Our Sagicor Sage Accumulator Annuity Review
The Sagicor Sage Accumulator is a fixed indexed annuity built primarily for accumulation. It is available with 5-, 7-, and 10-year surrender periods and gives you the ability to earn interest based on the performance of the S&P 500 and several other crediting strategies without directly investing in the stock market.
There are a lot of accumulation-focused fixed indexed annuities on the market. Most of them have the same problem: the insurance company gives you an attractive cap when you buy the contract but can change that cap at future renewals.
That is the main reason we like the Sagicor Sage Accumulator. It offers a guaranteed cap-lock strategy that gives you substantially more certainty about your future accumulation potential.
The 5- and 7-year versions can lock the guaranteed S&P 500 cap for the entire surrender period. The 10-year version locks the cap for the first five years. At the end of year five, Sagicor offers a new guaranteed cap for years six through ten, and you can either accept the new cap lock or move to the regular annual point-to-point strategy.
That is a meaningful difference from an FIA where the insurance company can simply reset your cap every year.
| Product Type | Fixed Indexed Annuity |
| Primary Purpose | Accumulation |
| Available Terms | 5, 7 and 10 Years |
| Premium Type | Single Premium |
| Free Withdrawals | 10% beginning after the first contract year |
| Flexible Premium | No |
| Market Value Adjustment | Yes |
| Return of Premium | No |
| Financial Strength | Sagicor is rated A (Excellent) by AM Best |
Our Professional Opinion
We really like the Sagicor Sage Accumulator for accumulation.
It is not trying to be a Swiss Army knife. There is no complicated lifetime income rider that you have to pay attention to, and we would not buy this annuity because of nursing home benefits, annuitization options, or any of the other side features.
We like it because it does one important job very well: protected accumulation with a cap you can lock.
One of our biggest complaints about fixed indexed annuities is renewal-rate risk. An insurance company can advertise a great S&P 500 cap when you buy the contract, then reduce it later while you are still sitting inside a surrender-charge period.
That stinks. You made a long-term commitment to the insurance company, but the insurance company did not necessarily make the same commitment to your upside potential.
The Sage Accumulator addresses that problem better than most FIAs. With the 5- and 7-year versions, the guaranteed cap can be locked for the full surrender period. That means you know what your maximum annual S&P 500 crediting opportunity is for the entire term when you purchase the contract.
We especially like the 5- and 7-year versions because the cap-lock period matches the surrender period. The 10-year version is still good, but it is not quite as clean. Your first cap is locked for five years, and then you have to decide whether to accept Sagicor’s new guaranteed cap for years six through ten or switch to the regular point-to-point option.
For somebody who wants principal protection, index-linked growth potential, and more certainty about future renewal terms, the Sage Accumulator is one of our favorite accumulation FIAs.
What We Like
- Guaranteed Cap Lock: This is the biggest reason we like Sage Accumulator.
- Full-Term Lock on the 5- and 7-Year Versions: Your guaranteed cap can match the entire surrender period.
- True S&P 500 Strategy: We prefer a straightforward S&P 500 annual point-to-point strategy over relying entirely on complicated engineered indexes.
- A-Rated Insurance Company: Sagicor meets our preference for using A- or better-rated insurers.
- Multiple Contract Lengths: You can choose 5, 7, or 10 years instead of being forced into one surrender period.
- 10% Liquidity: Annual penalty-free access begins after the first contract year.
- No Annual Contract Fee: There is no separate annual administrative charge for owning the base annuity.
- Principal Protection: Negative index performance does not directly reduce the account value.
What We Don’t Like
- The 10-Year Cap Is Not Locked for All 10 Years Upfront: You know the cap for the first five years, but you do not know today what Sagicor will offer for years six through ten.
- No Return of Premium: There is no contractual return-of-premium feature if you decide to leave early.
- Market Value Adjustment: Taking too much money out during the surrender period can create an additional adjustment.
- No Flexible Premium: This is a single-premium annuity, so it is not designed for somebody who wants to continue making regular deposits.
- State Availability Can Vary: Certain strategies and features may not be approved in every state.
- Not an Income-Rider Product: If your primary goal is maximizing guaranteed lifetime income, this is not the product we would start with.
