Top Annuities with Bonuses
When planning for retirement, selecting an annuity with a bonus can significantly enhance your financial future. Here are some of the top annuities offering substantial bonuses:
- AuguStar Omega Bonus Plus
- Bonus: Up to 33%
- Term: 10 years
- Bonus Structure: Vests over 10 years
- Features: The AuguStar Omega Bonus Plus offers up to a 33% premium bonus. The bonus vests over the 10-year surrender-charge period, meaning the full bonus is not immediately available if the contract is surrendered early. This product can be useful for someone looking for a large initial enhancement to their annuity value who intends to hold the contract for the full term.
- North American Charter Plus 14
- Bonus: Up to 31%
- Term: 14 years
- Bonus Structure: Recapture bonus
- Features: The North American Charter Plus 14 offers up to a 31% premium bonus. The bonus is subject to recapture provisions, which means some or all of the bonus may be taken back if the contract is surrendered during the applicable recapture period. Its longer 14-year term makes it better suited for someone who expects to keep the annuity for the long term.
- Athene Performance Elite 15
- Bonus: Up to 28%
- Term: 15 years
- Bonus Structure: Vests over 15 years
- Features: The Athene Performance Elite 15 provides up to a 28% premium bonus that vests over the 15-year term. Because of the extended vesting schedule, this annuity is generally designed for long-term owners rather than someone who may need to surrender or replace the contract early.
- Axonic Trailhead 10 PLUS Enhanced
- Bonus: Up to 26%
- Term: 10 years
- Features: The Axonic Trailhead 10 PLUS Enhanced offers up to a 26% premium bonus with a 10-year term. It provides a shorter commitment than some of the higher-bonus 14- and 15-year contracts while still offering a substantial upfront bonus.
Pro Tip: While these products offer the best annuity bonuses, we always recommend verifying the latest annuity company ratings from agencies like A.M. Best and S&P to ensure your chosen carrier has the long-term financial stability to honor its guarantees.
Other Bonus Annuities We Like
| Product | Term | Rating | Bonus |
|---|---|---|---|
| North American Secure Horizon Plus | 10 Years | A+ | Up to 24% |
| Athene Performance Elite 10 | 10 Years | A+ | Up to 22% |
| Revol One Bonus Rev Max | 10 Years | B++ | Up to 22% |
| American Equity AssetShield Bonus 10 | 10 Years | A | Up to 21% |
| F&G Performance Pro | 10 Years | A- | Up to 21% |
| Talcott EverGuard Aspire | 10 Years | A- | Up to 20% |
| GILICO Guidepath Bonus | 10 Years | A- | Up to 17% |
| American National Smart Start | 5 Years | A | Up to 13% |
| Ibexis FIA Plus 7 | 7 Years | A- | Up to 12.5% |
Key Features of Bonus Annuities
- Initial Bonus Percentage: When you invest in a bonus annuity, you receive an immediate boost to your investment through an initial bonus. This percentage can significantly increase your principal amount, enhancing your overall growth potential.
- Vesting Schedule: The bonus becomes yours fully over time through a vesting schedule. This schedule outlines the period over which the bonus is gradually vested, ensuring you stay committed to your annuity plan to reap the full benefits.
- Surrender Charges: While bonus annuities offer attractive initial benefits, they also come with surrender charges for early withdrawals. It’s crucial to understand these charges to avoid penalties that could diminish your investment returns.
How Premium, Death Benefit, and Income-Base Bonuses Really Work
Bonus annuities can look appealing because they add immediate value to your contract, but each bonus comes with trade-offs. Below, I’ll break down how the different types of annuity bonuses work, who benefits from them, and the fine print you need to understand before you buy.
Premium Bonuses (FIA Bonus Annuities)
How it works: The insurer adds a bonus—credited to your initial premium—when you purchase a fixed indexed annuity (FIA). This boosts your account value on paper from the very start.
- Pros: Increases your starting value; useful if you are rolling over another annuity or want to offset surrender charges from a prior contract.
- Cons: Typically comes with longer surrender schedules, lower caps or participation rates, and vesting schedules that reduce growth potential.
