How it works
Athene Accumulator Fixed Indexed Annuity: product description and policy
The Athene Accumulator is a Fixed Indexed Annuity (FIA) plan that offers the annuitant (annuity investor) an opportunity to earn a market index-linked return without having to incur the risk of market downside. This plan may fit someone who wants to build retirement savings while keeping principal-protection features in place. It may also appeal to buyers who want the potential to leave money for loved ones.
Let’s have a look at the high-level fine print of the Athene Accumulator Fixed Indexed Annuity, and then we will discuss each point in detail.
| Product Name | Accumulator |
|---|---|
| Issuing Company | [Athene Annuity and Life Company](https://annuityrateshq.com/reviews/athene-annuity-reviews) |
| AM Best Rating | A+ (2nd of 13 ratings) |
| Withdrawal Charge Period(s) | 5, 7, and 10 years |
| Maximum Issue Age | 5-year withdrawal charge term - 85 Years 7-year withdrawal charge term - 83 Years 10-year withdrawal charge term - 80 Years |
| Minimum Initial Purchase Amount | $5,000 |
| Surrender Charge Schedule | Varies for different tenure policies |
| Crediting Period and Strategies | - **1-year** or **2-year** point-to-point with participation rate - 1-year point-to-point with cap - 1-year fixed with interest rate guaranteed |
| Plan Types | - IRA - Roth IRA - Nonqualified Account - SEP IRA - SIMPLE IRA - 401(a) |
| Indexes | - S&P 500 Index - S&P 500 FC Index - BNP Paribas Multi-Asset Diversified 5 Index - NASDAQ FC Index - AI-Powered US Equity Index - AI-Powered Global Opportunities Index - UBS Innovative Balanced Index |
| Free Withdrawals | 10% of the annuity’s Accumulated Value; per year. |
| Death Benefit | Upon the annuitant’s death, the beneficiary can either choose (i) Accumulated Value (Lumpsum) or (ii) Minimum Guaranteed Contract Value \ *If death occurs after annuitization, payments will be consistent with the Settlement Option selected. |
| Riders | No optional riders |
| Surrender Value | Greater of Accumulated Value (less any withdrawal charges/MVA) and the Minimum Guaranteed Contract Value |
| Free Benefits | Terminal illness and confinement waivers |
The Athene Accumulator Fixed Indexed Annuity is almost identical for all three policy tenures, except for the crediting strategies and surrender charge schedule. For ease of discussion and better clarity, we will discuss the Athene Accumulator 7 Fixed Indexed Annuity (unless mentioned otherwise) for the rest of the article.
How does the Athene Accumulator Fixed Indexed Annuity policy work?
Any annuitant (maximum age at the time of policy issue: 83) can purchase the Athene Accumulator Fixed Indexed Annuity with a minimum initial purchase amount of $10,000, 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 Athene Accumulator Fixed Indexed Annuity offers the annuitant the ability to choose from one or more of the seven indexes to determine their earnings crediting formula. The S&P 500 index has 1 point-to-point strategy with a cap, and the other six indexes have 1-year and 2-year point-to-point strategies with participation rates. In addition, there’s also a fixed-rate guaranteed interest strategy to choose from (making a total of 14 strategy options). We will discuss each available index briefly:
1. S&P 500 Index
The S&P 500 index is one of the most popular and oldest indexes in the world. It tracks 500 large-cap publicly traded stocks listed in the United States. It is a reliable index and has often succeeded in the test of time. It is very important to note that the Athene Accumulator Fixed Indexed Annuity offers the S&P 500 index with caps in place, meaning that your interest-earning capacity is capped. However, it is worth noting that Athene's current cap rate is very decent compared to other annuity providers. These rates change frequently; I will discuss the rates in detail shortly. 2. S&P 500 FC IndexThis is the same S&P 500 index but with a volatility control mechanism. Because the index applies a volatility control mechanism, the range of both the positive and negative performance of the index is limited. I would not suggest going with this index as, in its true sense, this index appears similar to the S&P 500 Index, but its returns can vary greatly from the S&P 500 Index. 3. BNP Paribas Multi Asset Diversified 5 IndexThe BNP Paribas Multi Asset Diversified 5 Index is a rules-based index that seeks to measure the performance of a diverse range of asset classes comprised of eight components (three equity futures indexes, three bond futures indexes, and two commodities indexes. On a daily basis, the BNPP MAD 5 Index dynamically rebalances the weightings of the components according to a proprietary methodology that seeks to identify weights for the components that would have resulted in the Hypothetical Portfolio with the highest past returns.4. NASDAQ Fast Convergence IndexThe NASDAQ Fast Convergence Index is powered by BofA (Bank of America) and uses a proprietary technology that aims to reduce risk and increase performance by adapting faster to changing market conditions. It has a 107.95% exposure in the NASDAQ 100 TR Index (which contains 100 of the most prominent large-cap stocks). It is important to know that this index employs a performance control mechanism wherein a portion of the returns of the Nasdaq FC Index is capped at 4% for the preceding one-month period. The NASDAQ FC Index was created in January 2020 and targets a 12.5% annualized realized volatility. 