Brighthouse Shield Level Pay Plus II Indexed Annuity Review

Product Description - Brighthouse Shield Level Pay Plus II Registered Index-linked Annuity (RILA)

The Brighthouse Shield Level Pay Plus II Registered Index-linked Annuity (RILA) is designed to provide policyholders with flexibility, growth potential (with a level of downside protection), and an optional rider to get lifetime income payments. It is best suited for individuals seeking higher growth potential than a fixed indexed annuity, with customizable downside protection to limit losses. It appeals to pre-retirees and retirees who want market exposure while maintaining control over their risk level, and potentially want lifetime income payments. Let’s have a look at the high-level fine print of the Brighthouse Shield Level Pay Plus II Registered Index-linked Annuity (RILA), and then we will discuss each point in detail.

How Does the Brighthouse Shield Level Pay Plus II Registered Index-linked Annuity (RILA) Work?

The Brighthouse Shield Level Pay Plus II is a Registered Index-Linked Annuity (RILA) that provides a combination of market-linked growth, downside protection, and optional lifetime income payments. It allows policyholders to balance risk and reward by selecting from multiple allocation options, including indexed and fixed-rate accounts. Here’s a detailed breakdown of how it works:

Initial Setup and Funding

Minimum Payment: $25,000
Maximum Payment (Without Prior Approval): $1,000,000
Issue Age: 0 to 85 years old
Plan Types: Traditional IRA, Roth IRA, SEP IRA, Beneficiary IRA, Non-Qualified, Non-Qualified Beneficiary (Stretch)​

After making an initial payment, policyholders have the flexibility to choose how their funds will be allocated across various indexed accounts or the fixed rate account. These allocation choices play a major role in how the annuity performs over time. Apart from the regular crediting period, there are various events that may trigger earnings credit: On free withdrawals, for a long-term care event or terminal illness, or injury event, or when a death benefit is payable. All these interest credits are credited to a bucket called “Account Value.” This bucket is your annuity account balance, and all your withdrawals take place from it. 

There’s also another bucket called “Benefit Base,” which is exclusively used to calculate lifetime income payments if you opt for the optional paid lifetime income payment rider. I will discuss more on the rider in the latter part of this annuity review.

The Brighthouse Shield Level Pay Plus II Registered Index-linked Annuity (RILA) offers the annuitant to choice of one or more of the four indexes (S&P 500 Index, Russell 2000 Index, MSCI EAFE, and Nasdaq-100) to determine their earnings crediting formula. Additionally, the plan features a fixed-rate guaranteed interest strategy. Below, we will briefly discuss each available index.

S&P 500® Index: This widely recognized index comprises 500 leading U.S. companies across diverse industries, serving as a barometer for the overall U.S. equity market. Within the Edge Elite annuity, the S&P 500® Index offers four crediting strategies, allowing annuitants to benefit from the growth potential of the U.S. stock market while safeguarding against downside risk.

MSCI EAFE Index: MSCI EAFE is a widely recognized international equities index consisting of large companies across developed countries in Europe, Australasia, and the Far East, excluding the U.S. and Canada. MSCI EAFE includes equities across a range of industries and regions, providing broad opportunities for growth. Again, It is important to note that the Nationwide Peak plan has caps in place for the MSCI EAFE index, meaning that you will be credited only a small part of the MSCI EAFE return to your annuity. 

Russell 2000 Index: The Russell 2000 Index is one of the world’s most popular indices, tracking 2,000 smaller companies included in the Russell 3000 Index. As of the end of 2024, it has a total market capitalization of $3.5 trillion. The Russell 2000 has a well-established history of growth, impact, and performance. Created in January 1984, it serves as a comprehensive and unbiased barometer for small-cap companies, with an annual reconstitution process that ensures larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.

Nasdaq 100 Index: The Nasdaq-100 Index includes 100 of the largest non-financial companies listed on the Nasdaq Stock Market, with a strong focus on technology-driven firms. This index is heavily weighted toward innovative industries such as software, e-commerce, and biotechnology, providing annuitants with the opportunity to participate in the growth of some of the world’s most advanced and high-performing companies. While the Nasdaq-100 offers the potential for higher returns, it may also come with greater volatility due to the concentration in the tech sector.

Note: In addition to allocating funds in the following indexes, the annuitant also has the option to allocate funds at a fixed interest rate, which may change periodically. At the time of updating this article, the 1st-year fixed interest rate for the 6-year withdrawal charge period was 3.50%. However, these rates change frequently, so it is essential to check with your trusted financial advisor for the latest rates.

Rates and Costs Associated with the Brighthouse Shield Level Pay Plus II Indexed Annuity

The earnings crediting formula

The earnings crediting formula is the most important part of this annuity discussion. It is important to know that we don’t simply get the index return credited to our annuity. There are a few rate limitations (in the form of caps and other rates) that the company has in place that affect our earnings. These rates tend to change over time, and the updated rates can always be checked on the company’s website.

