Our SILAC Denali Annuity Review (Overall)
We would not recommend the SILAC Denali or Denali Bonus annuity. The products offer some interesting features, but the insurance company behind the guarantee does not meet our financial-strength standard. That matters more to us than a bonus or an attractive illustration.
Denali and Denali Bonus are fixed indexed annuities designed primarily for accumulating retirement savings. Both offer a fixed interest option and index-linked choices. Denali Bonus adds a premium bonus to the account value. The series has five-, seven-, ten-, and fourteen-year withdrawal charge periods.
The parts that deserve a closer look are access to your money and how much of your interest you keep if you leave early. An excess withdrawal can trigger surrender charges, a market value adjustment, and recovery of interest or bonus amounts. That combination can make getting out more expensive than you expected.
SILAC Denali Annuity Alternatives
Compare Denali with accumulation annuities from insurers rated A− or higher by AM Best. Look at the actual interest-crediting terms, bonus rules, and access to your money. Complete the form below or call us at (770) 755-1565 for a free comparison.
Our Professional Opinion on the SILAC Denali Annuity
SILAC is not an annuity company we recommend. Its AM Best financial strength rating is B (Fair), below our A− minimum. That does not mean SILAC will fail or cannot pay claims. It means we do not think the rating is strong enough for us to recommend tying retirement savings to the company.
Denali Bonus puts a bonus into your account value upfront, and the health-related withdrawal benefits and RMD provision offer useful access. We also like that the death benefit generally pays the full account value before annuitization. But those features do not change our opinion of the insurer.
The interest recovery provision stinks. If you exceed the free withdrawal allowance during the surrender period, SILAC may recover some credited interest as well as apply other adjustments. A nice-looking account value and the amount you can actually walk away with are not necessarily the same. We would rather compare an accumulation annuity from an A− or better insurer and understand its exit rules before getting excited about a bonus.
What We Like
- Upfront bonus option: Denali Bonus adds a premium bonus to account value, which can participate in future interest credits.
- Protection from negative index credits: Indexed strategies have a 0% floor for the crediting period. The index declining does not directly subtract that market loss.
- RMD access: Qualifying required minimum distributions can be treated as free withdrawals, including in the first year.
- Health-related benefits: Qualifying nursing home, terminal illness, and home health provisions can provide additional access.
- Death benefit: Before annuitization, beneficiaries can generally receive the full account value, and an eligible spouse can continue the policy.
What We Don’t Like
- We do not recommend the insurance company: SILAC’s B (Fair) AM Best rating falls below our standard.
- Interest recovery: An early withdrawal above the free allowance can cause SILAC to recover some credited interest.
- Other exit costs: A surrender charge, market value adjustment, and applicable bonus recovery can also affect the amount you receive.
- Limited standard access: The regular annual free withdrawal is 5% after the first policy year, rather than the 10% offered by many competing annuities.
- Long commitments: The longer versions can restrict access for ten or fourteen years.
- Rider tradeoffs: Enhanced access through an optional rider reduces interest credits through an annual spread.
SILAC Denali and Denali Bonus Features
- Product type: Fixed indexed annuity designed for accumulation.
- Withdrawal charge periods: Five, seven, ten, or fourteen years. Availability and terms vary by state.
- Interest choices: A fixed interest strategy and multiple index-linked strategies.
- Premium bonus: Included with Denali Bonus. Standard Denali can provide a bonus if the optional Elevation Plus rider is selected.
- Standard free withdrawals: Up to 5% of account value after the first policy year, subject to the policy’s rules.
- Optional riders: Elevation and Elevation Plus offer enhanced withdrawal provisions in exchange for an annual spread.
- Beneficiaries: Full account value is generally payable before annuitization.
How Denali Earns Interest
You can allocate money to a fixed interest strategy or available indexed strategies. The fixed rate is declared annually, subject to the policy’s minimum guarantee. Indexed interest depends on the performance of the selected index and the strategy’s rules; your money is not directly invested in that index.
A cap, participation rate, or spread can limit the interest you receive, and terms can change for future crediting periods. The 0% floor means a falling index does not produce a negative index credit, but you can still receive no interest. Early-withdrawal adjustments can reduce what you receive, and guarantees depend on SILAC’s ability to pay.
For accumulation, we prefer comparing products that lock in competitive caps or participation rates for several years and offer familiar indexes. A high illustrated return is not a promise. Ask how long each cap or participation rate is guaranteed and what happens when it resets.
Denali Bonus: Is the Upfront Bonus Worth It?
Denali Bonus immediately adds a premium bonus to account value. That gives you more money to earn interest from the beginning. It also can be valuable for beneficiaries because the full account value is generally payable on death before annuitization. The bonus amount depends on the version and the offer.
