How it works
EquiTrust MarketValue Fixed Indexed Annuity: product description and policy
The EquiTrust MarketValue is a Fixed Indexed Annuity (FIA) plan that offers the annuitant (annuity investor) the opportunity to earn a portion of market-indexed return without incurring the risk of market downside. This is a suitable plan for individuals seeking a simple, fixed-indexed annuity that offers tax-deferred growth and downside protection, with a core focus on accumulation.
Let’s have a look at the high-level fine print of the EquiTrust MarketValue Fixed Indexed Annuity, and then we will discuss each point in detail.
How does the EquiTrust MarketValue Fixed Indexed Annuity policy work?
Any annuitant (maximum age at the time of policy issue: 85) can purchase the EquiTrust MarketValue 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, various events may trigger earnings credit: free withdrawals, long-term care events, terminal illness or injury events, or when a death benefit is payable.
The EquiTrust MarketValue Fixed Indexed Annuity allows the annuitant to choose from one or more of the four indexes (S&P 500 Index, S&P 500 Dynamic Intraday TCA Index, Barclays Focus50 Index, and S&P MARC 5% Excess Return Index) to determine their earnings crediting formula. The S&P 500 index has 6 crediting strategies; S&P 500 Dynamic Intraday TCA has 2, and the other two indexes have 1 strategy each. The plan also offers a fixed-rate guaranteed interest strategy, bringing the total to 11. We will discuss each available index briefly:
1. S&P 500 IndexThe 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, similar to most other annuities, the EquiTrust MarketValue Fixed Indexed Annuity offers the S&P 500 index with cap rates, participation rates, and performance-trigger rates in place, meaning that your actual interest credited will be lower compared to the actual index return. These rates change frequently; I will discuss the rates in detail shortly.2. S&P 500 Dynamic Intraday TCA IndexThe S&P 500 Dynamic Intraday TCA Index is a financial index designed to provide exposure to the S&P 500 through the use of E-mini S&P 500 futures. This index employs a dynamic approach, utilizing 13 observation windows throughout the trading day to adapt to changing market conditions. By doing so, it aims to offer a more stable volatility experience for investors. The index combines a trend-following mechanism with the capability to rebalance multiple times during the day, allowing it to respond swiftly to market movements and optimize performance.3. Barclays Focus50 IndexThe Barclays Focus50 Index is a rules-based equity index that selects and tracks a portfolio of 50 large-cap U.S. companies from the S&P 500. It is designed to focus on factors such as growth, quality, and stability, which are believed to contribute to long-term outperformance. The index's strategy combines these equities with U.S. Treasury bonds, creating a dynamic mix that seeks to balance growth opportunities with risk management. By employing this approach, the Barclays Focus50 Index aims to offer investors a potentially more stable investment option in the U.S. stock market. However, it is important to note that although this approach aims to protect against market downturns, it also limits the index upside.4. S&P MARC 5% Excess Return IndexThe S&P MARC 5% Excess Return Index is a multi-asset index designed to provide diversification within a risk-weighted framework. It tracks three underlying component indices representing equities (S&P 500), commodities (S&P GSCI Gold), and fixed income (S&P 10-Year U.S. Treasury Note futures). The index dynamically rebalances among these asset classes and cash to target a 5% volatility level. This approach aims to protect against market downturns but also limits the index upside.
Note: In addition to allocating funds to the following indexes, the annuitant may also allocate funds at a fixed interest rate. These Fixed Rates change from time to time. However, these rates are subject to change frequently, so you should check with your trusted financial advisor for the latest rates.
For current rates, see Current Rates ↑.
Rates and costs
Rates, bonus, surrender charges, and costs
The Earnings Crediting Formula
It is very important to note that, like other Fixed Indexed Annuities, the EquiTrust MarketValue Fixed Indexed Annuity comes with rate-limiting mechanisms (such as cap rates, participation rates, etc., for these indexes), meaning that you will be credited only a part of the index return to your annuity. These rates tend to change over time, and the updated rates can always be checked on the company’s website.
Let’s take a closer look at the various terms the company uses in the EquiTrust MarketValue Fixed Indexed Annuity rate chart:
Cap Rate
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.
Cap Rate simulator
Shows how a cap limits the credited return when the index year is higher than the selected cap.
8%
Formula
min(10%, 8%) = 8%
This is a one-year teaching example only. Actual contract credits depend on the index, strategy term, allocation, renewal rates, state rules, and carrier contract language.
Participation Rate
The participation rate describes the annuitant’s participation percentage in the 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%.
Participation Rate simulator
Shows how the contract credits a percentage of a positive index return.
5%
Formula
10% x 50% = 5%
This is a one-year teaching example only. Actual contract credits depend on the index, strategy term, allocation, renewal rates, state rules, and carrier contract language.
One-Year Monthly Index Average with Par Rate
This strategy begins by recording the initial value of a selected index at the onset of the contract term. Subsequently, the index's value is captured monthly. After a one-year duration, these monthly index values are aggregated and then averaged by dividing the total by 12. This average, multiplied by a participation rate, helps decide the interest added to the annuity.
Performance Trigger Rate
Index Option with Declared Rate: 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.