Let’s have a look at the Brighthouse Shield Level Pay Plus II Indexed Annuity rate sheet (as of July 2025) to understand how the earnings are determined.

The first thing to note is that the annuity offers the option to choose from four indexes, each with multiple cap rate, step rate, and step rate edge strategies. Besides these index-based strategies, the company also offers a fixed-rate strategy. In total, this provides the flexibility to allocate the contract across 29 strategies, including 28 index-based options and 1 fixed-rate option. Below, we discuss the types of crediting strategies offered by the company:

Cap Rate: This refers to the maximum limit on the interest that can be credited to your annuity. For example, if an index returns 12% but the contract’s cap rate is 6%, the annuitant will receive an interest credit of only 6%. No matter how much the index exceeds the cap rate, the maximum interest that can be credited to the contract will always be limited to the cap rate.

Step Rate: A flat or positive index return triggers the Step rate to be credited to the contract value. If the index return is negative, no interest is credited, but there will be no loss till the level of protection chosen. Suppose the change in the value of the index during that one year is zero or positive. In that case, the step rate is multiplied by the option’s account value to determine the index interest credits. The declared interest rate is set at contract issue and applies for the entire withdrawal charge period. In this case, the step rate for the S&P 500 Index for a 10% shield rate is 11.00%. It means that if the S&P Index doesn’t go negative for a given 1-year period (even if the growth is 0% and not negative), the interest credited will be 11.00% irrespective of the S&P 500's actual return. It is noteworthy that the company offers a good step rate for the S&P 500 Index when compared to other similar annuities.

Step Rate Edge: Step Rate Edge is an index crediting strategy that offers the opportunity to earn a predetermined interest rate, called the Edge Rate, even in mildly negative markets. At the end of the term, if the index return is greater than or equal to the chosen downside protection level (the Shield Rate), the Edge Rate is credited to the contract. This means you can still earn a positive return even if the market is slightly down, as long as the decline doesn’t exceed your protection level. However, if the market drops more than the Shield Rate, the contract absorbs the loss beyond that threshold, and no Edge Rate is credited. This strategy strikes a balance between growth potential and partial downside protection.

Fixed Interest Rate: If you opt for a declared strategy / fixed account rate, you simply earn the fixed rate for a particular period specified by the company before your policy begins. These rates are usually low/at par as compared to other fixed avenues, such as CDs and MYGAs, so you should avoid fixed rates in a general scenario. The 1-year fixed rate on this policy at the time of writing this article was 3.50%.

Shield Rate: The Shield Rate (level of protection) is the amount of any negative index performance that is absorbed by the company at the term end date. Negative index performance beyond the Shield Rate could result in a loss (unlike fixed indexed annuities where you cannot loose account value in case of market downturn).

Let's understand this with two different scenarios.

Term 1: Activating the Shield Rate: Emily and Alex, nearing retirement in a decade, seek to diversify their investment portfolio. After consulting with a financial advisor, they allocate $120,000—a segment of their retirement funds—into a Shield Option with a 1-year term, opting for an index of their choice and a Shield 10 level of protection. By the term's end:

The selected index sees a downturn of 12%

Thanks to the Shield Rate, Brighthouse Financial offsets 10% of this downturn

Emily and Alex sidestep $12,000 in potential losses

However, their account value will still lose 2%, i.e., $2,400. 

Term 2: Capitalizing on Market Upswing: The protective measures of their Shield annuity minimize Emily and Alex's initial losses. With the renewal of their Shield Rate for another year, they witness:

A robust 18% upswing in their chosen index

Given their 10% protection, they benefit from an enhanced Cap Rate of 16.25%

Their investment appreciates by 16.25%, enhancing their account value

They also had the option to choose greater protection of 25%, but then they would have been entitled to a cap rate of just 9.75%, which means they would be giving up on an additional 6.5% of Index gains.

This scenario serves as an illustrative example to demonstrate the operational dynamics of the Shield annuity amidst fluctuating market conditions, showing its capacity to shield investors from significant downturns while allowing them to enjoy market upswings.

Among these strategies, I prefer the following strategies due to relatively higher rates offered by these strategies:

The S&P 500 Index with a 1-year point-to-point with cap option
The S&P 500 with 1-year step rate options
The Russell 2000 annual point-to-point with cap rate, and
The MSCI EAFE annual point-to-point with cap rate

How Does it Work?

When you opt for the GLWB rider, it overlays a dedicated benefit  base on top of the contract’s account value. This benefit base is different from the account value and is exclusively used for calculating lifetime income payments. The Benefit Base starts equal to the initial premium and can never decline due to market loss; instead, it can capture growth in two ways. The annuitant can opt for either the “Market Growth” or “Market Growth with Rollup” option.

