Our Professional Opinion on the Reliance Standard Eleos Annuities
Eleos would not be our first choice for a five-year MYGA when you may need to withdraw more than its allowance. Go over the limit and surrender charges can apply to the entire amount withdrawn that contract year—not just the excess. That rule stinks, and it makes an otherwise straightforward fixed annuity harder to recommend.
Reliance Standard Life Insurance Company is a great insurance company. Its A++ (Superior) rating from AM Best is the highest available and exceeds our A− minimum. Its financial strength is a reason to trust the guarantees, but the contract still has to earn our recommendation.
The five-year guaranteed rate and choice of MVA or non-MVA versions are useful. We would start with Eleos-SP if its rate is competitive, because it avoids the additional market value adjustment. We would not choose either version without understanding the unusual withdrawal rules.
Compare both with other five-year fixed annuities and the fixed annuity rates from insurers rated A− or higher. Match the deposit, guarantee period, withdrawal allowance, and MVA; the highest rate is not automatically the best deal.
What We Like
- Five-year guarantee: The initial interest rate is fixed for the full five-year term.
- No-MVA option: Eleos-SP avoids the additional market value adjustment.
- First-year allowance: Eligible withdrawals can begin in the first contract year.
- Strong insurer: Reliance Standard has AM Best’s highest financial-strength rating.
What We Don’t Like
- The entire withdrawal can be charged: Exceed the allowance and the charge can apply to all withdrawals taken that year.
- Free withdrawals can be charged later: A full surrender within 12 months can trigger charges on earlier withdrawals, subject to state exceptions.
- One request per year: The free-withdrawal provision limits the number of requests.
- The MVA adds uncertainty: Eleos-MVA can adjust the proceeds of an early withdrawal or surrender.
Reliance Standard Eleos Annuity Overview
Eleos-SP and Eleos-MVA are five-year fixed annuities funded with a single deposit. The minimum deposit is $10,000, and the maximum issue age is generally 85. Interest is credited daily and compounded annually.
Key Features
- Guarantee: Five years of fixed interest; annual declarations afterward.
- Access: Up to 10% of the deposit in year one and 10% of annuity value afterward, subject to the contract rules.
- Withdrawal requests: One penalty-free request per contract year; payments may be arranged under that request.
- Surrender period: Five years, with a separate MVA on the MVA version.
- Health waiver: Eligible nursing-home or hospital confinement can permit additional access.
- Death benefit: Annuity value is generally payable to beneficiaries before annuitization.
Eleos-SP vs. Eleos-MVA
Eleos-SP does not have a market value adjustment. Eleos-MVA can adjust an applicable early withdrawal up or down as interest rates change. Both have surrender charges.
A higher MVA rate may compensate you for that extra risk, but only if the difference is worthwhile for your deposit and the time you expect to keep the annuity. If you want a simpler exit calculation, start with the SP version.
The Withdrawal Rule You Need to Know
In year one, the penalty-free withdrawal allowance is generally up to 10% of the deposit. After that, it is generally up to 10% of annuity value. The minimum request is $500. One request can arrange payments throughout the year, but you cannot assume you can make unlimited independent requests.
If you exceed the allowance, surrender charges can apply to the entire amount withdrawn during that contract year. With Eleos-MVA, an MVA can also apply. A small mistake can therefore cost more than expected.
A full surrender can also cause charges to apply to withdrawals taken in the preceding 12 months, even if those withdrawals were originally penalty-free. Eleos-MVA can also apply the MVA. The 12-month rule does not apply in New Jersey for either version or in Washington for Eleos-SP. Confirm the terms for your state.
If you plan to live on the interest: Compare the payment with an annuity that offers a guaranteed lifetime withdrawal benefit. Use the same deposit, income start date, and single or joint coverage. Interest withdrawals do not guarantee a paycheck for life.
If you want withdrawals without lifetime income: Compare an annuity with a real upfront bonus added to the account. A larger balance might earn more interest dollars and leave more after identical withdrawals, even with a lower rate. Compare the same withdrawal dates, fees, surrender values, and bonus rules.
If your health is poor or you expect a shorter retirement: Compare what your beneficiaries would actually receive from an annuity whose bonus fully vests and is payable on a qualifying death. This annuity pays its applicable death benefit; it does not pay future unearned interest in advance.
Surrender Charges
Eleos has a five-year surrender charge schedule. Remember that the annual charge can apply to the entire year’s withdrawal if you exceed the free allowance.
| Contract year | Surrender charge |
|---|---|
| 1 | 8% |
| 2 | 7% |
| 3 | 6% |
| 4 | 5% |
| 5 | 4% |
| 6+ | 0% |
We would keep emergency money elsewhere. An 8% first-year charge is a bad surprise when a family expense cannot wait.
Nursing Home and Hospital Access
An eligible annuitant who was age 74 or younger at issue may qualify for a confinement waiver of up to 25% of annuity value in each year of qualifying confinement. It must last at least 90 consecutive days and include at least one day after the first contract year. Other conditions and state variations apply.
This is access to your annuity, not long-term care insurance. It will not replace an emergency fund or pay a separate pool of care benefits.
What Happens After Five Years?
After the initial guarantee, Reliance Standard declares interest one year at a time, subject to the guaranteed minimum. The initial surrender period and the initial MVA period end. We like being able to reassess the money without assuming the first rate lasts forever.
Death Benefit and Spousal Continuation
Before annuitization, the death benefit is generally the annuity value. Withdrawals reduce the amount remaining. An eligible spouse may be able to use spousal continuation; confirm the beneficiary designation and the terms of your particular contract.
Our Final Verdict on Reliance Standard Eleos
We would compare other five-year MYGAs before buying Eleos. The company is excellent and Eleos-SP avoids an MVA, but charging the entire withdrawal after you exceed the allowance is a serious drawback. We would only choose it if the actual offer is strong enough to justify those restrictions and you have money elsewhere for unexpected expenses.
Contact The Annuity Expert for free annuity quotes. We will compare the rates, withdrawal rules, and alternatives for your retirement goals.
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