- Annuity Companies
Top 10 Fixed Index Annuity Companies
Fixed Index Annuities have increased in popularity over the last five years resulting in many more insurance top rated annuity companies entering the market. In this article, we’ll list the top ten best-fixed index annuity companies based on total sales in 2019.
So without further ado let’s get started.
The 10 Best Fixed Index Annuity Companies
Best Fixed Index Annuity Companies by the Numbers
Each year the Secure Retirement Institute publishes total U.S. Individual Annuity Sales and breaks out the results for the top 20 Annuity Companies. In addition to overall annuity sales, they also break out the results by types of annuities including fixed, indexed, and top variable annuity companies as well.
In 2019 total U.S. Individual Annuity Sales were $73,500,000,000 and the top 20 annuity companies accounted for $64,555,688,000 of it, or 88%.
One interesting note is that all of the top 10 indexed annuity companies in 2019 are top-rated annuity companies with at least an A AM Best Rating; except for American Equity which is rated A-. On the contrary, the majority of the best-fixed annuity companies in 2019 were lesser rated insurers.
2019 U.S. Individual Fixed Index Annuity Sales
The table below lists the top 10 fixed index annuity companies in order by the dollar amount of individual U.S. fixed index annuity sales in thousands. So for instance, Allianz Life’s total fixed index annuity sales were $8.36 Billion in 2019.
| Rank | Company name | Indexed |
|---|---|---|
| 1 | Allianz Life | $8,358,718 |
| 2 | Athene | $6,122,393 |
| 3 | AIG Companies | $6,026,956 |
| 4 | Nationwide | $5,455,800 |
| 5 | American Equity | $4,705,319 |
| 6 | Lincoln Financial | $4,122,282 |
| 7 | Jackson | $3,738,838 |
| 8 | Global Atlantic | $3,607,134 |
| 9 | Pacific Life | $3,321,109 |
| 10 | Great American | $3,142,476 |
Source: Secure Retirement Institute* U.S. Individual Annuities Sales Survey
10 Best Fixed Index Annuity Companies
#1. Allianz Life of North America
| Allianz Life | Rating |
|---|---|
| 5701 Golden Hills Dr., Minneapolis, MN 55416 | |
| A.M. Best Rating | A+ |
| Moody's (21 rankings) | A1 (5) |
| Comdex (percentile of all rated companies) | 94 |
| Standard & Poor's (20 Possible Ratings) | AA (3) |
#1 Selling Annuity: Allianz 222
#2. Athene Annuity and Life Insurance Company
| Athene Financial Ratings | Rating |
|---|---|
| 7700 Mills Civic Parkway, West Des Moines, IA 50266 | |
| A.M. Best Rating (15 possible ratings) | A (3) |
| Fitch Ratings (21 possible) | A (6) |
| Comdex (percentile of all rating companies) | 78 |
| Standard & Poor's (20 possible ratings) | A (6) |
#1 Annuity: Performance Elite
#3. AIG Companies
| American General Life Insurance Company | Rating |
|---|---|
| A.M. Best Company (Best's Ratings, 15 Ratings) | A (3) |
| Moody's (Financial Strength, 21 Ratings) | A2 (6) |
| Standard & Poor's (Financial Strength, 20 Ratings) | A+ (5) |
| Fitch Ratings (Financial Strength, 21 Ratings) | A+ (5) |
| Weiss (Safety Rating, 16 Ratings) | B (5) |
| Comdex Ranking (Percentile in Rated Companies) | 82 |
#1 Annuity: AIG Power Protector
#4. Nationwide Life & Annuity Company
| Nationwide Life & Annuity Company | Rating |
|---|---|
| One Nationwide Plaza, Columbus, OH 43215 | |
| A.M. Best Rating (15 possible ratings) | A+ (2) |