Market Growth Option

The growth of your account value is based on index performance and the elected Shield Options.

Automatic step‑ups: On every rider anniversary, if the account value (after charges) exceeds the Benefit Base, the Base is lifted to that higher level; step‑ups remain available through the anniversary just before the older owner’s 91st birthday.

Rider Withdrawals

The annuitant can choose to start lifetime payments anytime after attaining a minimum age of 59½. The amount that an annuitant can withdraw each year under the Market Growth rider is determined by the following formula:

Benefit Base × Lifetime Withdrawal Percentage = Annual Benefit Payment

The benefit base represents the current balance used for lifetime‑income calculations and is determined as described earlier.
Lifetime withdrawal percentage: At the chosen income start date, the annual withdrawal percentage is locked in according to the older covered person’s age and whether income is based on single or joint life. Rates begin at 5.25 % for Single Life and 4.75 % for Joint Life at age 59½, rising gradually to 8.00 % and 7.50 %, respectively, after attaining an age of 75 and a minimum of 11 years in contract. Depending on when you choose to begin receiving income, you may generally benefit from the higher withdrawal rates available if you select Market Growth compared to Market Growth with Rollup. Essentially, waiting longer boosts the guaranteed payout percentage. Below is the lifetime withdrawal percentage chart for each age:

Market Growth with Rollup

A Rollup Rate of 5% will be applied to the Benefit Base on each contract anniversary for the first 10 contract years from the date of issue in years when there are no withdrawals taken. The Rollup Rate is calculated using simple interest based on the Net Purchase Payment Amount. For example, a $100,000 purchase payment and 5% rollup would result in a set rollup amount of $5,000 each year the rollup applies. The Rollup Rate is applied before deducting any rider charge and before taking into account any Automatic Step-Ups

Growth From the Higher of Two Values: At the end of the contract year, the Rollup Rate is applied to the Benefit Base and then compared to the account value to determine whether an Automatic Step-Up should be applied. The new Benefit Base will then reflect the higher value of either the 5% rollup or the step-up.

Rider Withdrawals The annuitant can choose to start lifetime payments anytime after attaining a minimum age of 59½. The amount that an annuitant can withdraw each year under the Market Growth with Rollup rider is determined by the following formula:

Benefit Base × Lifetime Withdrawal Percentage = Annual Benefit Payment

The benefit base represents the current balance used for lifetime‑income calculations and is determined as described earlier.
Lifetime withdrawal percentage: At the chosen income start date, the annual withdrawal percentage is locked in according to the older covered person’s age and whether income is based on single or joint life. Rates begin at 5.25 % for Single Life and 4.75 % for Joint Life at age 59½, rising gradually to 6.75 % and 6.25 %, respectively, after attaining an age of 75 and a minimum of 11 years in contract. Depending on when you choose to begin receiving income, you may generally benefit from the higher withdrawal rates available if you select Market Growth compared to Market Growth with Rollup. Essentially, waiting longer boosts the guaranteed payout percentage. Below is the lifetime withdrawal percentage chart for each age:

Even if the account value reaches zero (due to annual payments), the annuitant will continue to receive the guaranteed withdrawal amount for life, given no excess withdrawals take place.

However, non‑income withdrawals (including free‑withdrawal amounts) before income starts reduce the Benefit Base proportionately and may reduce it by more than the dollar withdrawn when the Base already exceeds the account value. Careful withdrawal planning is therefore essential to preserve future income.

Rider Costs

Either of the GLWB rider (Market Growth or Market Growth with Rollup) carries a 1.5 % annual charge, calculated against the benefit base and deducted from the account value, regardless of whether single‑ or joint‑life income is elected. Because the benefit base is typically higher than the account value (due to roll‑ups and step‑ups), the dollar amount of the fee often works out to more than 1.5% of the actual account value, so keep that effective cost in mind.

In my view, the 1.5% annual fee is relatively high compared to similar annuity products in the market. Moreover, many competing annuities offer stronger benefit base growth, often with compound roll-ups, whereas this rider provides only a 5% simple roll-up. The combination of higher costs and limited growth potential for the benefit base reduces the overall value proposition of this GLWB rider, making it less appealing in comparison to other options.

Also, as with most annuities, the Brighthouse Shield Level Pay Plus II Indexed Annuity also has free in-built nursing home and terminal illness waivers.

Nursing Home Waiver: After the first contract year, an annuitant can withdraw up to 100% of the contract’s accumulated value if he is confined to a Qualified nursing home for at least 90 consecutive days. No withdrawal charge or MVA applies if the owner qualifies for this benefit. Diagnosis must occur after the contract is issued, and written proof with supporting documentation is required from a qualified physician.

