What’s the Best 5-Year Fixed Annuity?

October 31, 2017

We’ve recently had agents calling in asking about the “best” 5-year fixed annuity.

STOP HERE! The "best" 5-year fixed annuity changes constantly, and we've realized that it's really difficult to keep this article up-to-date. However, we do keep our tip sheet updated, so please head there. You can download this tip sheet to see the current rates, which are updated regularly.

Get the 5-year annuity tip sheet now

Before we continue, a few more quick things:

  1. You can always access up-to-date annuity rates by visiting our Annuity Rates page. This is also included in the weekly email newsletter.
  2. If you’re just starting out with annuities, this article is where you should begin: The Ultimate Guide to Selling Annuities In the Senior Market
  3. If you’ve started selling annuities, you’ve probably come across these questions (we have answers): Annuity Q&A for Agents: Top Sales Experts Answer Your Trickiest Questions

OK, for the 4 carriers we’re going to talk about, you probably want to know about the comp. As far as comp ratings go, here’s the hierarchy from best to worst:

  1. KSKJ
  2. WULA (Western United Life Assurance, which is the new sister company of Manhattan Life)
  3. ACL and Sentinel (same comp)

For the following rate comparisons, everything is identical except that ACL and Sentinel have a 10% free withdrawal included. If this feature is important to your client, those two carriers might be the best option.

The client in this example is a 67-year-old male, and his deposit is for $400,000.

  WULA Sentinel ACL KSKJ
Annuity Value After Year 5 $465,965.02 $465,287.49 $464,818.79 $463,711
Amount Gained $65,965.02 $65,287.49 $64,818.79 $63,711

As you can see, WULA has the best return, but the 10% free withdrawal is not included. However, after year 1, the client can take out the interest, which is 3% or better – anything up to the RMD level is fair game.

It’s also important to note that WULA has a low-band and high-band interest rate. So, if the deposit is over $250k, the client gets the high-band interest rate, which is 3.10%. If they deposit below $250k (minimum of $10k), they get the low-band interest rate, which is 3.0%.

If it’s crucial for the client to be able to take out a larger sum of money, Sentinel and ACL have the 10% free withdrawal included.

What about that KSKJ Rocket Annuity?

You’ve probably noticed the flyers from KSKJ boasting a 3.25% interest rate. It’s a fantastic deal – and it’s only for a limited time.

A couple things to note about this rocket annuity:

  • It doesn’t allow for penalty-free withdrawals, which means this is only good for those who don’t need access to the money
  • The deposit is $50,000-$150,000 (your client must be willing to deposit within these guidelines)

The bottom line is that you have to be contracted with KSKJ, and you have to have the right client in order for this deal to make sense.

If you have any questions about these annuities, or you want some custom rates, please don’t think twice about getting in touch with me. You can email or call me using the links below, or you can start a chat in the bottom right corner of this screen.

Email Kirk Call Kirk

The New Horizons Annuity Department

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