Symetra Edge Elite Fixed Indexed Annuity Review

The Symetra Edge Elite Fixed Indexed Annuity is almost identical for both policy tenures, except for the crediting strategies and surrender charge schedule. For ease of discussion and better clarity, we will discuss the Symetra Edge Elite 5 Fixed Indexed Annuity for the rest of the article.

Product Policy

How does the Symetra Edge Elite Fixed Indexed Annuity policy work?

Any annuitant (maximum age at the time of policy issue: 85) can purchase the Symetra Edge Elite 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, 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.

The Symetra Edge Elite Fixed Indexed Annuity allows the annuitant to choose from one or more of the four available indexes—S&P 500 Index, Nasdaq-100 Index, JP Morgan ETF Efficiente 5 Index, and Putnam Dynamic Low Volatility Excess Return Index—to determine their earnings crediting formula. The S&P 500 offers four crediting strategies, while the JP Morgan ETF Efficiente and Putnam Dynamic indexes each provide five strategies, and the Nasdaq-100 index includes two strategies. Additionally, the plan features a fixed-rate guaranteed interest strategy, bringing the total number of strategy options to 17. Below, we will briefly discuss each available index.

1. 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.

2. Nasdaq-100® Index

Focused on the largest non-financial companies listed on the Nasdaq Stock Market, the Nasdaq-100® Index is heavily weighted toward the technology sector. The Edge Elite annuity provides two crediting strategies linked to this index, enabling investors to participate in the performance of innovative and high-growth companies.

3. JPMorgan ETF Efficiente® 5 Index

This index employs a diversified, multi-asset strategy, allocating across various asset classes, including equities, fixed income, and commodities, through exchange-traded funds (ETFs). It aims to achieve consistent returns with controlled volatility. The Edge Elite annuity offers five crediting strategies associated with this index, catering to investors seeking balanced growth with a focus on risk management.

4. Putnam Dynamic Low Volatility Excess Return Index™

Exclusive to Symetra's fixed indexed annuities, this index combines U.S. stocks, U.S. Treasury bonds, and cash, dynamically adjusting allocations to manage risk and maintain a target volatility level of 5%. With five available crediting strategies, this option is designed for those aiming for steady returns while minimizing exposure to market fluctuations.

Note: The JPMorgan ETF Efficiente® 5 Index and the Putnam Dynamic Low Volatility Excess Return Index are volatility-controlled indexes, meaning they aim to manage market fluctuations by adjusting asset allocations to maintain a target volatility level. While this approach helps control downside risk, it also limits potential upside gains. As a fixed indexed annuity investor, you already benefit from built-in downside protection, making the added volatility control less advantageous. In fact, the upside limitations imposed by these strategies may hinder your ability to achieve higher returns, which could be a drawback when compared to other index options with greater growth potential.

Fixed Rate: In addition to allocating the funds in the following indexes, the annuitant also has the option to allocate funds at a fixed interest. These Fixed Rates change from time to time. The Fixed Value Rate for the 5-year withdrawal charge period for the low band ($25,000 - $99,999) at the time of writing this article was 4.35%. You can view the latest rates of this annuity on the company’s website.

Rates and Costs

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 rates, caps, spreads, and triggers 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 Symetra Edge Elite Fixed Indexed Annuity rate sheet (as of January 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 crediting strategies. In total, this provides the flexibility to allocate the contract across up to 17 strategies—16 index-based options and one fixed-rate option. Additionally, you will notice that there are two funding bands: $25,000–$99,999 and $100,000 or more. A higher purchase payment places you in the higher band, which qualifies for better interest rates. The company presents four types of rates across all strategies, with the index allocation rate (participation rate) and cap rates being the most critical factors. Below, we discuss the types of crediting strategies offered by the company:

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%.
Enhanced Participation Rate: The Enhanced Participation Rate accounts offer policyholders the opportunity to achieve higher participation rates in exchange for an annual charge of 1%. This charge is fixed for the entire duration of the contract, providing cost certainty. This option may appeal to individuals who anticipate that the index will experience significant growth, as it allows them to capitalize on potential market gains while maintaining downside protection. However, it’s important to carefully consider the impact of the additional charge on overall returns, especially in scenarios where index performance may be lower than expected.
Cap Rates: 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.
Trigger Rate: The trigger rate strategy ensures that if the selected index has a flat or positive return over a given period, a predetermined interest rate is credited to the contract value. If the index return is negative, no interest is credited, but the contract value remains unaffected, ensuring no loss. For instance, if the index's value remains unchanged or experiences any positive growth during a one-year period, the declared trigger rate is applied to the account value to determine the interest credits. The interest credited under this strategy will never be negative. The declared trigger rate is set at the time of contract issuance and remains fixed for the entire withdrawal charge period. For the S&P 500 Index, the performance-triggered rate is currently set at 7.50%. This means that if the index does not experience a negative return within a given one-year period, even if the growth is flat at 0%, the contract will still be credited with 7.50% interest, regardless of the actual performance of the S&P 500. Notably, this performance-triggered rate is competitive when compared to similar annuity products, offering an attractive opportunity for policyholders seeking stable returns with downside protection.
Fixed Interest Rate: If you opt for a declared strategy / 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 4.35%, which is higher than what most fixed-indexed annuities offer.

