Introduction
The American Equity Guarantee Shield 5 Multi-Year Guaranteed Annuity (MYGA) is designed for conservative investors seeking a stable, tax-deferred, guaranteed return over a set period. Apart from fixed rate guarantees, it offers nursing home and terminal illness benefits, allowing flexible withdrawals if unexpected healthcare expenses arise. The product also features a Minimum Guaranteed Surrender Value (MGSV): the surrender value will never be less than 90% of the premium paid (minus any withdrawals), accumulated at the minimum guaranteed interest rate.
Here’s the high-level fine print of the American Equity Guarantee Shield 5 Multi-Year Guaranteed Annuity (MYGA).
| Product Name | Guarantee Shield 5 |
|---|---|
Issuing Company | American Equity Investment Life Insurance Company |
AM Best Rating | A (3rd of 13 ratings) |
Withdrawal Charge Period(s) | 5 year |
Surrender Charge Schedule | 9%, 8%, 7%, 6%, 5%, 0% |
Maximum Issue Age | 85 years |
Minimum Initial Purchase Amount | $10,000 |
Plan Types | IRA, Roth IRA, Nonqualified Account, SEP IRA, SIMPLE IRA, 401(a), etc. |
Free Withdrawals | 10% of the contract value can be withdrawn free of charge each year |
Death Benefit | Upon the annuitant’s death, the beneficiary will receive full Account Value without any surrender charges |
Free Benefits | Terminal Illness and Nursing Home Confinement Waiver |
Additional Riders | N/A |
Surrender Value | Account Value less any withdrawal charges/ MVA |
Minimum Guaranteed Surrender Value (MGSV) | The surrender value will never be less than 90% of the premium paid (minus any withdrawals), accumulated at the minimum guaranteed interest rate of 2.65% |
RMD Friendly | Yes |
Renewal Conditions | Option to continue with the MYGA for the same guaranteed period after the initial guaranteed period ends, but at the new rates available at that time |
| Band | Premium | Rate |
|---|---|---|
Low Band | $10,000 - $99,999 | 3.60% |
Mid Band | $99,999 - $249,999 | 3.85% |
High Band | $249,999 + | 3.85% |
Surrender/Early Withdrawal Charge
The American Equity Guarantee Shield 5 Multi-Year Guaranteed Annuity (MYGA) allows up to 10% of the contract value to be withdrawn free of charge each year.
Should your needs change unexpectedly, and you need to take an excess withdrawal (a withdrawal that is above the free withdrawal amount available in a given contract year), you may be entitled to access additional monies, although certain charges and penalties may apply. Any amount withdrawn in excess of the remaining free withdrawal amount is subject to a Surrender Charge. Below is the Surrender Charge schedule for the American Equity Guarantee Shield 5 Multi-Year Guaranteed Annuity (MYGA).
| Completed Contract Years | 1 | 2 | 3 | 4 | 5 | 6+ |
|---|---|---|---|---|---|---|
5-yr | 9% | 8% | 7% | 6% | 5% | 0% |
Market Value Adjustments - In case you need to surrender your policy, a Market Value Adjustment (MVA) will be applied to the portion of the withdrawal or surrender that exceeds the free withdrawal amount during the withdrawal charge period.
Contract/Administrative Charge
The American Equity Guarantee Shield 3 MYGA levies no annual contract or administrative fees.
What are MYGAs?
A Multi-Year Guaranteed Annuity (MYGA) is a type of fixed annuity that provides a guaranteed interest rate for a specified number of years, typically ranging from 3 to 10. Unlike variable or indexed annuities, where returns are linked to market performance, MYGAs offer a steady, predetermined return over the selected term. This feature makes them popular among conservative investors who seek predictable, low-risk growth of their assets, particularly in a retirement context.
MYGAs work similarly to Certificates of Deposit (CDs) in terms of fixed interest rates and defined maturity periods, but they offer additional benefits that make them attractive as retirement planning tools. MYGA funds grow on a tax-deferred basis, meaning that investors do not pay taxes on their gains until they begin making withdrawals. This allows the investment to compound more effectively over time, providing a distinct advantage over taxable investments with similar yields. Additionally, MYGAs offer the benefit of principal protection, ensuring that the initial investment is safe from market fluctuations.
About American Equity Investment Life Insurance Company
You must always keep in mind that, unlike CDs, annuities are not guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other federal insurance agency. An annuity's "guarantee" is only as strong as the insurance company that issues the annuity, so it is always important to assess the issuing company before buying an annuity.
American Equity Investment Life Insurance Company is a U.S.-based insurance provider headquartered in West Des Moines, Iowa. Founded in 1995, the company has grown to become a significant player in the fixed and indexed annuities market. American Equity specializes in developing, marketing, and administering annuity and life insurance products through its subsidiaries.
The company operates in all 50 states and the District of Columbia, serving over half a million clients nationwide. American Equity's product lineup primarily focuses on fixed index and fixed rate annuities, which are designed to help individuals preserve their retirement savings and secure a predictable income stream.
In recent years, American Equity has demonstrated financial stability, receiving rating upgrades from major credit rating agencies. As of December 2024, AM Best upgraded the company's Financial Strength Rating to "A" (Excellent) from "A-"
As of January 2025, it is rated as follows by the rating agencies:
| Rating Agency | Rating |
|---|---|
AM Best | A |
Fitch | A- |
S&P | A |
Simulator Data
| Product Name | Premium Band | AM Best | Max Issue Age | Additional Riders | Premium Range | Years | Interest Rate |
|---|---|---|---|---|---|---|---|
Guarantee Shield 5 | Low band | A | 85 | N/A | $10,000 - $99,999 | 5 | 3.60% |
Guarantee Shield 5 | Mid band | A | 85 | N/A | $99,999 - $249,999 | 5 | 3.85% |
Guarantee Shield 5 | High band | A | 85 | N/A | $249,999 + | 5 | 3.85% |
Rate Document - https://media.american-equity.com/Documents/01RS1169.pdf