5. HSBC AI-Powered US Equity IndexThe HSBC AI-Powered US Equity Index (AiPEX) is an index developed by HSBC that uses IBM Watson’s AI engine to create a risk-controlled, excess return index comprised of approximately 250 U.S. publicly traded companies, adjusted monthly, that is intended to provide growth through a variety of market conditions. The AiPEX Index was created in August 2019 and targets a 6% daily volatility.6. AI-Powered Global Opportunities IndexAI-Powered Global Opportunities Index (AiGO) is a multi-asset strategy that uses the power of IBM Watson and Equbot's proprietary Artificial Intelligence capabilities to turn data into investment insight. AiGO is designed to track a strategic combination of a diversified portfolio of ETFs (and one HSBC index) that represents global equities, fixed income, and inflation-sensitive assets in an attempt to deliver resilient market growth across different market cycles. This is a very new index that was launched in March 2023, and it targets a 7% volatility.7. UBS Innovative Balanced IndexThe UBS Innovative Balanced Index (UBSIBAL) leverages unique signals that aim to provide an early read into the U.S. macro environment and inform an all-weather tactical allocation to equities, commodities, and bonds. The signals include US inflation expectations and a Nowcast of US economic growth, generated using key datasets from UBS Evidence Lab, the largest sell-side alternative data offering of its kind. This is also a very new index and applies a volatility control mechanism.
You will notice that besides the S&P 500 index, all the indexes apply a volatility control mechanism, which limits the range of both the positive and negative performance of the index. However, to make up for this, the company offers a higher participation rate on these indexes.
Note: 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 are subject to change over time. At the time of writing, the fixed interest rate was 5.05%, which is relatively high compared to what is typically offered by similar fixed indexed annuities.
At the time of this review (Sep 2024), this was the published figure. For current rates, see Current Rates ↓.
Rates and costs
Rates, bonus, surrender charges, 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 and caps 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.
The formula to calculate the earnings credited is:
- For Strategies with Participation: (Participation Rate % X Index Return)
- For Strategies with Caps: Index return over a given crediting period, with a maximum potential of earning the cap rate
Let's take a closer look at the Athene Accumulator rate sheet to understand how earnings are calculated. Please note that these rates are current as of the time this article was edited and apply only to the Athene Accumulator 7 FIA. For the most accurate and up-to-date rates, you may contact your trusted financial advisor or visit the company's website.
The first thing to note is that we have seven indices. The S&P 500 has a 1-year point-to-point strategy with a cap rate. Besides the S&P 500, each index has two point-to-point strategies. Additionally, we have a fixed rate strategy to choose from. All in, we get to choose from a total of fourteen strategies (thirteen index-based and one fixed). As an annuitant, you can allocate your premium into multiple crediting strategies. The company displays three types of crediting strategies across these rates (Participation, Cap, and Fixed). The Participation rate (index allocation rate) and the strategy caps are the most important.
Let’s quickly go through the terminology described by Athene:
- Participation Rate (PR): The participation rate describes the annuitant’s participation percentage in the return of an index. For example, suppose the participation rate is 60%, and the index returned 10% over the agreed time. In that case, the annuitant will be eligible for only 60% of the return, i.e., 6%.
- 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%, In this situation, 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.
- Bailout Feature: If Athene lowers the declared 1-year point-to-point index strategy annual cap rate below the Bailout Cap rate, you’ll have full access to your annuity’s accumulated value - free of any charges - for up to 30 days after the contract anniversary in which the Bailout Cap Rate was pierced. After the 30-day Bailout window, all withdrawal charges and MVA will apply.