How the Guaranteed Cap Lock Works
A cap is the maximum amount of interest the annuity can credit during an index-crediting period. For example, if the S&P 500 increases more than your cap during the year, your credited interest is limited to the cap. If the index is negative, the indexed strategy credits 0% rather than passing the market loss through to your annuity.
The important part is not simply having a cap. Almost every traditional fixed indexed annuity with a cap strategy has one.
The important part is knowing how long the insurance company guarantees that cap.
5-Year Sage Accumulator
The 5-year version can lock the guaranteed S&P 500 cap for the entire five-year surrender period. We like this structure because your cap-lock period and surrender period end at the same time.
7-Year Sage Accumulator
The 7-year version works the same basic way. The guaranteed S&P 500 cap can be locked for the full seven-year surrender period.
If somebody wants a longer accumulation period but still wants to know the cap they are getting for the entire commitment, this is a very clean structure.
10-Year Sage Accumulator
The 10-year version is different. The guaranteed cap is locked for years one through five. At the end of year five, Sagicor declares a new guaranteed cap that you can lock for years six through ten.
If you do not like the new cap-lock offer, you can move to the regular annual point-to-point strategy instead.
We still like the 10-year product, but the 5- and 7-year versions provide more certainty because you know the guaranteed cap structure for the entire surrender term when you purchase the annuity.
Why Cap Locks Matter
Renewal rates are one of the most overlooked parts of buying a fixed indexed annuity.
People naturally focus on the rate being offered today. That makes sense, but an FIA is a multi-year contract. The rate you receive in year one is only part of the story if the insurance company has the right to substantially reduce your cap in years two, three, four, and beyond.
A cap lock reduces that uncertainty.
It does not guarantee that the S&P 500 will increase. You can still earn 0% during a negative index year. What it does guarantee is the ceiling used to calculate your interest if the index performs well enough to generate a credit.
For buyers looking for safer accumulation, we consider that a very valuable feature.
Sagicor Sage Accumulator vs. Oceanview CapLock
The Oceanview CapLock is the other accumulation FIA we particularly like when someone wants a guaranteed cap for multiple years.
We would not automatically say one is always better than the other. The better choice depends on the surrender term you want, the available index strategies, the guaranteed cap being offered when you purchase the contract, liquidity, and product availability in your state.
The important point is that both products solve the same problem we dislike with many FIAs: you are not completely dependent on the insurance company resetting your primary cap every year.
Other Crediting Strategies
Sage Accumulator also offers several other ways to earn interest. These include participation-rate strategies linked to the S&P 500 and several iShares ETFs, along with a fixed declared-rate strategy.
- S&P 500 Cap Strategy: Uses a one-year point-to-point calculation with a maximum cap.
- S&P 500 Participation Strategy: Credits a percentage of the index’s positive one-year change.
- iShares MSCI EAFE ETF: Provides an interest-crediting strategy linked to developed markets outside the United States and Canada.
- iShares MSCI Emerging Markets ETF: Provides an interest-crediting strategy linked to emerging-market equities.
- iShares ESG Aware MSCI USA ETF: Provides an interest-crediting strategy tied to U.S. companies meeting certain ESG characteristics.
- Declared Rate Strategy: Credits a fixed rate declared by Sagicor.
Those additional choices are fine, but they are not the reason we would buy this product. The guaranteed S&P 500 cap-lock strategy is the feature that makes Sage Accumulator stand out.
Surrender Charges
The Sage Accumulator is available with three surrender-charge periods. Choosing the right term matters because you should not lock money into an annuity longer than necessary just because one version happens to have an attractive rate today.
| Contract Year | 5-Year | 7-Year | 10-Year |
|---|---|---|---|
| 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% |
These surrender charges apply when withdrawals exceed the amount allowed under the contract during the surrender period.
Liquidity
Sage Accumulator provides 10% annual penalty-free withdrawals beginning after the first contract year. That is fairly standard for this type of annuity and should be enough for someone who is truly using the contract for long-term accumulation.
Applicable required minimum distributions can also be taken under the contract provisions.
The contract also includes surrender-charge waivers for qualifying terminal illness and nursing-home or confined-care situations. These are useful penalty-free crisis waivers, but they are not long-term care insurance.
Market Value Adjustment
Sage Accumulator includes a Market Value Adjustment during the surrender period.