Terminal Illness Waiver: After the first contract year, an annuitant can withdraw up to 100% of the contract’s accumulated value if he is diagnosed with a terminal illness with a prognosis of 12 months or less. No withdrawal charge or MVA applies if the owner qualifies for this benefit. Diagnosis must occur after the contract is issued, and written proof with supporting documentation is required from a qualified physician.

Surrender/Early Withdrawal Charge

Each year, you are allowed a 10% free withdrawal of your contract value without incurring charges, fees, or penalties.

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 Brighthouse Shield Level Play Plus II Indexed Annuity:

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. The surrender charge schedule is different for the different tenures of annuities and also changes for some states. 

The surrender charges of the Brighthouse Shield Level Pay Plus II Indexed Annuity are in line with all the other annuity issuers.

Contract/Administrative Charge The Brighthouse Shield Level Pay Plus II Indexed Annuity levies no annual contract or administrative fees. However, if you opt for either of the GLWB riders, a 1.50 % annual charge is levied, which is calculated against the benefit base and deducted from the account value

What Makes This Product Stand Out?

The Brighthouse Shield Level Pay Plus II  Indexed Annuity offers a few features that make a favorable case for this annuity. The ones that I like the most are:

Broad Menu of Market Index Strategies: The annuity provides access to a wide range of equity and volatility‑controlled indices, giving contract owners flexibility to diversify allocations and seek different growth profiles.
Downside Protection with Enhanced Cap Rates: Unlike other annuities, which offer 100% downside protection, this annuity provides three tiers of protection: 10%, 15%, and 25%. By accepting higher levels of risk, you are eligible for a higher cap rate; for instance, a 10% protection level entails greater risk compared to a 25% protection level.
No Annual Contract, Mortality & Expense, or Administrative Fees
Free Confinement and Terminal Illness Waiver Benefit
Multiple Payout Options: Owners can choose a lump‑sum distribution or annuitize under Life Only, Life with Period Certain, Joint‑and‑Survivor Life, and other structures to suit income goals.

What I Don’t Like

There are certain aspects of the product that could offer more value to annuitants. Some of the features that I find less favorable include:

Relatively Higher Lifetime Income Rider Cost: The cost of the Guaranteed Lifetime Withdrawal Benefit (GLWB) rider is relatively higher compared to other similar annuities. Also, the benefit base account grows at a relatively lower rate, making the lifetime income rider unattractive.

Company Details

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.

Brighthouse Financial

Brighthouse Financial, established as an independent company following its separation from MetLife in 2017, is headquartered in Charlotte, North Carolina. It has quickly cemented its reputation in the insurance and financial services sector, focusing primarily on life insurance and annuities.

As a specialist in these areas, Brighthouse Financial offers a range of products designed to help clients achieve financial security, including various types of annuities and life insurance policies. The company serves customers across the United States through multiple distribution channels.

The financial robustness of Brighthouse Financial is highlighted by its ratings from major credit rating agencies:

Brighthouse’s financial strength is reflected in the following figures as of FY2024:

Total Assets: $203.02 billion

Investment Portfolio: $122.43 billion

Annuity Sales: $10 billion

Stockholders’ Equity: $3.3 billion

Employees: 1400+

Going by the operating history, financial numbers, and ratings, we can safely gauge that you can trust your savings with the Brighthouse Life Insurance Company.

Conclusion

With the advancement in healthcare and technology, the average person today is living longer than ever. So, it’s very important to have a stream of income that can grow safely and steadily and have the ability to provide a guaranteed income during the retirement years. This not only helps you mitigate the risk of outliving your income but also ensures that you continue to live a decent life even in your retirement.

Brighthouse Shield Level Pay Plus II Indexed Annuity combines meaningful downside protection with an attractive menu of index crediting strategies. Additionally, it features an optional paid lifetime income rider, which allows annuitants to receive lifetime income payments that they cannot outlive.

Investors seeking higher equity-linked growth opportunities with a certain level of downside protection may find the Shield Level Pay Plus II annuity to be a competitive choice, particularly if lifetime annual payments are a priority and the rider’s fee is reasonable relative to the added guarantees. As with any indexed annuity, growth potential is ultimately limited by crediting caps, and early non-income withdrawals can reduce the benefit base. Prospective buyers should carefully weigh these trade-offs against their time horizon, liquidity requirements, and broader retirement income strategy. When positioned appropriately, Shield Level Pay Plus II can serve as a stable core holding that complements market-based assets while providing a clear path to guaranteed lifetime income.

We understand that choosing the right annuity can be a complex decision, influenced by a myriad of factors such as market conditions, individual financial goals, and evolving life circumstances. To better serve you in this critical decision-making process, we regularly conduct in-depth reviews of various annuity products, examining features, costs, and potential benefits. To dive deeper into our extensive reviews, click here.