- Who needs it: People looking to recover losses from switching annuities or who plan to use the annuity primarily for income, not growth.
- Who doesn’t: Someone who wants maximum long-term accumulation with high crediting potential.
Death Benefit Bonuses
How it works: The insurer increases the payout your beneficiaries receive, often as a percentage boost to the contract’s death benefit.
- Pros: Leaves a larger legacy without buying additional life insurance.
- Cons: Usually limited to certain annuities, and may require keeping the policy in force for a set period. Often, it doesn’t grow with market performance the way the account value does.
- Who needs it: Individuals with legacy goals but limited health insurability (can’t qualify for life insurance).
- Who doesn’t: Those already covered by adequate life insurance or who want living benefits over legacy protection.
Income Base Bonuses (Benefit Base Enhancements)
How it works: The insurer boosts your “income base” for lifetime withdrawals under a guaranteed lifetime withdrawal benefit (GLWB) rider. This number is not a walk-away value—it only determines future withdrawal amounts.
- Pros: Creates a higher guaranteed income for life, which can be valuable if income is your priority.
- Cons: Misleading if misunderstood—the income base isn’t money you can cash out. Bonuses here may come with rider fees or performance trade-offs.
- Who needs it: Retirees seeking reliable income streams regardless of market performance.
- Who doesn’t: Those focused on liquidity or leaving behind maximum inheritance.
Bonus Vesting Schedules (Alive vs. At Death)
How it works: Bonuses are often subject to vesting. You may lose part of the bonus if you surrender the contract early. However, vesting rules are typically waived at death, meaning your beneficiaries get the full bonus.
- Pros: Protects heirs, ensuring they receive the bonus regardless of vesting.
- Cons: While alive, you might face reduced access to the bonus during the vesting period.
- Who needs it: Buyers who plan to keep the annuity until maturity or for life.
- Who doesn’t: Investors who want flexibility to exit early.
What’s Really Going On with a Bonus?
1. Vesting & Recapture: Bonus Won’t Always Stick
A premium bonus often comes with a vesting or recapture schedule. If you surrender or withdraw beyond penalty-free limits before the bonus fully vests, you forfeit part—or all—of that bonus. This means the advertised “extra money” may never be fully yours if you need access to the account early.
2. Reduced Renewal Terms and Lower Crediting After the First Year
Bonuses usually come with trade-offs in growth potential:
- Renewal terms (caps, participation rates, spreads) tend to reset at lower levels once the initial period ends.
- Index crediting is often weaker than in a comparable non-bonus annuity.
- Over the long run, this can drag down overall performance and reduce your walk-away value.
3. Bonuses Can Fuel Income—but Hurt Walk-Away Value
Bonuses can be useful if you plan to use the annuity strictly for lifetime income. They may inflate your benefit base for income riders and boost your payout. But if you ever need to surrender the contract or compare the cash value against a non-bonus annuity, the long-term numbers often look worse.
4. Liquidity & Waiver Caveats
- Bonus annuities typically have longer surrender periods and higher charges if you withdraw early.
- Some contracts include waivers for nursing home stays or terminal illness, but these only apply under narrow conditions.
- If you think you’ll need flexible access, the bonus structure often works against you.
What You Give Up—Quick Comparison
| Feature | Bonus Annuity | Non-Bonus Annuity |
|---|---|---|
| Upfront boost | Higher, due to an inflated benefit base | No, so full value at surrender |
| Index crediting (caps, rates) | Lower post-bonus; resets may not be favorable | Often steadier, more competitive rates |
| Surrender period | Longer; bonus may extend penalty window | Typically shorter or standard |
| Surrender flexibility | Limited; early withdrawal may recapture the bonus | Generally more accessible |
| Income rider benefit (if elected) | Higher, due to an inflated benefit base | Lower, but more sustainable |
| Walk-away surrender value | Can be lower due to recapture and reduced growth | Usually higher over time with consistent growth |
7 Truths About Annuity Premium Bonuses Insurance Agents Won’t Tell You
Scenario:
You’re shopping for an annuity and hear the pitch: “We’ll give you a 10% bonus on your premium right away.” Sounds great—but is it? Annuity premium bonuses are tempting, but they often come with hidden strings attached. This guide breaks down every type of annuity bonus, how each one works, and whether or not it’s truly worth it.
