Sentinel Security Life Annuity Review

The Personal Choice annuity from Sentinel Security Life has a $2,500 minimum initial premium and a maximum issue age of 90. Although this contract earns interest at a fixed rate, its real draw is the selection of benefit riders annuitants can choose from. Here’s a breakdown of the options available to you:

• Required Minimum Distribution: This will let you make your required minimum distributions (RMDs) without having to worry about withdrawal fees or market value adjustments (MVAs).
• Preferred 10% Free Withdrawal: Beginning during your second year of ownership, your first withdrawal each year can surpass the allotted fee-free amount of 10%.
• Terminal Illness/Nursing Home Care: If you’re diagnosed with a heart attack, stroke, life-threatening cancer or another terminal illness, withdrawal charges are waived. The same applies to any situation where the annuitant is confined to a nursing home for 90 consecutive days or more.
• 72(t) Free Withdrawal: Should you take advantage of Rule 72(t), this rider offers a waiver for any related withdrawal fees.
• Death Benefit Feature: This adds a death benefit to your contract, making the payout to your beneficiaries equal to your contract’s value at the time of your passing.
• Accumulated Interest Withdrawal: If you plan on taking withdrawals from your contract that are equal to your accumulated interest at the time, this rider will waive all fees and MVAs.

Fees

There are no annual contract fees associated with this annuity. However, the contract’s various benefit riders come with interest rate reductions rather than traditional fee rates:

• Required Minimum Distribution: 0.16%
• Preferred 10% Free Withdrawal: 0.08%
• Terminal Illness/Nursing Home Care: 0.15%
• 72(t) Free Withdrawal: 0.05%
• Death Benefit Feature: 0.35%
• Accumulated Interest Withdrawal: 0.08%

The Personal Choice annuity has withdrawal charges, but you can take out as much as 10% of your contract value annually before incurring them. Beyond this, you’ll adhere to a specific schedule based on the length of the interest rate term you select.

In the event that you withdraw from your contract before age 59.5, the IRS will charge you a 10% income surtax. That’s on top of standard income taxes.

Realistic Return Expectations

Similar to a certificate of deposit (CD), the Personal Choice annuity from Sentinel Security Life offers better interest rates the longer you lock your money up. The rates as of Feb. 2021 go as follows:

• 5-year term: 2.80%
• 7-year term: 2.90%
• 10-year term: 3.00%

The Personal Choice Plus+ annuity takes the Personal Choice annuity a step further, as it provides access to four riders and an increased return potential. The latter benefit is based on the fact that this product is a fixed indexed contract, meaning annuitants can divide their money between a fixed account and an indexed account.

For the fixed account, your assets will grow based on a predetermined interest rate that Sentinel Security Life sets. Meanwhile, the indexed account increases or decreases in value depending on how the S&P 500 performs.

There are four benefit riders available with this contract, including:

• Required Minimum Distribution: RMDs you initiate won’t encounter any withdrawal fees or MVAs.
• Preferred 10% Free Withdrawal: Rather than stick to just 10% fee-free withdrawals annually, this rider permits annuitants to take out however much they want for their first withdrawal each year after their second contract anniversary.
• Death Benefit Feature: This rider waives all withdrawal fees that would typically accompany a lump sum death benefit payout to beneficiaries.
• Accumulated Interest Withdrawal: This opens up the chance for annuitants to withdraw their contract’s accumulated interest value on a fee-free basis.

To open the Personal Choice Plus+ annuity, you must be no older than 90 years old and have at least $5,000 in investable assets.

Fees

Like most fixed indexed products, the Personal Choice Plus+ annuity is devoid of any annual contract fees. If you purchase any benefit riders, though, your interest rate will be reduced by a certain amount. This is slightly different from a typical fee setup where you're charged a specfic fee rate that doesn't affect your interest rate at all.

• Required Minimum Distribution: 0.16%
• Preferred 10% Free Withdrawal: 0.08%
• Death Benefit Feature: 0.35%
• Accumulated Interest Withdrawal: 0.08%

The withdrawal fees for this contract work similarly to the Personal Choice annuity above, as you’re allowed to annually withdraw 10% of your contract value fee-free. If you go above this, you’ll pay fees according to the following five-year schedule:

Annuitants that withdraw from their account before age 59.5 will encounter a 10% income tax penalty in addition to their standard income tax rate.