- Fixed Interest Rate: If you opt for a fixed account rate, you simply earn the fixed rate for a particular period specified by the company before your policy begins. These rates usually tend to be very low 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 5.05%.
At the time of this review (Sep 2024), this was the published figure. For current rates, see Current Rates ↓.
Out of all these indexes, I prefer the S&P 500 index and the BNP Paribas Multi Asset Diversified 5 Index the most. S&P 500, because of its global importance, higher transparency, and relatively higher cap rate, and BNP MAD, because of its decent real performance and relatively high index allocation rate (participation rate) offered by the company.
I would not choose the AI-Powered Global Opportunities Index and the UBS Innovative Balanced Index at this point because they are very new indexes, having less transparency and limited return data.
Accessing your Money
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 Athene Accumulator Fixed Indexed Annuity.
| Completed Contract Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11+ |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 5-year withdrawal charge | 8% | 8% | 7% | 6% | 5% | 0% | |||||
| 7-year withdrawal charge | 8% | 8% | 7% | 6% | 5% | 4% | 3% | 0% | |||
| 10-year withdrawal charge | 9% | 9% | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0% |
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. For a quick comparison of surrender charges across different Athene products, visit their fixed-indexed annuities product page.
The surrender charge of Athene Accumulator 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.
Riders and waivers
Riders and waivers
The Accumulator 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 Accumulator FIA has free in-built confinement and terminal illness waivers.
- Confinement 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 care facility for at least 60 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.
Contract/Administrative Charge
The Athene Accumulator Fixed Indexed Annuity levies no annual contract or administrative fees.
Carrier
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.
Athene Annuity and Life Company
Athene Annuity and Life Company has been in the business since 2009. It has been one of the largest providers of fixed and fixed indexed annuities in the US for many years and has been regularly in the top ten Fixed Indexed Annuity Sales.
It is rated as follows by the rating agencies:
| Rating Agency | Rating |
|---|---|
| AM Best | A+ (2nd of 13 ratings) |
| Fitch | A+ (5th of 19 ratings) |
| S&P | A+ (5th of 21 ratings) |
| Moody’s | A1 (5th of 21 ratings) |
Athene Annuity and Life Company has maintained decent ratings for many years. It is considered to be strong and stable financially. As of December 31, 2024, some of the financial highlights for Athene Annuity include its:
- $71 billion in gross organic inflows
- $62 billion available equity
- $31 billion of regulatory capital
- $3.2 billion in spread relating earnings
- $327 billion in total assets
Thus, going by the operating history and financial numbers, we can safely gauge that you can trust your savings with Athene Annuity and Life Company.
On January 1, 2022, Athene Holding Ltd. merged with Apollo Global Management, Inc. (NYSE: APO). Apollo is a high-growth, global alternative asset manager listed on the NYSE that serves institutional and individual investors across the risk-return spectrum in yield, hybrid, and equity strategies.
Pros
Higher Caps on the S&P 500 Index - Compared to other similar annuities, Athene offers a higher cap on the S&P 500 Index.
Option of Uncapped Strategies - Capped strategies restrict growth potential, as even a strong index is limited to the cap rate; for example, a 4% cap means you can never earn more than 4%, regardless of actual performance. The Athene Accumulator Fixed Indexed Annuity addresses this by offering uncapped strategies on indexes like the BNPP MAD 5, NASDAQ FC, and AiPEX. While participation rates still apply, they are currently offered at attractive levels, allowing for more meaningful upside participation compared to capped alternatives.
Minimum Interest Credit Guarantee -If the total interest credited to your Accumulated Value is below the Minimum Interest Credit at the end of your withdrawal charge period, the difference will automatically be added as a one-time interest credit. This credit is calculated as a percentage of your Initial Premium after accounting for withdrawals and charges.
Free Confinement and Terminal Illness Waiver
Conclusion
Conclusion
With the advancement in healthcare and technology, the average American 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 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 Athene Accumulator annuity helps you grow and accumulate your savings with much less risk. If you are considering buying a Fixed Indexed Annuity that works best for Accumulation and leaving a legacy, the Athene Accumulator FIA may be a decent product to look at. Although you must keep in mind that this is not the best annuity for someone who is looking for lifetime income payments or enhanced withdrawals.