1. Upfront Premium Bonus: A Quick Boost to Your Contract Value
Key Stat: Common bonus rates range from 5% to 20%, depending on the insurer and product type.
This is the most advertised form: the insurer adds a percentage (e.g., 10%) to your initial deposit. If you put in $100,000, you start with $110,000 in your account value.
✔ Pros
- Immediate increase in account value
- Can offset early withdrawal charges or inflation
- Attractive if you’re close to retirement and plan to annuitize or take income soon
✘ Cons
- Often offset by lower interest rates or higher fees
- Bonuses may vest over time (you may lose them if you surrender early)
- May increase surrender charge period (e.g., 10 years or more)
Who Needs It: Retirees who plan to hold the annuity for its full term and use guaranteed income riders.
Who Doesn’t: Anyone who might need flexibility or early access to their funds.
2. Income Rider Bonus: Enhances Future Payouts, Not Your Cash Value
Key Stat: Bonuses can add 10%–30% to the income base, not the actual cash value.
When paired with a Guaranteed Lifetime Withdrawal Benefit (GLWB), a bonus might be added to the income value only, not your real account value. This means your lifetime payout is higher, but you can’t withdraw the bonus as a lump sum.
✔ Pros
- Creates a higher guaranteed income for life
- Ideal for those deferring income for 5–10 years
- Often paired with 5%–8% compound roll-ups
✘ Cons
- Can be confusing: your “bonus” isn’t accessible as real money
- The income base is not the death benefit or surrender value
- May require annuitization or lifetime income withdrawals
Who Needs It: People planning to use the annuity for lifetime income and are willing to wait before taking withdrawals.
Who Doesn’t: Anyone needing liquidity or planning to pass the annuity on to heirs as a lump sum.
3. Vesting Schedules: When Bonuses Disappear
Some contracts include a vesting schedule, meaning the bonus is yours only after a certain number of years—often 7 to 10.
✔ Pros
- Encourages long-term holding
- You may get the full bonus if held to maturity
✘ Cons
- If you surrender early, the bonus (and gains) could be forfeited
- Creates confusion between real and phantom value
Who Needs It: Buy-and-hold investors who are comfortable committing to the long term.
Who Doesn’t: Those who value flexibility or might need the money for emergencies.
4. Bonus Recapture: A Quiet Take-Back Clause
Even if a bonus is vested, some annuity contracts include a “bonus recapture” clause—especially during the surrender period. If you take out more than the free withdrawal amount, the insurer may reclaim part or all of your bonus.
✔ Pros
- No impact if you follow contract rules
- May allow for better rates on GLWB or death benefits
✘ Cons
- Can surprise retirees who thought their value was locked in
- Adds complexity to withdrawal planning
Who Needs It: Those fully committed to deferring income and staying within contract limits.
Who Doesn’t: People looking to take large withdrawals before full maturity.
5. Enhanced Bonuses on Rollovers and 1035 Exchanges
Insurers may offer extra bonuses if you’re rolling over from a competitor or exchanging an old annuity.
✔ Pros
- Helps compensate for surrender fees from the old contract
- Good way to consolidate accounts
✘ Cons
- Might trigger a new surrender period
- Could mask a downgrade in overall contract value
Who Needs It: Those with underperforming contracts seeking better terms.
Who Doesn’t: Anyone rolling over solely for a bonus without reviewing the full contract terms.
6. The Hidden Cost of Bonuses: Lower Growth Potential
To pay for bonuses, insurers often reduce other features—like participation rates on indexed annuities or cap rates.
✔ Pros
- Still appealing if the priority is guaranteed income
- You know your minimum return
✘ Cons
- May limit upside potential
- Fees on income riders can eat into gains
Who Needs It: Risk-averse investors looking for secure payouts.
Who Doesn’t: Growth-focused retirees who want to maximize investment potential.
7. Alternatives to Bonuses: Higher Rates Without the Bait
Some insurers skip the bonus and offer higher income roll-ups or better participation rates on the index.
