Delaware Life Target Income Choice Fixed Indexed Annuity In-depth Review

How does the Delaware Life Target Income Choice Fixed Indexed Annuity policy work?

An annuitant (maximum age at the time of policy issue: 85) can purchase the Delaware Life Target Income Choice Fixed Indexed Annuity with a minimum initial purchase amount of $25,000, and in return, they will earn market index returns (calculated through a formula that we will discuss shortly), credited as per the chosen crediting period. Apart from the regular crediting period, various events may trigger earnings credit, including free withdrawals, long-term care events, terminal illness or injury events, or when a death benefit is payable.

The Delaware Life Income Choice Fixed Indexed Annuity offers the annuitant to choose from one or more of the five indexes (S&P 500 Index, Invesco QQQ ETF, First Trust Capital Strength Barclays 10% Index, Janus Henderson Adaptive Market Leaders U.S. Index, and Franklin SG Select Index) to determine their earnings crediting formula. The S&P 500 index has 3 crediting strategies, and the other four indexes have one strategy each. The plan also offers a fixed-rate guaranteed interest strategy to choose from, making a total of 8 strategy options. We will discuss each available index briefly:

S&P 500 Index: The S&P 500 Index is a widely recognized benchmark for the U.S. stock market, tracking the performance of 500 large publicly traded companies listed on American stock exchanges. It is a market-capitalization-weighted index, meaning larger companies have a greater impact on its value. The index covers approximately 80% of the total U.S. equity market capitalization and is considered one of the best representations of the overall U.S. stock market and economy.

First Trust Capital Strength Barclays 10% Index: The First Trust Capital Strength® Barclays 10% Index aims to provide stable growth with a diversified portfolio that provides exposure to U.S. equities and Treasurys and targets a 10% volatility. The index creates a diversified portfolio by combining U.S. stocks selected based on capital strength methodology with a portfolio of four Barclays U.S. Treasury futures indexes. The Index tries to limit long-term realized volatility to 10% or less, dynamically adjusting the allocation between the underlying traded instruments and cash, which can reduce the overall rate of return compared to indexes without a volatility control mechanism.

Franklin SG Select Index: The Franklin SG Select Index is designed to deliver stable returns by dynamically adjusting its investment strategy across changing market conditions. It offers exposure to top-performing large and mid-cap U.S. stocks selected from Franklin Templeton's mutual fund universe. The index employs a multi-factor investing approach, focusing on value, quality, and momentum to identify stocks with strong growth potential. To manage risk, the index incorporates a volatility control mechanism targeting 5% annual volatility and adjusts its exposure by shorting an ETF tracking the S&P 500 Index. Additionally, it diversifies with 10-year U.S. Treasuries, adjusting bond allocations based on market conditions to further stabilize returns. This approach aims to protect against market downturns but also limits the index upside.

Invesco QQQ ETF: The Invesco QQQ ETF, also known as the Invesco QQQ Trust, is a prominent exchange-traded fund (ETF) that tracks the Nasdaq-100 Index. This index comprises 100 of the largest non-financial companies listed on the Nasdaq Stock Market, making the ETF a popular choice for investors seeking exposure to leading technology and innovative companies. Launched in March 1999, the Invesco QQQ ETF has consistently outperformed broader market indices such as the S&P 500, largely due to its focus on high-growth sectors like technology, consumer discretionary, and healthcare. Invesco QQQ is renowned for its high liquidity and is one of the most actively traded ETFs in the United States.

Janus Henderson Adaptive Market Leaders U.S. Index: The Janus Henderson Adaptive Market Leaders U.S. Index is a next-generation balanced strategy that dynamically adjusts its asset allocation across U.S. equities, corporate bonds, and treasuries. By utilizing options price information from global markets, the index aims to maximize expected compounded returns while setting strict parameters to minimize exposure to potential market declines. With an all-cap blend strategy, the index seeks to increase exposure to upside risk while carefully managing downside risks, making it a versatile option for investors focused on the U.S. market.

It is very important to note that, like other Fixed Indexed Annuities, the Delaware Life Target Income Choice Fixed Indexed Annuity comes with cap rates, participation rates, performance triggers, etc., for these indexes, meaning that you will be credited only a part of the index return to your annuity. These rates change frequently; I will discuss these rates more briefly.