| Moody's (21 possible ratings) | A1 (5) |
| Standard & Poor's (Financial Strength, 20 Ratings) | A+ (5) |
| Comdex (percentile of all rating companies) | 90 |
#1 Annuity: Nationwide New Heights
#5. American Equity Life Insurance Company
| American Equity | Rating |
|---|---|
| 6000 Westown Pkwy, West Des Moines, IA 50266 | |
| A.M. Best Rating (15 possible ratings) | A- (4) |
| Fitch (21 possible ratings) | A- (7) |
| Standard & Poor's (Financial Strength, 20 Ratings) | A- (7) |
| Comdex (percentile of all rating companies) | 60 |
#1 Annuity: AssetShield Annuity
#6. Lincoln Financial Group
| Lincoln Financial Group | Rating |
|---|---|
| 1300 South Clinton St., Fort Wayne, IN 46802 | |
| A.M. Best Rating (15 possible ratings) | A+ (2) |
| Moody's (21 possible ratings) | A1 (5) |
| Fitch (21 possible ratings) | A+ (5) |
| Standard & Poor's (Financial Strength, 20 Ratings) | AA- (4) |
| Comdex (percentile of all rating companies) | 90 |
#1 Annuity: Lincoln OptiBlend
#7. Jackson National Life Insurance Company
| Jackson National Life Insurance Company | Rating |
|---|---|
| 1 Corporate Way, Lansing, MI 48951 | |
| A.M. Best Rating (15 possible ratings) | A (3) |
| Moody's (21 possible ratings) | A1 (5) |
| Fitch (21 possible ratings) | A+ (5) |
| Standard & Poor's (Financial Strength, 20 Ratings) | A+ (5) |
| Comdex (percentile of all rating companies) | 84 |
#1 Annuity: Jackson National MarketProtector Annuity
#8. Global Atlantic Financial Group
| Global Atlantic Financial Group | Rating |
|---|---|
| A.M. Best Rating (15 possible ratings) | A (3) |
| Moody's (21 possible ratings) | A3 (7) |
| Fitch (21 possible ratings) | A (6) |
| Standard & Poor's (Financial Strength, 20 Ratings) | A- (7) |
| Comdex (percentile of all rating companies) | 75 |
#1 Annuity: Global Atlantic 150+SE
#9. Pacific Life Insurance Company
| Pacific Life Insurance Company | Rating |
|---|---|
| 700 Newport Center Dr, Newport Beach, CA 92660 | |
| A.M. Best Rating (15 possible ratings) | A+ (2) |
| Moody's (21 possible ratings) | A1 (5) |
| Fitch (21 possible ratings) | AA- (4) |
| Standard & Poor's (Financial Strength, 20 Ratings) | AA- (4) |
| Comdex (percentile of all rating companies) | 93 |
#1 Annuity: Pacific Index Edge
#10. Great American Life Insurance Company (GALIC)
| Great American Insurance Group | Rating |
|---|---|
| 301 E Fourth St., Cincinnati, OH 45202 | |
| A.M. Best Rating (15 possible ratings) | A (3) |
| Moody's (21 possible ratings) | A2 (6) |
| Standard & Poor's (20 possible ratings) | A+ (5) |
| Comdex (percentile of all rated companies) | 82 |
#1 Annuity: Great American Legend 7
Top Fixed Index Annuity Companies
| 2019 Rank | 2018 Rank | 2017 Rank | 2016 Rank | |
|---|---|---|---|---|
| Allianz | 1 | 1 | 1 | 1 |
| Athene | 2 | 2 | 2 | 3 |
| AIG | 3 | 4 | 4 | 5 |
| Nationwide | 4 | 3 | 3 | 7 |
| American Equity | 5 | 6 | 6 | 2 |
While I realize making a blanket statement that the insurers with the most fixed index annuity sales are the best index annuity companies; in this case, it is my belief the numbers don’t lie. At least for the top four out of five spots.
While the best annuity for you will be determined by your individual situation and goals; generally speaking, Allianz, Athene and AIG are the best fixed index annuity companies.
