Our Professional Opinion on the Security Benefit RateTrack Annuity
We would not choose RateTrack if you need to know exactly what your money will earn for the next five or seven years. Its total interest rate can fall as well as rise. The fixed part and a cap on the floating part are locked, but the full rate is not. A traditional MYGA is a better starting point when certainty matters more than the possibility of a higher rate later.
RateTrack has a useful purpose: it can automatically benefit from rising short-term rates without moving your money to another annuity. But the floating rate resets only once a year and is capped. A rate increase after your anniversary will not immediately raise your annuity’s rate, and increases above the cap will not help.
Security Benefit Life Insurance Company is a good insurer in our opinion. Its AM Best financial strength rating is A− (Excellent), which meets our minimum for recommending an insurer.
Compare RateTrack with fixed annuity rates for the same deposit and commitment. Ask what a traditional MYGA guarantees for the entire term, then compare RateTrack’s starting rate, guaranteed minimum, fixed base and floating-rate cap. We would not assume rates will rise enough to make RateTrack the winner.
What We Like
- Potential to benefit if rates rise: The floating component can increase at an annual reset without replacing the contract.
- Some protection when rates fall: The total credited rate cannot be less than the contract’s guaranteed minimum interest rate.
- First-year access: Up to 10% of your original deposit is available without a surrender charge in the first year.
- No automatic new five- or seven-year commitment: At the end of the initial term, the contract moves to a one-year declared-rate account if you take no action.
- Two commitment lengths: You can select five or seven years to fit your timeline.
What We Don’t Like
- The full interest rate is not guaranteed for the term: Your rate can decrease when the floating component resets.
- The increase is capped: If the reference rate rises above the cap, you do not benefit from the excess.
- It adjusts annually, not every three months: A higher reference rate between anniversaries does not immediately change your crediting rate.
- Long waits for health waivers: In many states you must wait until after the third contract year.
- Early exit can cost you: Surrender charges can reduce withdrawals above the free allowance.
RateTrack Annuity Overview
RateTrack is a single-deposit deferred fixed annuity designed for accumulation. You choose a five- or seven-year initial guarantee period. Its credited rate combines a fixed base and a floating component tied to a published short-term interest-rate benchmark.
Key Features
- Issuer: Security Benefit Life Insurance Company, rated A− by AM Best.
- Minimum deposit: $10,000; amounts over $1 million require prior approval.
- Issue age: Generally up to age 90, subject to state rules.
- Guarantee periods: Five or seven years for the fixed base and floating-rate cap; the total credited rate can change annually.
- Free withdrawals: Up to 10% of the original deposit in year one and 10% of the prior-anniversary account value thereafter, subject to contract rules.
- After the initial term: A one-year rate is declared if you take no action.
- Health waivers: Nursing home and terminal illness waivers are subject to waiting periods and state restrictions.
- Death benefit: Generally 100% of account value, less any applicable premium tax.
- Availability: RateTrack is not available for sale in New York.
How RateTrack’s Interest Rate Works
During your selected term, Security Benefit adds a fixed base rate to a floating rate based on the three-month CME Term SOFR reference rate. The base rate and the cap on the floating component are set when you buy and remain in place for the guarantee period. The floating component is measured again on each contract anniversary, using the applicable reference rate from the prior business day.
The three-month name describes the benchmark. It does not mean your annuity rate resets every three months. Your total credited rate is set for each contract year. If the benchmark rises or falls between anniversaries, that change is not reflected until the next reset.
For example, suppose the fixed base were 2%, the floating component were 4%, and the cap on that component were 3%. The credited rate would be 5%: the 2% base plus the capped 3% floating component. If the reference rate later fell to 1% at a reset, the resulting rate would generally be 3%, subject to the contract’s minimum. These are hypothetical numbers, not current rates.
The contract’s guaranteed minimum applies to the total credited rate. Do not assume the fixed base is always the lowest possible total: if the floating benchmark were negative, the combined rate could fall below the base, although the total cannot fall below the guaranteed minimum. Ask for that minimum before buying.
RateTrack vs. a Traditional MYGA
A traditional MYGA locks an actual interest rate for its selected term. RateTrack locks the base and cap but lets the floating component change each year. RateTrack could earn more if the benchmark rises enough; a MYGA could come out ahead if the benchmark falls or remains too low. Neither outcome is guaranteed.
