when the required distribution exceeds the normal 10% free-withdrawal amount.
Withdrawals exceeding the penalty-free allowance can be subject to surrender charges and a Market Value Adjustment.
California versions do not use the standard MVA structure.
Nursing Home and Terminal Illness Waivers
The contract includes certain nursing-home-confinement and terminal-illness waivers at no additional charge where approved.
These provisions can provide access to money without the normal surrender charge when the applicable qualifications are met.
However, a nursing home waiver is not the same thing as actual long-term care insurance. Someone concerned about paying for home health care, assisted living, or extended nursing care should evaluate dedicated coverage separately.
Death Benefit and Spousal Continuation
If the owner or annuitant dies before annuitization, beneficiaries generally receive the full contract value without surrender charges or an MVA.
A surviving spouse who is the sole primary beneficiary may also be able to use spousal continuation and continue the contract while maintaining its tax-deferred status.
This is a standard annuity death benefit rather than the enhanced legacy feature found on products specifically designed to multiply or restore a death benefit.
Does Oceanview CapLock Provide Lifetime Income?
Oceanview CapLock can be converted to lifetime income through annuitization, but it does not include a Guaranteed Lifetime Withdrawal Benefit.
That matters because annuitization generally requires converting the account into an income stream and giving up much of the flexibility associated with maintaining an account value.
If your primary goal is lifetime income, this is not where we would start. We would compare dedicated GLWB annuities from A- or better-rated insurance companies and determine which currently provides the most guaranteed income for your situation.
Who Should Consider Oceanview CapLock?
- People Seeking Safe Accumulation: You want growth potential without directly exposing the account to stock market losses.
- People Concerned About Renewal Rates: You do not want the insurance company lowering your cap every year after you purchase the annuity.
- People Who Want Traditional Index Choice: You want the ability to choose among the S&P 500, Nasdaq-100, and Russell 2000.
- People Who Dislike Engineered Indexes: You prefer recognizable indexes instead of complicated proprietary formulas and backtests.
- People With a 5- or 7-Year Time Horizon: You can leave the money in the contract through the surrender period.
Who Should Probably Buy Something Else?
If your main goal is maximizing guaranteed lifetime income, we would buy an annuity specifically designed for income instead.
If you need frequent or substantial access to the money, even a 5-year surrender period may be too restrictive.
If you want unlimited stock-market upside, an FIA is also the wrong tool. A cap is still a cap, even when that cap is guaranteed.
And if your only objective is earning a known guaranteed interest rate rather than index-linked growth, compare current fixed annuity rates before choosing an FIA.
What Happens After the Surrender Period?
Once the 5- or 7-year surrender period ends, you can generally withdraw the full account value without surrender charges or MVA, reallocate among available strategies, or elect an available settlement option.
If you leave money in a Guaranteed Cap Rate Strategy after the surrender period ends, that money transitions to a non-guaranteed cap strategy using the declared rates then in effect.
The original cap lock does not continue forever. It is designed to match the surrender period you selected.
Other Insurance You May Need
An accumulation annuity solves one problem: protecting and growing a portion of your money without direct market losses. It does not replace every other form of insurance.
- Life Insurance: Consider life insurance when leaving a predictable death benefit to your family is an important objective.
- Long-Term Care Planning: Dedicated coverage can protect retirement assets if you need extended care later in life.
- Hybrid Life and Long-Term Care Insurance: A hybrid policy can combine a death benefit with benefits for qualifying long-term care expenses.
What We Recommend
For safe accumulation, Oceanview CapLock is one of our favorite fixed indexed annuities.
The reason is not complicated. You get principal protection, straightforward annual point-to-point crediting, a cap that can be locked for the full surrender period, and the ability to choose among the S&P 500, Nasdaq-100, and Russell 2000.
The Nasdaq-100 and Russell 2000 options are particularly important to us because they give the buyer legitimate alternatives to the S&P 500 without forcing them into a complicated engineered index.
We would still compare the guaranteed cap available when you purchase the contract against competing accumulation annuities. A great product can still be the wrong purchase if another A- or better-rated insurance company is offering materially better terms for the same job.
But as a product design, Oceanview CapLock is good at exactly what we want it to do: safe accumulation with more control over future cap rates.
Compare Oceanview CapLock Before You Buy
Cap rates change over time. Before purchasing Oceanview CapLock, compare the current guaranteed caps, surrender terms, liquidity, and index choices against other A- or better-rated accumulation annuities.
Contact The Annuity Expert for free quotes and a no-obligation side-by-side comparison. We can help determine whether the S&P 500, Nasdaq-100, Russell 2000, or another annuity strategy makes the most sense for your retirement savings.
If you already own an annuity and are considering moving into Oceanview CapLock, request a free annuity second opinion before making the exchange.
Book A Free Consultation
Get help from a licensed financial professional. This service is free of charge.
Let Us Answer Your Questions
Not quite ready for a meeting, but you have a question that needs answering? We’re happy to help. Leave an inquiry below, and one of our staff will respond via email.
Frequently Asked Questions
Is the Oceanview CapLock annuity safe?
The annuity protects principal from direct stock-market losses. Guarantees depend on Oceanview’s financial strength and claims-paying ability rather than FDIC insurance.
How long is the cap locked?
The guaranteed cap is locked for the full surrender period: five years on the 5-year contract or seven years on the 7-year contract.
Which indexes can use the guaranteed cap?
The guaranteed cap strategies are available with the S&P 500, Nasdaq-100, and Russell 2000 annual point-to-point strategies.
Can I switch back into the guaranteed cap later?
No. The guaranteed strategies are available only when the contract is issued. If you move out of one, you cannot later re-enter a Guaranteed Cap Rate Strategy.
Does Oceanview CapLock have a GLWB?
No. It is primarily an accumulation annuity. Lifetime income is available through settlement or annuitization options rather than a flexible GLWB rider.