But the number on the statement is not necessarily the amount you can withdraw without restrictions. If you take more than the free amount during the withdrawal charge period, SILAC can recover a portion of the bonus and interest under the policy’s schedule. An upfront bonus is worth comparing, but it is not worth ignoring the insurer’s rating or a long surrender period. Learn more about how annuity bonuses work before choosing one.
Withdrawals, Surrender Charges, and Interest Recovery
After the first policy year, the standard version permits an annual free withdrawal of up to 5% of the account value, based on the applicable anniversary value. Free withdrawals are not subject to the insurer’s withdrawal charge, market value adjustment, or applicable recovery. Withdrawals above the allowance during the charge period can trigger all three.
The surrender charge is only one part of the potential cost. The market value adjustment can increase or decrease the amount you receive. The interest or bonus recovery provision can take back a percentage of applicable credited amounts. Ask for the actual cash surrender value for each year before you buy. Do not assume that a 0% index floor means you can walk away with your full account value early.
The five-, seven-, ten-, and fourteen-year terms give you choices, but fourteen years is a long time to wait for unrestricted access. If there is a good chance you will need more money sooner, we would not choose the longest term just to get a larger bonus.
Elevation and Elevation Plus Riders
Optional Elevation increases the annual free withdrawal percentage to 10% and allows fully unused free withdrawals to carry forward, up to a 30% maximum cumulative free withdrawal percentage, under its rules. Elevation Plus adds those access features and an additional premium bonus.
Neither rider is free. Elevation has a 0.50% annual spread and Elevation Plus has a 1.00% annual spread based on account value during the withdrawal charge period. The spread is limited to the interest credited for the policy year. In plain English, these riders can take away part or all of the interest you otherwise would have earned, although the spread does not exceed that year’s interest credit. Compare the additional access and any bonus against the reduced growth.
Required Minimum Distributions and Health Waivers
Qualifying required minimum distributions can be taken from the first policy year as free withdrawals, even if the RMD exceeds the standard 5% allowance. Ask how SILAC determines the eligible amount, especially if you hold multiple retirement accounts.
Qualifying nursing home, terminal illness, and home health benefits may allow additional withdrawals without the normal withdrawal charge, MVA, or recovery. Waiting periods, eligibility requirements, and state variations apply. These benefits help you access your own annuity money; they are not the same as a separate long-term care insurance policy that can provide additional coverage.
What Happens When You Die?
Before annuity payments begin, Denali generally pays the full account value to your beneficiaries. For Denali Bonus, that generally includes the bonus already reflected in the account value. An eligible spouse who is an owner or beneficiary can elect spousal continuation under the policy’s rules.
That death benefit is a meaningful feature if leaving money to family is important. Still, compare it against annuities from stronger insurers. Ask how any withdrawals and income elections affect the amount your beneficiaries receive.
Can Denali Provide Lifetime Income?
Denali offers annuity income payment options. Choosing one can involve annuitization, which converts the contract to a payment stream and can limit access to the account. It is not the same as taking withdrawals under a guaranteed lifetime withdrawal benefit (GLWB).
If a paycheck you cannot outlive is your primary goal, compare actual guaranteed payments from annuities with an income rider as well as immediate income options. Compare the same deposit, start date, and single or joint coverage. We would begin with insurers rated A− or higher.
How Denali Compares With Other Annuities
- Other fixed indexed annuities: Compare the insurer, rate-lock periods, access provisions, and whether interest is recovered if you leave early. We prefer a stronger insurer.
- MYGAs: A MYGA locks in a fixed rate for a set period. Compare current fixed annuity rates if you prefer a known rate over index-linked crediting.
- RILAs: A registered index-linked annuity can expose you to market losses while limiting upside. We generally think that is a lousy trade when you are trying to protect retirement savings.
- Variable annuities: Market-based investment options can lose value and carry ongoing fees. Denali avoids direct index losses, but it still has surrender restrictions and insurer risk.
Who Should Look Elsewhere?
We would look elsewhere if you want an annuity from a company that meets our financial-strength standard. That includes someone attracted to Denali’s bonus or index strategies. We would also avoid a long surrender period if you may need more than the free withdrawal allowance.
If you already own Denali, do not rush to surrender it simply because we would not recommend buying it today. First, compare the cash surrender value, all charges and adjustments, remaining term, and alternatives. An expensive exit can make an immediate change a bad decision.
Our Final Verdict
We would pass on the SILAC Denali series. An upfront bonus, health waivers, and the full account value death benefit are worth understanding, but SILAC’s B rating falls below our standard. Interest recovery and a potentially lengthy surrender period make the contract even less appealing to us.
Contact The Annuity Expert for a free comparison and quotes. We can help you compare growth potential, access to your money, and death benefits from insurers that meet our financial-strength standard. Call (770) 755-1565 or complete the form below.
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