Today’s review is on the NAC Secure Horizon Plus Fixed Index Annuity. The purpose of this review is to show you the strengths and weaknesses of this Annuity. To make an informed decision, it is important to consider all available facts.
- Product type
- Investment options that are available and their realistic long-term investment return expectations
- How it can best help your financial plan
- How it’s most poorly used as part of your financial plan
NAC Secure Horizon Plus Fixed Index Annuity Quick Facts
|Product Name||NAC Secure Horizon Plus|
|Issuer||North American Company|
|Type of Product||Index Annuity|
|S&P Best Rating||A+ “Excellent”|
Before we go into detail, here is an important legal disclosure.
This review of NAC Secure Horizon Plus Fixed Index Annuity is an independent review at the request of readers. Intended to explain my perspective 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. North American Company 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 related to your circumstances. This review is not intended to give specific advice and your adviser may know more about your circumstances to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.
Before we go into the review, some information on North American Company
The North American Company was a holding company incorporated in New Jersey on June 14, 1890, and controlled by Henry Villard, to succeed to the assets and property of the Oregon and Transcontinental Company. It owned public utilities and public transport companies and was broken up in 1946, largely to comply with the Public Utility Holding Company Act of 1935.
There are a few ways that Agents might pitch NAC Secure Horizon Plus Fixed Index Annuity
- Low fee rider
- Possibility for growth
- Principal protection
- Social Security Gap
Fees for NAC Secure Horizon Plus Fixed Index Annuity
Income Rider charge: 1.20%
How does this Annuity Work?
The NAC Secure Horizon Plus Fixed Index Annuity works similarly to other fixed index annuities, nonetheless, is designed for people who want income and are not planning for protection against inflation or capital growth.
This annuity already has an income rider attached to it, which does not give you the option to decide whether you want the income rider or not. Taking into consideration that most of the time income riders are not good, not having the option to remove it, it’s way even worst than many other variable annuities.
Below we will explain, how the income rider works, and you will decide for yourself if it is worth it or not.
Investment Options and Strategies for the NAC Secure Horizon Plus Index Annuity:
For this annuity, you can choose between 3 different investment options.
This approach allocates your premium equality across five index account strategies with different term lengths, which is maybe the best option from the investments available, however, when adding the income rider, any investment option would be kind of useless in the long term.
Greater Growth Opportunities
Benefit from longer strategy options that offer higher index exposure.
20% of your initial premium is at the end of a term each year, giving you the opportunity to credit interest annually while still benefiting from higher Participation Rates.
How do the Incomer Rider for NAC Secure Horizon Plus Fixed Index Annuity Work?
The Retirement Benefits Rider is automatically included in the product, it provides benefits that can be accessed in one of four ways based on certain conditions. Three of the benefits are electable by the Owner
and are based on the Covered Person.
This value is used as the basis for calculating the ADL Benefit, PlanGap Benefit, Enhanced Payout Benefit, and Enhanced Death Benefit. The benefit base is adjusted on each Contract anniversary during a pre-determined number of Contract years referred to as the benefit base annual net adjustment period. The Benefit Base Net Adjustment Amount is equal to 200% of the Net Interest Credit Dollar Amount.
The ADL Benefit provides a series of payments to the Owner upon disability. If the person qualifies the Benefit Base will be paid out in a series of equal periodic payments over 7 years.
The PlanGap Benefit provides a series of payments to the Owner when providing notice of a change in social security benefits. If the person qualifies the Benefit Base will be paid out in a series of equal periodic payments over 12 years. The PlanGap Benefit is available in the Income Gap Benefit Index has decreased by more than 3%.
Enhanced Payout Benefit:
The Enhanced Payout Benefit provides the Owner an enhanced annuity payout option in lieu of the base contract. The Enhanced Payout Benefit may be elected on a Contract Anniversary, following the Enhanced
Payout Benefit Waiting Period:
The Enhanced Payout Benefit Waiting Period ranges from 15-20 years, based on issue age. When selecting the Enhanced Payout Benefit.
Enhanced death benefit:
Upon Death, your Beneficiary will have the option to receive the Benefit Base, subject to the Rider Death Benefit maximum as listed in your Contract, paid out over five equal annual payments. The enhanced death benefit partial term adjustment amount is equal to 200% multiplied by the dollar amount of interest determined in the following manner. For the fixed account, actual interest is credited since the most recent anniversary to the date of death. For each index account strategy, the portion of the index term elapsed as of the date of death multiplied by the dollar amount of interest that would apply in using the date of death as the term end date. Upon the election of the Enhanced death benefit, no other benefits are available under this rider or the base Contract including cash surrender value or death benefit.
Remember when selecting one of these riders, no other benefits are available including cash surrender value or death benefit.
Where does it work best:
- For those looking for capital appreciation
- For those looking to
- For those to keep up with inflation and not grow their money
Where does it least work:
- People who need liquidity
- Growth Potential
- For people looking to grow their money
Summary of the NAC Secure Horizon Plus Fixed Index Annuity
After reviewing this annuity, we can conclude that from all income annuities that we’ve reviewed this is one of the worst ones, not only for the fact that you don’t have the option of whether to select or not the income rider, but also the high surrender charges and only 7% withdrawal fee. Fixed Income Annuities should act as a way to protect a part of your portfolio against any market downturn and sometimes even inflation but when they are used as a way to generate income for you, the benefits of having an annuity are eliminated since it will deplete all your capital just for the “Guaranteed” income that most likely is not going to keep with inflation and probably will decrease in case you withdraw part of your money.
Annuities are complex insurance products that can help keep a portion of your assets protected, however, many of the annuities in the market come with characteristics that are not necessary for your situation and most often are designed to benefit the insurance company and the agent, this is why you should consult about your situation with a Certified Financial Planner that can get all your numbers right and give you an objective opinion of what is right for you in your situation.