Realistic Return Expectations

This is a fixed indexed annuity, so you earn interest in two different ways. As of Feb. 2021, Sentinel Security Life provides a 2.85% rate for your fixed account. Meanwhile, your indexed account will follow the performance of the S&P 500.

The Guaranteed Income Annuity comes in two variations that each come with a different premium bonus and withdrawal fee schedule. The first has a 10-year fee schedule with a one-time premium bonus that vests over 11 years. The latter option utilizes a 14-year fee schedule with a slightly increased up to 10% premium bonus that vests over 15 years.

There are multiple benefit riders available for this contract, and Sentinel Security makes you pick one. For the 10-year version, options include the Guaranteed Lifetime Withdrawal Benefit (GLWB) rider, the Legacy Benefit rider and the Accumulation Benefit rider. On the other hand, the 14-year contract only offers the Legacy Benefit rider and the Accumulation Benefit rider.

• GLWB rider: This provides a guarantee of monthly, quarterly, semi-annual or annual income for the life of the annuitant. The exact payout is decided based on your age and whether you choose single or joint payments. These income payouts can be stopped or started whenever you please.
• Legacy Benefit rider: If you want to provide a strong payout for your beneficiaries, this rider will boost your legacy benefit base (which will eventually dictate the size of your contract’s death benefit) by 4%.
• Accumulation Benefit rider: This rider is perfect for anyone who wants to protect their assets from possible losses in the market. In fact, you can begin receiving income as soon as your contract is issued, or you can hold off and leave the money as a death benefit for your loved ones. It is also the only rider with no associated fee.

Regardless of which iteration of this annuity contract you go with, the minimum initial premium is $5,000. The maximum issue age is 85 years old.

Fees

There are no annual contract charges that Guaranteed Income Annuity holders need to worry about. But should you decide to add on either the GLWB or Legacy Benefit rider to your contract, you will incur a charge:

• GLWB rider: 1.25% for years 1-5; 1.60% for years 6-10
• Legacy Benefit rider: 1.25% for years 1-5; 1.60% for years 6-10
• Accumulation Benefit rider: No fees

This annuity comes with a choice between either a 10- or 14-year interest rate guarantee period. Whichever one you choose will dictate the fees associated with any early withdrawals. Note that you can take out up to 10% of your purchase premium prior to these fees beginning.

In addition to standard income taxes, the IRS will hit you with a 10% income surtax if you withdraw any amount of money from your annuity before your turn 59.5.

Realistic Return Expectations

As an income annuity, long-term returns are not the main draw. As of Feb. 2021, Sentinel Security Life offers a 1% interest rate, with rates renewing every two years.

With a $2,500 minimum initial premium and a maximum issue age of 85, the Summit Bonus Index policy is a fairly standard fixed indexed annuity. It comes with both a fixed account and an indexed account, and you are free to allocate as much or as little as you want to each. The former receives a fixed interest rate, whereas the latter see gains or losses depending on how the S&P 500 performs.

As of September 2019, Sentinel Security is offering a one-time 7% bonus on your premium that will fully vest on your 11th contract anniversary. If you decide to add on the optional income rider for a fee, Sentinel Security will grant you an extra 1% bonus on top of that.

If you pass away before your annuity contract is complete, your named beneficiary will receive a payout that’s equal to your contract value. This applies unless you select the lifetime income payment option at annuitization.

Fees

Again, you won’t be on the hook for a fixed or percentage-based annual contract fee if you buy a Summit Bonus Index annuity. The optional Income Rider, though, costs 1.05% each and every year.

Sentinel Security Life lets annuitants withdraw up to 10% of their contract value per year before fees come into play. Once you surpass this cap, the charges below are applied. Fee rates vary depending on how old you are when your contract is issued, with lower fees applying to those who purchase their annuity at age 58 or older.

If you are younger than 59.5, the IRS will tack on a 10% income tax penalty when you withdraw from your annuity. Don’t forget, though, that your standard income tax rate will apply too.

Realistic Return Expectations

The potential returns from the indexed portion of any fixed indexed annuity are difficult to predict, as they depend entirely on how the associated index performs. For your fixed account, Sentinel Security Life is offering a 1.70% rate for the first year, as of Feb. 2021.