Best Fixed Index Annuity Rates 2020
The below table lists the best-fixed index annuity rates available at My Annuity Store, Inc.’s online annuity marketplace as of February 5th, 2021. This list of best fixed index annuity rates is based on the highest S&P 500 annual point-to-point with a cap crediting strategy. There are many other indexes and crediting options available, too many to list them here in a single table. If you’d like to compare rates for other crediting methods and market indexes you can do so at our online annuity marketplace.
| Insurer | Annuity | Rating | Cap | Term | Details | |
|---|---|---|---|---|---|---|
| American National Insurance | Strategy Indexed Annuity PLUS 10 | A | 5.00% | 10 | Brochure |
|
| American National Insurance | Strategy Indexed Annuity PLUS 7 | A | 4.85% | 7 | Brochure |
| Atlantic Coast Life | Accumulation Protector Plus | B++ | 4.80% | 10 | Brochure |
| The Standard | Index Select 10 | A | 4.75% | 10 | Brochure |
|
| The Standard | Index Select Annuity 7 | A | 4.55% | 7 yrs | Brochure |
| Oxford Life | Select Series 10 | A- | 4.50% | 10 | Brochure |
| Guaranty Income Life | WealthChoice 5 | B++ | 4.50% | 5 | Brochure |
| American General (AIG) | Power 10 Protector | A | 4.50% | 10 | Brochure |
|
| Oxford Life | Select 7 | A- | 4.45% | 7 | Brochure |
|
| American General Life Insurance | Power 7 Protector | A | 4.40% | 7 yrs | Brochure |
| Athene Annuity | Accumulator 7 | A | 4.30% | 7 | Brochure |
|
| Guaranty Income Life | WealthChoice 10 | B++ | 4.25% | 10 | Brochure |
| Allianz Life | Core Income 7 | A+ | 4.25% | 7 | Brochure |
| Guggenheim Life and Annuity | Highlander 7 | B++ | 4.25% | 7 | Brochure |
| Great American Life Insurance | American Legend 7 | A+ | 4.15% | 7 yrs | Brochure |
|
| Athene Annuity | Accumulator 10 | A | 4.00% | 10 | Brochure |
What is a Fixed Index Annuity?
Now that you’ve read about the best-fixed index annuity companies you may be wondering, “exactly what is a fixed index annuity?”
A fixed index annuity is a type of deferred annuity that offers upside potential when the market performs and downside protection from a potential market downturn. Rather than guarantee an annual interest rate like a fixed annuity (“CD-Type Annuity”), an indexed annuity credits interest based on the performance of an external market index (such as the S&P 500 ).
NOTE: You may also hear fixed index annuities referred to as:
- FIA
- Equity Indexed Annuity
- EIA
- Hybrid Annuity
- Indexed Annuity
Fixed Index Annuities have less risk than a variable annuity because you can’t lose value due to poor market performance. However, they have more risk than a fixed annuity because they come with a guaranteed interest rate; indexed annuities only guarantee the worst you can do in any given year is earn zero percent.
The below chart illustrates where a fixed index annuity falls between a fixed annuity and variable annuity as well as other investment vehicles on the investment continuum. Indexed annuities have increased in popularity largely because they offer the most growth potential of any investment that provides principal protection.
Fixed Index Annuity vs. Variable Annuity
The line graph below compares the sales of variable annuities (VA) and fixed index annuities (FIA) in the United States from 2006 to 2020. Variable annuities are represented by the blue line while the red line represents indexed annuity sales.
As you can see, variable annuities have decreased in popularity significantly while fixed index annuities are becoming increasingly popular. VA sales decreased from approximately $185 Billion in 2006 to ~$100 Billion in 2020 while FIA sales increased from ~$75 Billion to ~$120 Billion during the same timeframe.
2016 marked the first year that individual fixed index annuity sales surpassed variable annuity sales in the United States.
How do Fixed Index Annuities Work?
At each annual contract anniversary, the performance of the market index you’ve selected is measured. If the index performs (increases in value) you get a percentage of the growth. The amount of the index performance your FIA is credited to is determined by the crediting method you’ve selected. There are a couple of different index annuity crediting methods but Annual Point to Point is by far the most common so for time’s sake that’s the one we’ll focus on here.