Note: In addition to allocating funds in the following indexes, the annuitant also has the option to allocate funds at a fixed interest rate. These Fixed Rates change from time to time. The first-year fixed rate for the 10-year withdrawal charge period, as of the time of writing this article, was 3.00%.

The earnings crediting formula

The earnings crediting formula is one of the most important parts of this annuity discussion. It is important to know that we don’t simply get the index return credited to our annuity. The company has several rate-limiting mechanisms, including cap rates, participation rates, and triggers, that affect our earnings. These rates are subject to change over time, and the updated rates can be checked with your financial advisor or on the company’s website. 

Let’s have a look at the Delaware Life Target Income Choice Fixed Index Annuity rate sheet (as of November 2025) to understand how the earnings are determined.

From the above rate chart, you will notice that there are 8 interest crediting options (1 fixed and 7 indexed). Let’s have a look at different terms that are used by the company in the Target Income Choice Fixed Indexed Annuity rate chart:

Cap Rates: This refers to the rate at which your interest-earning capacity is capped. For example, if an index returns 12% but the contract’s cap rate is 6%, the annuitant will be eligible for an interest credit of 6% only. It doesn’t matter how much the index goes above the cap rate; the maximum interest that can be earned is the cap rate.

Participation Rate (PR): The participation rate describes the annuitant’s participation percentage in a return of an index. For example, suppose the participation rate is 150%, and the index returned 4% over the agreed time. In that case, the annuitant will be eligible for 150% of the return, i.e., 6%.

Performance-Triggered Index Option: A flat or positive index return triggers the declared interest rate to be credited to the contract value. If the index return is negative, no interest is credited, but there will be no loss, and the contract value will remain the same. The declared interest rate is set at contract issue and applies for the entire withdrawal charge period. In this case, the performance-triggered rate for the S&P 500 Index is 4.55%. 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 to the annuity will be 4.55% irrespective of the S&P 500's actual return.

Fixed Account Rate: If you opt for a fixed account rate, you simply earn the fixed rates 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 3.00%.

Out of the indexes offered by this plan, the wisest decision would be to choose the S&P 500 and Invesco QQQ-based indexing strategies for their transparency, proven returns, and global importance. All the other indexes have a volatility control mechanism in place, which limits the index's overall return-earning capacity.

Precision Portfolios

The annuitant can also choose from two model Precision Portfolios, which are designed to offer diversification benefits without the need to select indexing strategies manually. Each portfolio is constructed with set percentage allocations to individual index strategies from providers such as S&P, Invesco, Janus Henderson, First Trust, and Franklin Templeton, along with an allocation to the fixed account.

If I were to choose, I would focus solely on the S&P and Invesco QQQ strategies, and I would opt to pass on the Precision Portfolios. However, if you plan to go for the Precision Portfolio, I would prefer Option #1 because it offers broad-based indexes with a solid performance history, transparency, and strong expected returns.

Accessing your Money

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

Should your needs change unexpectedly and you need to take an excess withdrawal (a withdrawal that exceeds the free withdrawal amount available in a given contract year), you may be entitled to access additional funds, 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 Target Income Choice Fixed 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 charge of Delaware Life Target Income Choice Fixed Indexed Annuity is in line with all the other annuity issuers.

Once the surrender charge period ends, you can typically access your full contract value without fees. However, any withdrawal reduces both your contract value and, if applicable, the income base tied to optional riders, which may impact future guaranteed income.

An annuitant can also convert the contract into a stream of guaranteed income, known as annuitization. They can choose from various payout options designed to meet different needs.

Life Only – Provides income for as long as you live.

Joint and Survivor Life – Continues payments over two lifetimes, often used by couples.

Life with Period Certain (up to 30 years) – Pays income for life, but guarantees payments for a minimum period even if death occurs earlier.

Period Certain (up to 30 years) – Provides guaranteed payments for a set number of years, regardless of lifespan.

Single Life or Joint Life with Cash Refund – Ensures that if the annuitant(s) pass away before receiving payments equal to the original premium, the difference is refunded to beneficiaries.

Single Life or Joint Life with Installment Refund – Similar to the cash refund, but any remaining balance is paid out over time in installments.