✔ Pros
- Transparent and easy to compare
- More value if you plan to defer income longer
✘ Cons
- Less marketing sizzle—requires more education to appreciate
Who Needs It: Retirees who value growth and flexibility over flashy signup incentives.
Who Doesn’t: Those who prioritize upfront benefits over long-term outcomes.
Other Insurance to Consider
- Hybrid Long-Term Care Riders: Protect against care costs if health declines.
- Life Insurance with LTC Riders: Combines legacy protection with care benefits.
- Immediate Income Annuities (SPIAs): Provide income without bonus-related trade-offs.
Bottom Line
Don’t fall for a shiny bonus without understanding the full trade-off. Let our agents at The Annuity Expert help you compare every annuity—including ones with or without bonuses. We’ll break down the pros, cons, and hidden fees so you can choose what’s best for your future.
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Questions From Our Readers
What are bonus annuities?
Bonus annuities are contracts where the insurance company adds an upfront credit (a percentage of your premium) to your account or income base. The bonus helps offset surrender charges from prior annuities or boosts lifetime income values, but usually comes with trade-offs like longer surrender periods and lower growth potential.
What type of annuity adds a bonus?
Certain annuities, such as fixed index or variable annuities, may offer bonus features. These bonuses are typically added to the initial premium or account value to enhance potential returns.
What is a first-year bonus “teaser” rate?
A first-year bonus rate is a variant of the traditional declared-rate interest-crediting approach that insurance companies use to boost their marketing efforts. This type of annuity is generally referred to as a bonus annuity.
In what contract year is the “bonus” in a bonus annuity contract normally credited?
The “bonus” in a bonus annuity contract is typically credited in the first contract year. Bonus annuities offer an additional percentage added to your initial investment, serving as an incentive for choosing the annuity. This upfront bonus is meant to attract new customers. Still, it’s essential to consider the terms, including higher fees or longer surrender charge periods, which could offset the bonus’s initial benefit over the annuity’s life.
I saw an advertisement for high guaranteed returns or large bonuses. Is this too good to be true?
Yes, advertisements promising high guaranteed returns or large bonuses can indeed be too good to be true. Brokers, agents, and financial advisors often use such enticing features to encourage potential clients to share their contact information. At the same time, Multi-Year Guaranteed Annuities (MYGAs) may offer guaranteed returns; any promises of more than a 20% bonus or guaranteed returns north of 6% are often not what they seem. Typically, these are not outright guarantees or bonuses you can take as a lump sum; instead, they are often structured for lifetime income payments. Therefore, it’s important to be cautious and thoroughly understand the terms and conditions of such offers. If something seems overly advantageous, it’s wise to approach it with skepticism and seek professional advice.
Which annuity has the highest bonus?
As of October 2026, North American’s Charter Plus 14 offers a 27% premium bonus.
Are there any bonus annuities with a company that offers a guaranteed fixed interest rate for 10 years?
Yes, most bonus annuities (fixed-indexed annuities) offer a guaranteed fixed interest rate option, but the rate can change annually based on the current interest rate environment.
Does a bonus annuity avoid probate?
Yes. Like all annuities, bonus annuities pass directly to named beneficiaries and bypass probate. This allows heirs to receive benefits faster without going through the court.
How are annuity bonuses taxed?
Bonuses are taxed the same as other annuity earnings. Growth and bonuses are tax-deferred but become taxable as ordinary income when withdrawn. If funded with qualified money (e.g., IRA, 401 (k)), all withdrawals are taxable.
What are the cons of a bonus annuity?
Cons include longer surrender periods, lower caps or participation rates, reduced accumulation potential, and vesting schedules that may limit access to the full bonus while alive.
Do bonus annuities have longer surrender periods?
Yes. Most bonus annuities can carry longer surrender schedules to allow the insurer to recover the bonus cost.
What annuity has a 47% bonus?
The Allianz 222 had a 47% income bonus at one time. Now it is 45%. This is not a real bonus and can not be cashed in while alive. This bonus is credited to your income benefit base to help calculate your lifetime withdrawals in the future. Don’t be misled into buying this annuity solely based on the bonus.