EquiTrust Life Insurance Company has been around since 1996. But in 2015, Magic Johnson Enterprises, which is owned by basketball hall-of-famer Magic Johnson, bought a controlling interest in EquiTrust. The company offers fixed indexed, immediate and fixed annuities, as well as life insurance policies. The company manages a total of $20.7 billion in invested assets.
If you have questions about which annuity best fits your retirement plan, consider speaking with a financial advisor.
| Annuity | Fees | Annuity Type | Minimum Initial Premium | More Information |
|---|---|---|---|---|
| MarketTen Bonus Index® Find an Advisor |
|
Fixed indexed annuity | $5,000 |
Annuity TypeFixed indexed annuityMinimum Initial Premium$5,000 |
| Certainty Select® Find an Advisor |
|
Multi-year guarantee annuity | $10,000 |
Annuity TypeMulti-year guarantee annuityMinimum Initial Premium$10,000 |
| ChoiceFour® Find an Advisor |
|
Fixed annuity | $10,000 |
Annuity TypeFixed annuityMinimum Initial Premium$10,000 |
| Confidence Income Annuity® Find an Advisor |
|
Immediate annuity | $30,000 |
Annuity TypeImmediate annuityMinimum Initial Premium$30,000 |
EquiTrust Life Insurance Company’s financial strength was rated at a B++ by A.M. Best and a BBB+ by Standard & Poor’s (S&P). These grades rank as “Good” on each of these ratings companies’ respective charts.
MarketTen Bonus Index®
The MarketTen Bonus Index® has a maximum issue age of 80 and a minimum initial premium requirement of $5,000. The top feature of this annuity is the 6% bonus you’ll receive on all premiums you make during your first five years of ownership.
As a fixed indexed annuity, you’ll receive both a fixed and an indexed account. The money in the fixed account will grow based on a specific rate, whereas the indexed one earns interest based on the performance of one of five indexes. You are given full freedom to allocate as much to each of these accounts as you want and to choose which index you want your money to follow.
EquiTrust affords annuitants the right to add on an optional income rider to this contract. For a fee, this rider will compound the contract’s benefit base by 6.5% for as many as 10 years.
Fees
The fee schedule for the MarketTen Bonus Index annuity is fairly light, as you won’t pay any annual contract fees. However, should you decide to add on the optional income rider to your contract, you’ll pay a 1.00% annual rider fee.
Provided you have owned your contract for at least one year and are at least 50 years old, EquiTrust will allow you to withdraw up to 10% of your contract value per year. Anything past this mark will come with a withdrawal fee.
| Withdrawal Fee Schedule | ||||||||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | Year 11+ |
| 10% | 10% | 10% | 10% | 8.5% | 7% | 5.5% | 4% | 3% | 1.5% | 0% |
In addition to the withdrawal fees charged by EquiTrust, don't forget that the IRS will hit you with a 10% income tax penalty if you withdraw funds from your annuity before you turn 59.5.
Realistic Return Expectations
EquiTrust does not publish its fixed interest rates for this annuity. For the indexed account, returns depend on which index you choose to follow, how much you allocate to the account and how that index returns. Given the inherent unpredictability of the market, it’s impossible to accurately predict what types of returns you could see.
Certainty Select®
The Certainty Select® annuity comes in five variations: three-year, five-year, six-year, eight-year and ten-year. Each of these refers to the length of the contract’s guarantee period, which is the time for which your initial interest rate is guaranteed. This allows you to customize your contract to your personal financial situation.
The death benefit associated with this annuity is extremely robust. Should you pass away, your beneficiaries will receive the full accumulation value of your account. Both qualified and non-qualified account holders can open this annuity with a minimum of $10,000. The maximum issue age is 90 years old.
Fees
Fees are largely held to a minimum with the Certainty Select annuity, and you won’t have to pay any annual fees to hold onto your contract.
As soon as you open your account, you can withdraw up to the amount of interest you’ve cumulatively attained. Should you surpass the allotted withdrawal, look out for a surrender charge.
| Withdrawal Fee Schedule | |||||||||||
| Term Length | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | Year 11+ |
| 3-Year | 10% | 10% | 9% | 0% | |||||||
| 5-Year | 10% | 10% | 9% | 9% | 8% | 0% | |||||
| 6-Year | 10% | 10% | 9% | 9% | 8% | 8% | 0% | ||||
| 8-Year | 10% | 10% | 9% | 9% | 8% | 8% | 7% | 7% | 0% | ||
| 10-Year | 10% | 10% | 9% | 9% | 8% | 8% | 7% | 7% | 6% | 5% | 0% |
If you’re preparing to withdraw funds from your annuity before you turn 59.5 years old, you may want to think twice. Not only will you have to pay standard income taxes, but a 10% tax penalty will be levied against you.
