Our SILAC Teton Annuity Review (Overall)
We would not recommend the SILAC Teton or Teton Bonus annuity. These fixed indexed annuities have some useful features, including a choice of withdrawal periods and a bonus version that adds money to your account upfront. But the insurance company matters more to us than a flashy bonus, and SILAC does not meet our financial strength standards.
Teton and Teton Bonus are designed for growing retirement savings. You can choose a fixed-interest strategy or index-linked strategies that credit interest according to their own rules. An index loss does not directly reduce your account, but early withdrawal charges, a market value adjustment, and bonus recovery can reduce what you receive.
- Insurance company: SILAC Insurance Company.
- Product type: Fixed indexed annuity for accumulation.
- Versions: Teton and Teton Bonus, with five-, seven-, ten-, and fourteen-year withdrawal charge periods.
- Bonus: Teton Bonus adds a premium bonus to the account. An optional rider can provide an additional bonus.
- Free withdrawals: Generally up to 5% of account value each year after the first policy year; optional riders can increase access.
- Death benefit: Full account value is generally available to beneficiaries before annuitization, subject to contract terms.
SILAC Teton Annuity Alternatives
Before locking your money into Teton, compare fixed indexed annuities from insurance companies with stronger financial ratings. The Annuity Expert can help you compare growth potential, bonuses, and access to your savings. Call (770) 755-1565 or use the tool below for a free comparison.
Our Professional Opinion on the SILAC Teton Annuity
SILAC is a below-standard annuity company in our opinion. AM Best rates its financial strength B (Fair), below our A− minimum. That matters because the company, not the index, is responsible for the annuity’s guarantees. We would not put retirement savings with SILAC when stronger insurers offer alternatives.
Teton Bonus has a feature we like: its premium bonus is added to the account upfront, so it can be part of the balance that earns interest. Its enhanced withdrawal options can be useful too. But we would not ignore a B rating to get a bonus or extra liquidity. A bonus is no bargain if the insurance company behind the promise does not meet our standards.
We also do not like the standard 5% withdrawal allowance after the first year. Many competing accumulation annuities offer more access without requiring a separate rider. Paying an annual spread to improve your access takes away some of your credited interest. That stinks if liquidity was one of the main reasons you bought the annuity.
What We Like
- Upfront bonus option: Teton Bonus adds a premium bonus to the account rather than an income-only calculation.
- Multiple time commitments: Five-, seven-, ten-, and fourteen-year versions give buyers a choice of withdrawal charge periods.
- RMD access: Required minimum distributions can qualify for charge-free treatment even when they exceed the standard allowance.
- Health-related access: Qualifying nursing home, terminal illness, and home health benefits may provide access under their terms.
- Death benefit: Beneficiaries generally receive the account value before annuitization.
What We Don’t Like
- SILAC’s financial strength rating: B (Fair) is below the minimum we want from an annuity company.
- Limited standard access: The regular free withdrawal allowance is generally 5% beginning in year two.
- Long commitments: A ten- or fourteen-year withdrawal charge period is a long time to wait for full access.
- Extra cost for enhanced liquidity: The optional riders apply an annual spread during the withdrawal charge period.
- Bonus recovery and MVA: A large early withdrawal can trigger several adjustments, depending on the version and rider.
How the Teton Annuity Earns Interest
Teton offers a fixed-interest strategy and several indexed crediting strategies. With an indexed strategy, your money is not invested directly in the index. SILAC uses the index’s performance and the strategy’s rules to calculate any interest credited. A cap, participation rate, or spread can limit that interest.
The indexed strategies have a 0% interest-crediting floor, so a falling index does not directly subtract that loss from your annuity. That floor does not eliminate early-withdrawal charges or other applicable adjustments. Interest already credited is locked in against subsequent index declines, subject to the policy’s terms.
Caps and other crediting terms can change at the end of a strategy term. We prefer to compare accumulation annuities with competitive terms locked for multiple years, especially when the annuity asks you to accept a long withdrawal charge period. A great-looking rate today is less appealing if it can be reduced later.
Teton Bonus and Optional Elevation Riders
Teton Bonus adds a premium bonus to the account. That means the bonus is included in the money used to calculate account value, rather than being a number available only to calculate an income benefit. Compare the actual account values and crediting terms with a no-bonus annuity; a bonus by itself does not prove the contract will grow more.
