Today’s review is on the SILAC Denali 10 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
SILAC Denali 10 Fixed Index Annuity Quick Facts
|Product Name||Denali 10 Fixed Index Annuity|
|Type of Product||Index Annuity|
|AM Best Rating||B++ “Good”|
+1 (800) 352-5150
Before we go into detail, here is an important legal disclosure.
This review of SILAC Denali 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. Equitable 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 SILAC
As Utah’s oldest active life insurer. SILAC, Inc. purchased SILAC™ in April 2017, bringing both access to capital and strong, experienced leadership. SILAC™ is licensed in 46 states and the District of Columbia.
Throughout its 80+ year history, SILAC™ has been a pioneer in emerging markets. In 1965, Medicare Supplement Insurance was developed, followed by SILAC™ beginning to develop and market other supplemental health products in 1974. This tradition continues with the introduction of Fixed Annuities in 2018 and Fixed Index Annuities in 2019.
There are a few ways that Agents might pitch Silac Denali
- 0% income rider fee
- Possibility for growth
- Principal protection
Fees for SILAC Denali 10 :
Annuities are a long-term commitment, make sure you feel comfortable with committing your money for this period. For the SILAC Denali 10 Fixed Index Annuity you surrender schedule is 10 years as shown in the table above, with high surrender fees in case you decide to take your money out.
One of the disadvantages of this annuity is that you are allowed to withdraw up to 5% of your account value after the first policy year, which is most annuity is 10%.
You can also withdraw 100% of the annuity account value if diagnosed with a terminal illness or is confined to a qualified care facility. In the case of home health care services, you are eligible to withdraw 20% of the annuity account value for five years without a penalty.
How does this Annuity Work?
The SILAC Denali 10 Index Annuity is linked to one or more indexes, and the returns are commonly limited by a cap, a spread, or participation rate depending on the investment option that you choose at the beginning of the contract.
Also, it will protect your principal against any market downturn and will provide you with a premium bonus by the time your purchase the annuity contract.
This annuity has an income rider that will provide you with money for the rest of your life without any fees attached to it. This is a rare characteristic of this annuity because almost all income riders come with a fee.
SILAC Denali 10 Fixed Index Annuity only allows you to withdraw 5% annually after the first year of the contract which seems bad at first glance, however, they also offer a bonus recovery that will apply to any withdrawal to which a withdrawal charge applies. The bonus recovery schedule is a percentage of the annuity’s bonus. The bonus is equal to the account value less any premiums and includes interest credits. Bonus recovery percentages decline with time, meaning that less of the bonus is recovered over the annuity’s withdrawal charge period. It does not apply after the withdrawal charge period ends. The bonus recovery allows us to credit higher interest than would have been possible otherwise and offer a lifetime withdrawal benefit.
Investment Options and Strategies for the SILAC Denali 10 Fixed Index Annuity:
- S&P 500
- Barclays Atlas 5.
- Credit Suisse RavenPack AI Index
This annuity offers different types of investment options that are available for you to choose from. The crediting strategies are used to determine how much interest, if any, will be credited to your annuity. You can allocate your funds among one or more of the available crediting strategies. You can reallocate at the end of each crediting strategy term.
To review more about the investment options you can see SILAC Denali 10 Fixed Index Annuity investment options here.
How does the Incomer Rider for SILAC Denali 10 Fixed Index Annuity Work?
SILAC Denali 10 Fixed Index Annuity offers you a lifetime withdrawal rider for a 0% fee. The only problem with this income rider is that you will withdraw your own money from the account until your cash value is totally depleted. If you are looking to grow your money this is not a good strategy to have, the best-case scenario would be if you are looking for lifetime income, but you need to have in mind that it’s going to take about 20 years for you to get your own money with this rider.
For further explanation on guaranteed rates and income payments, please refer to the brochure.
How does the Market-Value Adjustment Work?
- A market value adjustment is basically an additional charge or credit for taking money out early from an annuity.
- They allow companies to pay a higher rate and make longer-term investments.
- MVA’s only affect you if you withdraw funds early. If you own the contract to maturity, they do not apply.
Where does it work best:
- The opportunity for more index-linked growth
- More flexibility than a Fixed Indexed Annuity
- Principal Protection
- For those looking for low lifetime income
Where does it least work:
- People who need liquidity
- For Individuals looking for a high legacy for their heirs.
- For people looking to grow their money
Summary of the SILAC Denali Fixed Index Annuity
After reviewing SILAC Denali Fixed Index Annuity, we can say that it is really a low fee annuity, that is linked to an index, it has a low potential for capital appreciation due to the lifetime withdrawal rider that will only be good to deplete your money year by year just with the “assurance” that you’d have lifetime income, however, after seeing inflation rates the last couple of years, that money that you’d receive will have less purchasing power every year.
It is important to see all the scenarios possible for your retirement, we are not saying that this is a bad annuity but is very probable that is not right for you, that’s why we encourage you to consult with a Certified Financial Planner that can run the numbers for you and create different scenarios for you to better understand where your money has the most probabilities to perform better in the future. Remember that the numbers never lie and creating a retirement income analysis is the best way to assess your future and retire with peace of mind.