Realistic Return Expectations
With the Certainty Select annuity, the longer the guarantee period term, the better your interest rate will be. Check with EquiTrust to find of what rates they are currently offering for this fixed contract.
ChoiceFour®
As its name might indicate, the ChoiceFour® fixed annuity has a choice of four versions that each come with different benefits. For reference, the base contract comes with no added features and boasts a nine-year withdrawal fee schedule and free withdrawals up to an amount equal to your last year of interest earnings. Here’s a breakdown of the other three choices:
- Market Value Adjustment (MVA) option: This gives you a 1.50% bonus to your premiums. It maintains a nine-year withdrawal fee schedule and free withdrawals up to an amount equal to your last year of interest earnings. Of course you'll have to contend with MVAs too.
- Liquidity option: This shrinks your withdrawal fee schedule to six years and lets you withdraw up to 10% of your contract value after your first year of ownership.
- Liquidity + MVA option: This combines the two options above, meaning you get a six-year withdrawal fee schedule, a 1.50% premium bonus, MVAs and free withdrawals up to 10% of your contract value as long as you’ve owned your account for one year.
To open this annuity, you must have no less than $10,000 to invest and be 85 years old or younger.
Fees
Annuitants will not need to pay an annual fee with this contract. There are, however, withdrawal charges if you take out more than the amount EquiTrust allows during your contract’s surrender period.
For both the Base and MVA ChoiceFour contracts, you can withdraw as much as the equivalent of your interest earned over the last year. The Liquidity and Liquidity + MVA ChoiceFour contracts operate the exact same way during your first year as owner. But once the second year begins, withdrawals are fee-free for up to 10% of your account’s overall value.
| Withdrawal Fee Schedule | |||||
| Contract Type | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Liquidity | 12% | 11% | 10% | 9% | 8% |
| Liquidity + MVA | 12% | 11% | 10% | 9% | 8% |
| Base | 12% | 11% | 10% | 9% | 8% |
| MVA | 12% | 11% | 10% | 9% | 8% |
| Withdrawal Fee Schedule (cont.) | ||||
| Year 6 | Year 7 | Year 8 | Year 9 | Year 10+ |
| 7% | 0% | |||
| 7% | 0% | |||
| 7% | 6% | 4% | 2% | 0% |
| 7% | 6% | 4% | 2% | 0% |
If you withdraw from your annuity contract prior to reaching age 59.5, the IRS will levy a 10% income surtax. Be mindful that this in addition to standard income taxes.
Realistic Return Expectations
Like most annuity companies, EquiTrust does not publicly release its fixed interest rates. However, you can check with the company to see what they are currently offering. Rememeber that rates will renew every year, which means your annual earnings will vary.
Confidence Income Annuity®
The Confidence Income Annuity® requires new annuitants to generally be 90 years old or younger and have at least $30,000 to invest in an opening premium. Once your account is open and you’re ready to begin receiving payments, EquiTrust lets you pick from monthly, quarterly, semi-annual and annual payments.
When it comes to payout options, there are three choices:
- Fixed period: Payments last for 5 to 20 years, regardless of whether the annuitant is alive or not. If not, the beneficiary will take over payments.
- Single life: Payments will carry on for the entirety of the annuitant’s lifetime. If you want a backup plan, you can also set a fixed period.
- Joint life: Payments persist until both the annuitant and their spouse have passed away. Again, a fixed period is available to be added on.
Fees
Immediate annuities generally don’t have fees associated with them. The Confidence Income Annuity is no exception, as contract holders will not pay annual contract fees or withdrawal charges.
Be wary of the fact that an annuity withdrawal made before age 59.5 likely means you’ll be charged a 10% income surtax beyond your standard tax rate.
Realistic Return Expectations
The returns of the Confidence Income Annuity are dependent on what guarantee period you choose. To illustrate what you can expect to earn on a $100,000 premium, EquiTrust offers the following projections:
- 5-year guarantee period: $1,718.51
- 10-year guarantee period: $933.31
- 15-year guarantee period: $673.39
- 20-year guarantee period: $551.20
Investing Tips
- If you’re considering incorporating an annuity into your retirement income plan, a financial advisor can help guide your decision. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
- Don't forget that any investments held outside retirement accounts are subject to capital gains taxes, which can take a bite out of your nest egg. To figure out how much you might owe, stop by our capital gains tax calculator.
All information is accurate as of the writing of this article.