Among these indexes, I would prefer to invest in the following strategy options due to their higher participation and cap rates:

S&P 500 1-Year Point-to-Point with Cap: Chosen for its higher cap rate.
S&P 500 1-Year Point-to-Point with Trigger Rate: Selected because it provides returns even in a flat market.
Nasdaq-100 1-Year Point-to-Point with Cap: Preferred for its higher cap rate.
Nasdaq-100 1-Year Point-to-Point with Trigger Rate: Considered for its ability to generate returns in a flat market.
JP Morgan ETF Efficiente 2-Year Point-to-Point with Participation Rate: Chosen for its higher participation rate.

There are very few Index annuities that have the ability to offer high caps and par rates. However, you must keep in mind that insurance companies tend to change rates frequently, and you must keep an eye on updated rates. You must consult a trusted financial advisor to know what indexes and strategies suit you best.

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 Symetra Edge Elite 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 the Symetra Edge Elite Fixed Indexed Annuity is in line with all the other annuity issuers.

Contract/Administrative Charge

The Symetra Edge Elite Fixed Indexed Annuity levies no annual contract or administrative fees

Riders

The Symetra Edge Elite Fixed Indexed Annuity is a plain-vanilla annuity that does not offer any optional paid riders. In my opinion, this actually appeals to many people who don’t understand or do not want to dive deep into the complex methodologies the riders often come up with. However, as with most annuities, the Symetra Edge Elite Fixed Indexed Annuity 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 30 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.

What Makes This Product Stand Out?

The Symetra Edge Elite 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 500 and Nasdaq-100 Index with good caps and participation rates, allowing you to grow your retirement account faster.
No annual contract, mortality & expense, or administrative fees
Free Confinement and Terminal Illness Waiver Benefit
Multiple Payout Options: Lumpsum or Annuitization option with Life Only, Life with Period Certain, Joint and Survivor Life, etc.

What I Don’t Like

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

Although the annuity offers good strategies on the S&P 500 Index and the Nasdaq-100 Index, I don’t like the other indexes that the company offers. These indexes have a volatility control mechanism that limits the overall return of the index. However, at the time of writing this article, the company is offering a good participation rate on those indexes to compensate for the low potential return.
I couldn’t find the Minimum Guaranteed Surrender Value (MGSV) rate on the marketing material of this annuity.

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.

Symetra Life Insurance Company

Symetra Life Insurance Company, established in 1957, is a U.S.-based provider of retirement plans, employee benefits, annuities, and life insurance. Headquartered in Bellevue, Washington, Symetra operates through a network of independent distributors nationwide. In 2016, Symetra was acquired by Sumitomo Life Insurance Company, one of Japan's leading life insurers, for $3.8 billion. This acquisition has strengthened Symetra's financial foundation, enabling strategic growth and product development.

Symetra offers a diverse range of products tailored to individuals and businesses:

Life Insurance: Term life, indexed universal life, and variable universal life policies designed to provide financial protection and flexibility.
Annuities: Fixed, fixed indexed, and immediate annuities aimed at delivering stable income streams for retirement planning.
Employee Benefits: Group life, disability, and medical stop-loss insurance solutions catering to employers seeking comprehensive benefits packages.

It is rated as follows by the rating agencies:

Symetra Life Insurance Company’s financial strength is reflected in the following figures as of FY2023:

Total Assets: $63.7 billion
Investment Portfolio: $51.3 billion
Investment Grade Portfolio: 96.9%
Stockholder’s Equity: $2 billion
Employees: 2500+

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

The Symetra Edge Elite is an annuity designed to safely grow your savings. It offers faster growth with principal protection through its higher caps and participation rates. The product's straightforward nature, devoid of optional paid riders, might actually appeal to those who prefer simplicity over complex rider methodologies. If you're considering a Fixed Indexed Annuity focused on growth and accumulation, the Symetra Edge Elite Fixed Indexed Annuity could be a worthy option.

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. Delve deeper into our extensive reviews.