This review is meant to show you the strengths and weaknesses of the Jackson National Elite Access II Annuity. Today I’ll walk you through my analysis, in this article we’ll cover important details on how this annuity works, so you know what to expect from it.
- Product Type
- Investment options that are available and their realistic long-term investment return expectations
- How it can best help you as part of your financial plan
- How it’s poorly used as part of your financial plan
Jackson National Elite Accesss II Quick Facts
|Product Name||Elite Access II Variable Annuity|
|Issuer||Jackson National Life|
|Type of Product||Variable Annuity|
|Standard & Poor’s Rating||“AA” (Very Strong)|
There are a few ways that Agents might pitch this product
- Creates Lasting Legacy
- Death Benefit after income distributions
- Investment Flexibility
Is any of this true?
This Variable Annuity has quite good aspects when comparing it to other similar products in the marketplace. One of those aspects is for instance that it does not have such a high fee like most variable annuities, however, some agents may say the death benefit has no cost, but first, you have to understand that only the based death benefit is free, there are some riders and fees that they may want you to buy, and it is up to you and your current situation to decide whether it’s worth it or not.
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Before we go into detail, here is an important disclosure
Jackson National Elite Access Variable Annuity is meant to be an independent review at the request of readers, in addition, so they could see my perspective as a Certified Financial Planner CFP®, Designee when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. Jackson National has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product, be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions, as they relate to your individual circumstances. This is not specific advice. Your advisor may know more about your circumstance to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.
Information on Jackson National
Jackson National Life Insurance Company® (Jackson®) first opened for business in 1961 as a small family-owned company. They have evolved over the years into a successful multi-billion-dollar organization, have lived by the mantra that no matter where the journey takes them, they will never forget where they came from. By combining the responsiveness and personal attention of a family business with the resources and strength of a large corporation, they are able to provide a unique experience to customers and partners.
Elite Access II Fee Breakdown
|Account Fee||$50 (wave is the contract value is over 50k)|
|Core Contract Charge||1.00%|
|Funds Fees||0.53 – 2.41%|
|Return Of Premium of Death Benefit Rider||0.20-0.40% (0.20% is the current fee)|
|Liquidity Option Rider||0.25%|
|Total||Aprox. Current Fees = 2.00% + $50 per year|
As you can see this annuity has fees that you have to be aware of, and remember that any returns this annuity gives you, the fees are going to have to be subtracted from the total return by the end of the year.
The approx. fee for this annuity is 2.00% as you can see above, although it can be less or more depending on what types of investment you choose for your annuity.
This annuity also have surrender fees:
Nonetheless, this Elite Access II has a Rider that can help you wave these surrender charges, that rider is called “Liquidity Option”, and it allows you to liquidate your annuity any year of your contract without having to pay any surrender charge. As it is shown above the fee for this rider is 0.25% annually, so if you take this option you have to be aware that this fee is going to affect your returns.
The Return of Premium Guaranteed Minimum Death Benefit Rider
Well, this rider might be one of the good aspects of this annuity, because if you buy it, it gives you protection against financial loss in the event death occurs in a time where the account value has incurred losses due to negative market returns.
For example, if the annuitant dies at the accumulation phase with contract value down, this rider will allow the beneficiary to receive the same amount of the premiums paid for the annuity. Let’s say John buys $100,000 of this variable annuity and dies at year 4 of the contract, and the contract value had gone down to $80,000 in that year. In the case John bought this rider, then his beneficiary will receive the $100,000 which is the amount of premiums paid by him at the beginning of the contract.
However, it is very important to clarify that any withdrawal on the annuity will be reflected in the amount paid to the beneficiaries. Let’s take the same example, if John had withdrawn $10,000 from his annuity, the withdrawal will reduce the premium to $87,500. This amount is calculated using the following formula $100,0000 – ($100,000 x $10,000/$80,000) = $87,500 would be the death benefit.
This annuity has more than 120 funds that you can choose from, this gives great flexibility to your investments, but as we saw above all these funds come with fees attached to them. Among the types of investments this annuity has, you can pick from Equity, Fixed Income, Alternatives funds, and even manage accounts. This annuity also allows you to re-balance your portfolio 25 times a year for free.
Where it works Best:
- Enhanced Death Benefit
- Investment Flexibility
- For those looking for tax deferral
- Clear fee structure
Where it works Worst:
- Those who need liquidity
- Those who need principal protection
AnnuityEdu’s Summary on the Jackson National Elite Access II Variable Annuity
After reviewing Jackson National Elite Access II Variable Annuity, there are not really many bad things to say about it. However, you have to be aware of the current market situation, as the FED keeps printing more money and creating a hyperinflation, is only a matter of time for an economic collapse and maybe you should be thinking about how to protect your money in other types safe of investments like Gold (see article here).
Remember that this annuity does not give you principal protection so in case the market goes down, the returns of this product are going to go down as well, and if you are expecting to take income from this annuity, this situation will be the worst-case scenario for your retirement.
Before making any incautious decision it’s very important for you to consult with a Certified Financial Planner that can run the numbers for you and get an objective view, with different scenarios, on how to allocate your money into a well-diversified portfolio.