Elevation and Elevation Plus are optional riders for Teton and Teton Bonus. Both increase the annual free-withdrawal percentage to 10% and allow fully unused withdrawals to accumulate, subject to a 30% maximum. Elevation Plus also adds a premium bonus. Eligibility, timing, and state variations matter.
The tradeoff is an annual spread during the withdrawal charge period. It is based on account value and cannot exceed the interest credit for the policy year. In other words, the rider can reduce the interest you would otherwise receive. Ask for the current rider terms and compare the benefit with what another insurer provides without the additional spread.
The bonus can be subject to a bonus recovery on a withdrawal that triggers a withdrawal charge. Do not confuse a bonus shown in the account with an amount you can always take out immediately without a cost.
Withdrawals, Surrender Charges, and the MVA
After the first policy year, the standard allowance is generally up to 5% of account value as measured on the most recent policy anniversary. A withdrawal within the applicable free amount is not subject to the contract’s withdrawal charge or market value adjustment. Rider and state rules can differ.
Withdraw more than the free amount during the withdrawal charge period, and a surrender charge can apply. A market value adjustment may also increase or decrease what you receive. Bonus recovery can apply to certain excess withdrawals under Teton Bonus or Elevation Plus. Ask for the actual surrender value before making a large withdrawal.
We would not put money you expect to need in the next few years into a long-term annuity. An emergency fund belongs somewhere you can access it without asking the insurance company what it will cost to get it back.
Required Minimum Distributions and Health Waivers
For a qualified annuity, eligible required minimum distributions can begin immediately and are treated as free withdrawals even if they exceed the regular 5% allowance. Confirm how the amount is calculated under your certificate before relying on the provision.
Qualifying nursing home, terminal illness, and home health benefits can also allow withdrawals without the usual charges. They have waiting periods and specific eligibility rules; availability varies by state. These provisions provide access to your own annuity money. They should not be mistaken for separate long-term care insurance that pays an additional pool of care benefits.
What Happens When You Die?
Before annuitization, the full account value is generally payable to your named beneficiaries. On the bonus version, the account value includes the premium bonus. Confirm the applicable death-benefit provisions and beneficiary designation in your policy.
An eligible surviving spouse may choose spousal continuation, allowing the policy to continue instead of immediately paying the death benefit. Ownership and beneficiary arrangements affect the available choices, so make sure they match your wishes.
How Teton Compares With Other Annuities
- Other fixed indexed annuities: We would compare a no-fee accumulation annuity from an A− or higher insurer, including its crediting terms, available indexes, bonus, and access.
- MYGAs: A multi-year guaranteed annuity locks an interest rate for a defined period. Compare current fixed annuity rates if you prefer knowing the rate instead of relying on index-linked interest.
- RILAs: A registered index-linked annuity can expose you to market losses beyond its stated protection while limiting upside. We think that is a lousy trade for money you want protected.
- Variable annuities: Investment subaccounts offer market exposure but can lose value and carry ongoing expenses. Teton’s index floor avoids direct index losses, although SILAC’s rating is still a dealbreaker for us.
If your priority is guaranteed income you cannot outlive, compare an annuity with a guaranteed lifetime withdrawal benefit. Teton is primarily designed for accumulation. Compare the actual guaranteed income, fees, and access from stronger insurers instead of assuming a bonus will produce the best paycheck.
Who Should Consider an Alternative?
If you want an upfront bonus and protected index-linked growth, we would look for those features from an insurance company rated A− or better. If you want predictable growth, compare a MYGA. If you need a lifetime paycheck, compare actual guaranteed income from annuities designed for that job.
Already Own a SILAC Teton Annuity?
Do not rush to surrender your annuity just because you read about SILAC’s rating. A withdrawal charge, market value adjustment, or bonus recovery could make an immediate exit expensive. First, review your certificate, request the current surrender value, and compare the cost of leaving now with your options as the withdrawal charge period progresses. We can help you review the contract before you decide.
Our Final Verdict
We would pass on the SILAC Teton and Teton Bonus annuities. The upfront bonus and access features can be attractive, but SILAC’s financial strength rating falls below our standard. We would rather compare annuities issued by stronger companies than accept that tradeoff for a bonus.
Contact The Annuity Expert for a free comparison and quote. We can help you compare accumulation annuities, bonuses, lifetime income, and the companies standing behind them. Call (770) 755-1565 or complete the form below.
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