These options allow flexibility in balancing lifetime income needs with legacy goals, offering a way to customize how and when funds are accessed in retirement.

Death Benefit

Upon the annuitant’s death, the beneficiary will get the greater of (i) the Account Value or (ii) the Surrender Value

Riders

The built-in lifetime income rider option(s) is the most important discussion of this annuity. The Delaware Life Target Income Choice Fixed Index Annuity offers a focused set of built-in and optional rider benefits designed to address longevity risk, health-related liquidity needs, and provide a predictable lifetime income. The product is centered around its two Guaranteed Lifetime Withdrawal Benefit (GLWB) riders, which serve as the core value proposition for annuitants seeking lifetime income.

Guaranteed Lifetime Withdrawal Benefit (GLWB) Riders

The Target Income Choice™ FIA provides two distinct GLWB options — RetireReady GLWB and RetireBuild GLWB, both available for an annual cost of 1.05% of the withdrawal benefit base. These riders are designed to convert the annuity into a predictable lifetime income stream while still offering index-linked growth potential.

RetireReady GLWB is structured for those planning to begin income sooner, offering a 20% upfront bonus to the withdrawal benefit base and a 12% annual simple interest roll-up for up to seven years.

RetireBuild GLWB caters to individuals with a longer horizon before turning on income, crediting 10% compound interest annually for up to 10 years. Waiting a full decade can result in more than 250% increase to your withdrawal benefit base.

Regardless of which GLWB option you select, the annual lifetime income amount is calculated by multiplying the Withdrawal Base by the Lifetime Withdrawal Percentage. The Withdrawal Base depends on the specific GLWB rider chosen, while the Lifetime Withdrawal Percentages are predetermined at the time of annuity purchase. At the time of writing this article, the lifetime withdrawal percentages were as follows:

To understand how the Target Income Choice™ FIA’s income riders operate, let’s walk through a simplified example using the RetireReady GLWB rider (the version designed for people planning to activate income sooner).

Example Scenario

Initial Premium: $100,000

Chosen Rider: RetireReady GLWB

Upfront Bonus: 20%

Annual Roll-Up Rate: 12% simple interest for up to 7 years

Income Start: After 7 years

Lifetime Withdrawal Percentage at Age 65: Assume 5% (example only)

Step 1: Apply the 20% Upfront Bonus

Immediately on day one, the withdrawal benefit base receives a boost.

Initial premium = $100,000

20% Bonus = $20,000

Starting Benefit Base = $120,000

This is not cash value. It is only used to calculate future guaranteed income.

Step 2: Apply 12% Annual Roll-Up for 7 Years

Each year, the benefit base grows by 12% of the initial premium (simple interest).

Annual roll-up = $100,000 × 12% = $12,000 per year

After 7 years, total roll-up = $12,000 × 7 = $84,000

Starting benefit base: $120,000

Roll-up added over 7 years: +$84,000

Benefit base at income start = $204,000

Step 3: Calculate Lifetime Income

If the client begins withdrawals at age 65 and the rider offers a 6.05% lifetime withdrawal rate, then:

Guaranteed Lifetime Income = 6.05% × $204,000 = $12,342 per year

This income is guaranteed for life—even if the contract’s actual account value depletes in the future.

Comparison with RetireBuild GLWB

If instead the client chose the RetireBuild GLWB, which grows 10% compound for 10 years:

Using the same $100,000 premium:

Benefit base after 10 years = $100,000 × (1.10)^10 ≈ $259,000

If the lifetime withdrawal rate at income start = 6.35%

Guaranteed Income = 6.35% × $259,000 = $16,447 per year

RetireBuild typically yields a larger benefit base and higher income, but only if the client waits longer before starting withdrawals.

Which Rider Should You Choose?

Selecting between the RetireReady GLWB and RetireBuild GLWB largely depends on when you plan to start income. RetireReady is better suited for individuals who expect to begin withdrawals within the first 5–7 years, as it provides a strong upfront bonus and a high simple roll-up rate that quickly builds the income base. In contrast, RetireBuild is designed for long-term planners who intend to defer income for 10 years or more. With a 10% compound roll-up, it typically produces a much larger income base, but only if you wait long enough.