Performance Trigger Rate simulator
Shows how a flat or positive index year can credit the declared trigger rate.
6%
Trigger activates
Formula
10% is flat or positive, so the trigger credits 6%
This is a one-year teaching example only. Actual contract credits depend on the index, strategy term, allocation, renewal rates, state rules, and carrier contract language.
Fixed Account 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 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.
I avoid other S&P 500 strategies because the company offers a low participation rate for the S&P 500 Index.
You will notice that this annuity offers higher caps, participation, and performance-triggered rates compared to other "bonus" annuities, such as the EquiTrust MarketTen Bonus and EquiTrust MarketPower Bonus annuities. This is because those annuities provide an upfront bonus, which results in slightly reduced future growth potential by offering lower caps or participation rates in exchange for the initial bonus. Essentially, it's a trade-off: with bonus annuities, you receive an immediate boost to your premium, but the long-term growth potential may be more limited compared to non-bonus options.
Ultimately, the choice depends on your priorities—whether you prefer the immediate benefit of an upfront bonus or the potential for higher growth over time. It's up to you to decide which approach aligns better with your financial goals and risk tolerance.
Accessing your Money
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 EquiTrust MarketValue 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. I find the surrender charges of EquiTrust MarketValue Fixed Indexed Annuity to be slightly higher than those of other annuity issuers.
Once the surrender charge period ends, you can typically access your full contract value without fees.
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 offer flexibility in balancing lifetime income needs with legacy goals, enabling you to tailor how and when funds are accessed during retirement.
Death Benefit
Upon the annuitant’s death, the beneficiary will get the greater of (i) Account Value or (ii) Surrender Value
Riders and waivers
Riders and 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 75% of the contract’s accumulated value if he is diagnosed with a terminal illness. 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.
Besides the Nursing Home Waiver and the Terminal Illness Waiver, the company also offers a Guaranteed Accumulation Value Benefit (GAVB) provision.
Guaranteed Accumulation Value Benefit - The Guaranteed Accumulation Value Benefit provision ensures that the account value of your annuity will be no less than 110% of the initial premium, adjusted for any withdrawals, upon reaching the 10-year milestone.
Suppose you invest an initial premium of $100,000 in an annuity product that offers a Guaranteed Accumulation Value Benefit feature. Over the course of 10 years, you make withdrawals totaling $20,000.
Initial Premium: $100,000
Total Withdrawals: $20,000
Net Account Value (Initial Premium - Withdrawals): $80,000
The GAVB feature guarantees that your account value will be at least 110% of the initial premium, less any withdrawals, at the 10th anniversary.
GAVB Calculation:
1. Without Withdrawals - 110% of Initial Premium = 1.1 * $100,000 = $110,000
2. Adjusted for Withdrawals: ($100,000 - $20,000) * 110% = $88,000
Therefore, at the end of the 10-year period, the GAVB ensures that your account value will not fall below $88,000, regardless of market conditions or investment performance.
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.
EquiTrust Life Insurance Company
EquiTrust Life Insurance Company, established in 1996, is a national provider of annuity and life insurance products. Known for its niche offerings, EquiTrust specializes in fixed-indexed annuities and single-premium life insurance products. The company has developed a strong reputation, particularly among retirees, due to its focus on wealth transfer solutions and income annuities.
The company was acquired by Guggenheim Partners in 2011, which further strengthened its investment management capabilities. Despite its relatively small size in the industry, EquiTrust has consistently been recognized for its financial stability, having been listed in the Ward’s Top 50 life and health insurance companies for several years.
EquiTrust serves customers nationwide through independent agents and independent marketing organizations (IMOs), focusing primarily on providing income solutions and helping individuals secure their financial future through tax-deferred growth options.
It is rated as follows by the rating agencies:
| Rating Agency | Rating |
|---|---|
| AM Best | B++ |
| S&P | A- |
| Fitch Ratings | A- |
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. As of year-end 2024, some of the financial highlights for EquiTrust Life Insurance Company include its:
- $2.4 billion of capital and surplus
- $33.6 billion in total assets
- 96% of assets invested in Investment-Grade portfolio
Going by the operating history, financial numbers, and ratings, we can safely gauge that you can trust your savings with EquiTrust Life Insurance Company.
Pros
The plan offers the S&P Index with decent indexing options
Higher Cap, Participation, and Performance-triggered rates
Free Guaranteed Accumulation Value Benefit Provision
Free Confinement and Terminal Illness Waiver Benefit
This no-fee rider is automatically included for owners under age 60 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.
Confirm before buying
Surrender charges are higher when compared to similar annuities.
Conclusion
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 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 EquiTrust MarketValue FIA is a decent annuity that helps you grow your retirement account with less risk. With relatively higher caps, participation rates, and performance-triggered crediting options, it has the potential to deliver stronger growth compared to many other fixed indexed annuities. Its straightforward structure, without additional paid riders, will appeal to investors who prefer simplicity and do not wish to deal with the complexity often associated with optional riders. However, the company’s B++ AM Best rating may be a consideration for those who prioritize insurers with higher financial strength ratings. As such, this product may be better suited for investors who place greater emphasis on crediting potential and product simplicity than on insurer ratings alone.