If you take more than the penalty-free withdrawal amount or surrender the contract early, the MVA can increase or decrease the amount you receive depending on changes in interest rates.
That is another reason you should treat this as long-term money. If you think there is a good chance you will need most of the account back in two or three years, this is probably the wrong product.
Is Sage Accumulator Good for Lifetime Income?
Not in the way we normally use income annuities.
Sage Accumulator offers annuitization options, including lifetime payments, but it is fundamentally an accumulation annuity rather than a product built around a guaranteed lifetime withdrawal benefit.
If somebody tells us their primary goal is generating the most guaranteed lifetime income possible, we would compare dedicated GLWB annuities from A- or better-rated insurance companies instead.
The best income product changes as insurance companies adjust their payout rates. That is why we compare actual guaranteed income instead of buying based on a bonus, roll-up percentage, or brand name.
Who Should Consider the Sagicor Sage Accumulator?
- People Who Want Protected Accumulation: You want growth potential without directly exposing your annuity value to stock-market losses.
- People Concerned About Renewal Rates: You do not want to buy an attractive cap today only to have the insurance company cut it next year.
- People Who Prefer the S&P 500: You want a straightforward index strategy rather than depending entirely on proprietary indexes.
- People With a Defined Time Horizon: You can match a 5-, 7-, or 10-year surrender period to when you expect to need the money.
- People Who Want an A-Rated Carrier: Sagicor meets our minimum financial-strength preference for accumulation annuities.
Who Should Probably Buy Something Else?
If you need the highest guaranteed interest rate with no concern about index performance, a MYGA may make more sense. With a MYGA, we generally shop for the highest guaranteed rate from an A- or better-rated company that also provides the liquidity and death-benefit provisions you need.
If your primary objective is lifetime income, we would use a product specifically designed to maximize guaranteed income rather than trying to turn an accumulation annuity into an income annuity.
If you expect to need substantial access to the money before the surrender period ends, Sage Accumulator may also be a poor fit. The 10% annual free withdrawal feature does not make the entire account liquid.
5-Year vs. 7-Year vs. 10-Year Sage Accumulator
We particularly like the 5- and 7-year versions. The reason is simple: the guaranteed cap-lock period can match the entire surrender period.
That gives you a defined commitment on both sides. You agree to leave the money in the contract for a certain period, and Sagicor agrees to maintain the guaranteed cap for that same period.
The 10-year version can still make sense, especially if its terms are materially better when you purchase it. But you are making a 10-year surrender commitment while only knowing the initial guaranteed cap for the first five years.
That does not make the 10-year product bad. It simply means we would want enough additional value from the 10-year option to justify the longer commitment.
What Happens When the Term Ends?
Once the applicable surrender-charge period has ended, you are no longer subject to the original surrender-charge schedule. At that point, you can evaluate whether it makes sense to keep the contract, transfer the money to another annuity, or use the money for another purpose.
This is another reason we think the term matters. Do not automatically choose the longest annuity because its initial rate looks attractive. Match the surrender period to when you realistically expect to want your options back.
What We Recommend
For protected accumulation, the Sagicor Sage Accumulator is one of the products we like.
The cap lock is the reason. Plenty of FIAs can offer a competitive rate in year one. We care about what happens after year one, too.
The 5- and 7-year versions are particularly attractive because the guaranteed cap can be locked for the same period that your money is subject to surrender charges. The 10-year version is still worth considering, but we would compare the value of the longer term carefully because the second five-year cap is not known when you initially purchase the contract.
We would not buy Sage Accumulator because it has the most features. We would buy it because it does the job we want an accumulation annuity to do: protect the money, give us meaningful upside potential, and provide more certainty about future caps.
Compare the Sagicor Sage Accumulator Before You Buy
Cap rates and competing annuity terms change. Before purchasing the Sage Accumulator, we can compare it against other A- or better-rated accumulation annuities to determine which product currently offers the best combination of cap lock, surrender period, liquidity, financial strength, and growth potential.
Contact The Annuity Expert for a free side-by-side comparison. There is no cost and no obligation to purchase anything.
If you already own another fixed indexed annuity and are considering exchanging it for the Sage Accumulator, request a free annuity second opinion before making the move.
Book A Free Consultation
Contact The Annuity Expert for free quotes and a side-by-side comparison of the Sagicor Sage Accumulator against other accumulation annuities available today.