Annual Point-to-Point Index Annuity Crediting Method
Calculating index performance using the annual point-to-point method:
- The index value from the beginning of the crediting period is subtracted from the value of the index at the end of the crediting period.
- The percentage of change is calculated.
- If the value at the end of the year is higher than the beginning of the year crediting component is applied to determine your interest.
Fixed Index Annuity Example:
- 107,000(ending value) minus 100,000(beginning value) = 7,000 positive change in index value.
7,000 (index value change) divided by 100,000(beginning index value) = 7% index performance. - A crediting component, or limiting factor, is then applied to the index performance to determine your credited interest rate for the year.
The 3 Index Annuity Crediting Methods:
Spread – The index performance minus the spread.
Cap – 100% of the index performance up to the cap.
Participation Rate – The index performance multiplied by the participation rate.
Assuming a 5.00% cap, 2.00% spread and a 75% participation rate let us calculate the amount of annual interest a fixed index annuity would be credited using the 7% index performance in our example above.
Cap = 5% Interest credited (100% of index performance up to the cap)
Spread = 5% Interest credited (index performance minus the spread)
Participation Rate = 5.25% Interest Credited (index performance multiplied by the participation rate)
Best Uncapped Fixed Index Annuities
Allianz, AIG, and Athene have all been innovators in the indexed annuity space and I would attribute much of their success to that fact. Specifically, they all have uncapped crediting strategies and offer proprietary volatility managed indexes.
Traditionally, fixed index annuities only offered annual point to point with a cap as an interest crediting strategy. In recent years, the top annuity companies have begun to offer un-capped crediting strategies using a spread or participation rate. This has become possible because of volatility managed indexes. Unlike a static index such as the S&P 500 or the Russell 2000, the volatility managed index dynamically allocates between equities and fixed income based on volatility.
The ability to manage volatility inside of these indexes smooths out returns and lowers the costs of the options that annuity companies must purchase to back the indexed annuities they issue. A lower option cost enables them to purchase more options and in return, offer more upside to their policyholders.
Best Market Indexes in a Fixed Index Annuity
I believe Allianz’s Bloomberg Universal Dynamic Index II, AIG’s Merrill Lynch Strategic Balanced Index, and Athene’s AiPex Dynamic Allocation Index are among the best un-capped index annuity options available today.
Annuity reviews for Allianz, Athene, and AIG products, as well as many others, can be found on our Annuity Reviews page. If you have questions or comments our phone number and email address can be found directly below as well as a contact form that you can use to message us directly.
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Frequently Asked Fixed Index Annuity Questions
You may reallocate available funds at the end of each crediting period on your contract anniversary. You have 30 days to submit a re-allocation form - if you do not, your allocations will remain the same as the previous year.
It is important to note that a fixed index annuity is an insurance contract issued by an insurance company and is not a security. As such, they will not generate equity-like returns. They are a good retirement savings vehicle that provides a safe and steady way to grow your retirement savings.
Fixed Index Annuities do not have any fees in general; however, there are optional income riders, long term care riders, and death benefit riders that can be added to an index annuity for a fee.
You can not lose money in an indexed annuity due to a potential market downturn. However, indexed annuities do have surrender penalties if you withdraw your money prior to the end of your contract. In addition, withdrawals prior to age 59 1/2 may be subject to a 10% IRS tax penalty.
Gains are limited by a crediting method or "limiting factor", index annuity contracts can be complex, contracts vary greatly from insurance company to company, highly customizable, surrender penalties for withdrawals above the annual free withdrawal provision, pre 591/2 tax penalties, and crediting factors can change on the contract anniversary date.
An Uncapped Fixed Index Annuity refers to an indexed annuity with a crediting method that does not cap the interest your account can be credited in any given year. Instead of a cap, uncapped options use a spread or participation rate crediting method.