In simple terms, choose RetireReady for earlier income, and choose RetireBuild for later income. For most soon-to-retire investors, the decision should align closely with their retirement timeline rather than chasing the highest theoretical benefit base.

Also, as with most annuities, the Delaware Life Target Income Choice 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.

Chronic Illness Income Multiplier Benefit: If you are diagnosed with a qualifying illness, the Chronic Illness Income Multiplier benefit will increase your annual withdrawal amount by 200% for up to 5 years (single life) or 150% for up to 5 years (joint life) for no additional cost.

Contract/Administrative Charge

The Delaware Life Target Income Choice Fixed Indexed Annuity levies no annual contract or administrative fees. However, it comes with a compulsory paid rider, Guaranteed Lifetime Withdrawal Benefit (GLWB), that, at the time of writing this article, costs 1.05% of the benefit base, deducted from your account value. This rider is discussed in detail in the previous section.

What Makes this Product Stand Out?

The Delaware Life Target Income Choice Fixed Indexed Annuity offers a few features that make a favorable case for this annuity. The ones that I like the most are

The plan offers the S&P Index with multiple crediting methodologies.

The Target Income Choice plan offers greater flexibility in terms of taking lifetime withdrawals from your account. Typically, in an annuity plan with a lifetime income rider, you have to wait until the contract anniversary to get your interest credited to your benefit base to receive a higher lifetime withdrawal amount. In this plan, your benefit base is credited with a pro-rata interest credit on the day you start taking lifetime income withdrawals.

No annual contract, mortality & expense, or administrative fees

The GLWB Rider offers annuitants two income choices depending on when they will need lifetime income withdrawals. If annuitants want income early in their retirement stage, they can opt for the RetireReady option, and if they prefer income later, they can opt for the RetireBuild option.

Free  Confinement and Terminal Illness Waiver Benefit: This no-fee rider is automatically included for owners under age 65 and includes both a Qualified Nursing Care and Terminal Illness Benefit.

Multiple Payout Options: Lump sum or Annuitization option with Life Only, Life with Period Certain, Joint and Survivor Life, etc. 

What I Don’t Like

This product is a decent product for people looking for growth and safety; still, there are some features that I believe could add more value for the annuitant. Some of the features that I don’t like about the policy are

The built-in GLWB rider comes at an annual cost of 1.05% of the benefit base, which, in my opinion, is on the higher side.

The plan offers lower cap and participation rates on its indexing strategies compared to other Delaware Life Fixed Indexed Annuities. If you are looking for a Delaware annuity that works best for growth and accumulation, check out our reviews for the Delaware Growth Pathway and Delaware Retirement Stages Select Fixed Indexed Annuities.

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.

Delaware Life Insurance Company

Delaware Life Insurance Company was founded in 2013 and is a subsidiary of Group 1001 Insurance Holdings, LLC. Group 1001 is a dynamic network of several insurance businesses. It is a relatively new player, but it is rapidly growing and making a name for itself in the market. In 2025, Delaware Life was top-rated in Barron’s 100 Annuities list. 

It is rated as follows by the rating agencies:

Although the ratings are not the best when we compare them with bigger players, they are good enough for you to consider buying an annuity.

Delaware Life Insurance Company has consistently maintained decent ratings for many years. It is considered to be financially strong and stable. As of June 2025, the company had assets of $56.2 billion, with more than 324,000 active annuity and life insurance policies. 

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

Conclusion

With the advancement in healthcare and technology, the average American today is living longer than ever. Therefore, it’s crucial to have a steady stream of income that can grow safely and reliably, providing a guaranteed income during 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.

The Delaware Life Target Income Choice is a fixed-indexed annuity that helps you grow and accumulate your savings with much less risk. Through its GLWB riders, it provides the annuitant with greater flexibility and a safeguard against unforeseen circumstances, allowing them to turn on income payments at any time without forgoing the pro-rata interest credit in the benefit base. If you are considering buying a Fixed Indexed Annuity that is flexible, provides protection, and want to take lifetime withdrawals that you will never outlive, the Delaware Life Target Income Choice may be a decent product to look at. Although you should keep in mind that this is not the best annuity for someone seeking growth and accumulation.

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 delve deeper into our extensive reviews, click here.