Our Professional Opinion on the Reliance Standard Keystone Index Annuity
We would not recommend Keystone Index 10 for most accumulation buyers. Ten years is too long to accept surrender charges when Reliance Standard can change the cap and participation rate each year. An attractive first-year cap does not solve that problem.
Keystone Index 5 is the version we would examine first. It offers straightforward S&P 500 strategies, access beginning in the first year, and no market value adjustment. Those are meaningful advantages, but the five-year version still has to compete on its actual crediting terms.
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.
Compare Keystone with an indexed annuity that locks a competitive cap or participation rate for the full surrender period. For example, NAC Guaranteed Allocation offers a term-long lock but requires preset index blends; Keystone lets you use traditional S&P 500 strategies. Compare both with fixed annuity rates as well: a MYGA gives you a guaranteed result instead of a potential index credit.
What We Like
- Traditional index: Keystone offers S&P 500 crediting choices instead of requiring an unfamiliar engineered index.
- Annual crediting: The indexed strategies measure results annually.
- No MVA: An early excess withdrawal can incur a surrender charge, but no additional market value adjustment.
- First-year access: Up to 10% of the deposit may be withdrawn without a surrender charge in year one.
- Choice of terms: The five-, seven-, and ten-year versions offer different commitment lengths.
What We Don’t Like
- No full-term cap lock: The insurer can change the cap and participation rate annually while surrender charges continue.
- Ten years is a long commitment: We would not pick the 10 just because its initial offer looks better.
- Only one free-withdrawal request: You must plan your withdrawals under the contract’s request rules.
- Scheduled payments require the fixed strategy: You cannot assume your indexed allocation will support systematic withdrawals.
- Limited growth: Caps and participation rates limit the index gains used to calculate interest.
Keystone Index Annuity Overview
Keystone is a single-premium fixed indexed annuity with five-, seven-, and ten-year surrender periods. The minimum deposit is $10,000. You can allocate money to a fixed-interest strategy, S&P 500-linked strategies, or a combination.
Key Features
- Index: S&P 500, with annual point-to-point and monthly-average choices.
- Crediting terms: Caps, participation rates, and fixed interest can change annually, subject to contract minimums.
- First-year withdrawals: Up to 10% of the deposit, subject to the request rules.
- Later withdrawals: Up to 10% of annuity value each year, subject to the contract rules.
- MVA: None; surrender charges may still apply.
- Health benefits: Qualifying nursing confinement or terminal illness may allow additional access.
- Death benefit: The greater of annuity value or the applicable guaranteed minimum values.
How Keystone Credits Interest
The annual point-to-point strategies measure the S&P 500 from the beginning to the end of the contract year. One uses a cap and another a participation rate. The monthly-average option compares the average of monthly index values with the beginning value and applies a cap. The fixed strategy earns a declared rate.
We would start by comparing the annual point-to-point S&P 500 choices. They are easier to understand than a custom index with a large participation rate. The cap is a limit on interest, not a promised return. A negative index result produces no index interest for that year, not a direct index loss.
The Cap Can Change While You Are Still Locked In
The initial cap, participation rate, and fixed interest rate are guaranteed for the first contract year. Reliance Standard may declare new terms each year after that, subject to the contract minimums. The 10-year version does not lock its starting cap for 10 years.
This is our biggest complaint. If your cap falls in year two, you could face years of surrender charges before you can move all your money without a charge. A lower cap locked for a full term can be more useful than a higher starting cap that is guaranteed for only one year—but compare the actual offers, because a lock does not guarantee index gains.
Keystone’s Guaranteed Minimum Annuity Value
Keystone includes a guaranteed minimum annuity value calculated from 100% of your deposit, reduced for withdrawals and compounded annually at the guaranteed minimum rate in your contract. If you surrender during the charge period, applicable surrender charges reduce that calculation; a separate minimum contract value can apply if it is greater.
We like having a guaranteed minimum alongside the index opportunity. It is a contract calculation, not a promise that the displayed account balance or early surrender proceeds will equal your deposit plus that rate. Ask for the applicable guaranteed minimum and compare the amount available at the same date with a MYGA.
Withdrawals and Liquidity
The free-withdrawal allowance is generally up to 10% of your deposit in year one and 10% of annuity value each year afterward. Only one penalty-free withdrawal request is permitted per contract year, with a $500 minimum request. A request may arrange payments under the contract rules.
Systematic withdrawals can come only from the fixed-interest strategy. If you want a monthly payment, your allocation matters. We do not like the one-request limit for someone who needs frequent, unpredictable access.
Surrender Charges
A surrender charge applies to the amount above the free allowance during the applicable period. There is no market value adjustment, so an early withdrawal does not have that additional adjustment.
| Contract year | Keystone 5 | Keystone 7 | Keystone 10 |
|---|---|---|---|
| 1 | 9% | 9% | 9% |
| 2 | 8% | 8% | 9% |
| 3 | 7% | 7% | 8% |
| 4 | 6% | 6% | 7% |
| 5 | 5% | 5% | 6% |
| 6 | 0% | 4% | 5% |
| 7 | 0% | 3% | 4% |
| 8 | 0% | 0% | 3% |
| 9 | 0% | 0% | 2% |
| 10 | 0% | 0% | 1% |
| 11+ | 0% | 0% | 0% |
State and issue-age schedules can differ. Check your contract and ask for the surrender value before an early exit. No MVA does not mean an early withdrawal is free.
Nursing Care and Terminal Illness
An eligible annuitant can use a nursing care waiver for up to 25% of annuity value each year of qualifying confinement. The annuitant generally must be age 74 or younger at issue, and qualifying confinement must last 90 consecutive days and include at least one day after the first contract year.
After the first contract year, a qualifying terminal illness diagnosis can allow the full annuity value to be withdrawn without surrender charges. The terminal illness benefit is not available in New Jersey. These waivers provide access to your money, not long-term care insurance; other conditions and state restrictions apply.
Death Benefit and Your Spouse
The death benefit is generally the greater of annuity value or the applicable guaranteed minimum value. Withdrawals reduce what remains. If your spouse is the beneficiary, ask whether spousal continuation is available and what the contract requires.
Our Final Verdict on Reliance Standard Keystone Index
We would choose Keystone 5 over Keystone 10 as our starting point. The traditional S&P 500, first-year access, and lack of an MVA are strengths. The changing cap is the problem. A ten-year surrender period without a ten-year cap lock is hard to justify unless the overall offer is compelling.
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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