We prefer the MYGA when a competitive guaranteed rate already meets your goal. If you are concerned about committing everything before rates rise, consider splitting your savings between RateTrack and a competitive fixed-rate annuity. Compare the guaranteed results, your available access, and insurers before deciding.
Withdrawals and Liquidity
In the first contract year, you may withdraw up to 10% of your initial deposit without a surrender charge. In subsequent years, the allowance is up to 10% of the account value on the prior anniversary. For a $100,000 deposit, the first-year allowance is $10,000. Free withdrawals can be requested as a lump sum or systematic payments, subject to policy rules.
The free-withdrawal allowance is useful, but it does not make the whole contract liquid. If you take more, surrender charges can apply. Confirm how an adjustment, if applicable, and the full-surrender rules affect the amount you receive.
If you plan to live on the interest: Compare RateTrack with a guaranteed lifetime withdrawal benefit using the same deposit, ages, income start date and covered lives. A floating interest withdrawal is not a guaranteed paycheck for life.
If you want withdrawals without lifetime income: Compare a bonus annuity that credits a real upfront bonus to the account. A larger starting balance might support the same withdrawals and leave more to compound even at a lower rate. Compare the same withdrawal dates and amounts, fees, surrender values and bonus recapture.
If you are in poor health or expect a shorter retirement: Compare a bonus that fully vests and is payable on a qualifying death. Look at what beneficiaries would actually receive after withdrawals and restrictions. RateTrack pays its applicable death benefit, but future unearned interest is not paid in advance.
Surrender Charges and Early Exit
Taking more than the available allowance during the initial term can trigger a surrender charge. The standard schedule is:
| Contract year | 5-year option | 7-year option |
|---|---|---|
| 1 | 9% | 9% |
| 2 | 8% | 8% |
| 3 | 7% | 7% |
| 4 | 6% | 6% |
| 5 | 5% | 5% |
| 6 | 0% | 4% |
| 7 | 0% | 3% |
| 8 and later | 0% | 0% |
Contract and state variations matter. Ask for the actual cash surrender value before moving your money. Confirm whether your policy applies a market value adjustment to an early withdrawal; the answer affects the amount you receive.
Nursing Home and Terminal Illness Waivers
Qualifying health waivers may allow additional withdrawals without surrender charges. Generally, you must wait until after the third contract year. That is a long wait if you need care soon.
The nursing waiver generally requires qualifying confinement beginning after purchase and lasting longer than 90 days. The terminal illness waiver generally requires a qualifying diagnosis after purchase and an expected life expectancy of one year or less. Conditions and documentation apply.
The waivers are available earlier in some states: after the first contract year in Pennsylvania and Texas, and beginning in the first year in Connecticut. The nursing waiver is not available in California or Massachusetts; the terminal illness waiver is not available in California or New Jersey. If an MVA applies, it is not waived under these provisions in Connecticut, Pennsylvania or Texas. Confirm your policy’s terms. These waivers give you access to your own money; they are not long-term care insurance.
What Happens After Five or Seven Years?
If you take no action at the end of the initial guarantee period, the money automatically moves to a one-year term at an interest rate declared by Security Benefit. The rate is subject to the contract’s guaranteed minimum. The original floating-rate formula does not automatically continue indefinitely.
You can evaluate other available choices, including taking money out. Compare the new declared rate against other annuities and confirm any new guarantee period, surrender schedule and withdrawal rules before selecting another term. We like not being automatically placed into another five- or seven-year period.
Death Benefit and Your Spouse
The death benefit is generally the account value, less any applicable premium tax. Withdrawals reduce the money left to beneficiaries. If there is a joint owner, the owners must generally be named as the sole primary beneficiaries under the contract’s rules.
If your spouse is the beneficiary, ask whether spousal continuation is available and what conditions apply. Do not assume the contract can be continued without confirming the policy and beneficiary designation.
Our Final Verdict on RateTrack
RateTrack is a specialized alternative, not our first choice for someone who wants a locked rate. We like the opportunity to benefit from rising short-term rates, but the annual reset, cap and long health-waiver waiting period are real drawbacks. The minimum rate matters just as much as the rate you start with.
We would compare a traditional MYGA first for a known result. RateTrack deserves consideration for a portion of your savings if you value the chance of higher interest and are comfortable with the rate falling to the contractual minimum. Choose the five- or seven-year commitment around when you may need the money.
Contact The Annuity Expert for free annuity quotes. We can compare RateTrack with fixed-rate and lifetime-income alternatives for your deposit and retirement plans.
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