Farm Bureau Annuity Review

The Farm Bureau Money 4 annuity is a single premium fixed annuity. You can purchase a four-year-term contract with a single minimum initial premium of $25,000. Your money then grows tax deferred based on a fixed interest rate. The maximum issue age for the New Money 4 Annuity is 90. 

As with all annuities offered by Farm Bureau, you have several payout options. You can choose to receive an income stream monthly, quarterly or annually at the end of your contract. You can also choose a lifetime income stream. Death benefits are also available before you annuitize your contract.

Fees 

As is the case with most fixed deferred annuities, the New Money 4 option doesn’t charge any annual contract fees. But Farm Bureau would levy surrender charges if you access more than 10% of your account value, based on the following schedule:

And if you tap into your account before reaching age 59.5, the IRS may hit you with a 10% penalty tax, in addition to normal income taxes.

Realistic Return Expectations 

Your return on the New Money 4 annuity would depend largely on the size of your premiums, your interest rate and the payout option you select. As of Feb. 2021, current interest rates as set by Farm Bureau Financial Services are:

• $25,000 - $99,999: 1.25%
• $100,000+: 1.50%

The Portfolio 10 annuity by Farm Bureau is a flexible premium fixed annuity. This means that you can continue making additional premiums in addition to your opening payment. As a result, the combined value grows tax-deferred and takes advantage of compound interest. The current minimum guaranteed interest rate for the Portfolio 10 annuity is 1.00%. 

As the name suggests, Portfolio 10 is designed as a 10-year contract. You can open an account with a minimum initial premium of $500 and minimum additional premiums of at least $25. The maximum issue age is 85.

The Portfolio 10 offers numerous payout options. You can take periodic payments monthly, quarterly or annual. You can also opt for a lifetime income stream. Of course, the size of your payments can vary greatly depending on your payout option selection. You should carefully discuss these with your financial advisor in order to determine which is best for you. 

Fees 

The Portfolio 10 annuity doesn’t come with an annual contract fees. However, you would face surrender charges if you take more than 10% of your account value. Below, we provide Portfolio 10 surrender charge schedule. 

You may also be charged a 10% tax penalty if you withdraw your money before turning age 59.5. This is in addition to ordinary income taxes. 

Realistic Return Expectations 

The size of your return would vary based on several factors such as your premium payments, interest rate and payout selection. You can view Farm Bureau’s current interest terms below:

• $0 - $24,999: 1.00%
• $25,000 - $99,999: 1.00%
• $100,000+: 1.00%

The AccumuLock Indexed Annuity by Farm Bureau can provide you with an interest rate tied to the performance of the S&P 500. This is an index that tracks some of the largest companies in the U.S. across various sectors of the economy. It also has a fixed interest component to protect your initial investment. This is a flexible premiums indexed annuity. So you can keep putting money into it after you open your account with your initial premium. The minimum initial premiums is $5,000. 

As with many indexed annuities, the AccumuLock option provides with various interest-crediting strategies to choose from. We explain these below. 

• Annual Reset Point-to-Point Index Account: With this strategy, your interest gets credited annually based on the difference between the initial index value and the ending index value within a year. It takes the beginning index value on the month you open your contract and the end index value is taken on the same month the following year. A positive difference is subject to a cap or limit. If the cap is 5% and the difference is 7%, you get credited 5%. If the difference is negative, you won’t get any interest. But you won’t lose money either. 
• Monthly Averaging Index Account: This strategy credits interest based on the average performance of the index throughout a given year. So it averages out the final index value of each month. If the average is positive, your interest would reflect that percentage up to a cap. If the average is negative, your interest would be 0%. 
• Fixed Interest Account: The company provides you with a set interest rate which will not dip below 1%. You can allocate up to 50% of your premium toward a fixed account portion.

This annuity also comes with the Simple6 income rider that allows you to make guaranteed annual withdrawal for life. You can activate it once you’ve accumulated at least $25,000 in your account and you must be at least 40-years-old to activate the rider. When you activate this rider, you get a set benefit base. It increases each year by 6% for up to 20 years. You decide when to receive the withdrawal benefits after you turn 50 and the rider has been active for at least one year. The guaranteed income withdrawal percentage is determined at the time of the first rider withdrawal based on the maximum annual withdrawal percentage multiplied by the minimum base.  

The Chronic Illness benefit allows you to double your Simple Income Rider guarantee income withdrawal for up to five years if you become chronically ill or face a severe cognitive impairment. You can use it to cover any long-term care costs you need. However, you must meet the following criteria to qualify: 

• Must have been activated for at least two years.
• Your qualification must be reviewed annually.
• You must be chronically ill, cognitively impaired for a period of 90 days prior to qualification.

Fees 

The Accumulated Fixed Index annuity does not require annual fees or maintenance charges. But the company would charge a withdrawal fee if you take more than 10% of your account’s accumulated value. We provide the company’s current fee schedule below:

Realistic Return Expectations 

The fixed interest rate associated with this annuity is 1.50%, as of Feb. 2021. For the point-to-point indexing strategy, the cap is 3.50%. For the monthly average indexing strategy, the cap is 3%. These rates will change over time.