The American Equity IncomeShield 10 is a fixed index annuity designed around one core promise: guaranteed income you can’t outlive. It comes with a built-in Lifetime Income Benefit Rider (LIBR) at no extra cost to activate, the 1.20% annual fee is part of the product from day one. Based on a March 2026 illustration and the official product brochure, this review breaks down exactly how the income rider works, what the historical performance looks like across best and worst periods, and what fine-print riders you need to understand before signing.
What’s In This Review
- Quick Facts & AM Best Rating
- The Lifetime Income Benefit Rider, How the 10% Rollup Works
- Guaranteed Income by Start Year, Real Numbers
- The Wellbeing Benefit, What Happens If You Get Sick
- Surrender Schedule & Free Withdrawals
- Index Options & Crediting Strategies
- Historical Performance: Worst, Best & Most Recent 10-Year Periods
- Fees & the Rider Charge
- ⚠️ Illustration Assumptions, Critical Flags
- Who Is the IncomeShield 10 Best For?
- Pros and Cons
- Frequently Asked Questions
Quick Facts: American Equity IncomeShield 10
The IncomeShield 10 is issued by American Equity Investment Life Insurance Company, rated A by AM Best (Excellent). American Equity is one of the largest independent annuity carriers in the U.S., known specifically for income-focused FIA products.
| Issuer | American Equity Investment Life Insurance Company |
|---|---|
| AM Best Rating | A (Excellent) |
| Product Type | Fixed Index Annuity with Built-In LIBR |
| Premium Bonus | None |
| Surrender Period | 10 years |
| Free Withdrawal | 10% of contract value annually (starting year 2) |
| Income Rider | Included, Lifetime Income Benefit Rider (LIBR) |
| IAV Rollup Rate | 10% simple interest for up to 10 years |
| Rider Fee | 1.20% annually on the Income Account Value (IAV) |
| Issue Ages | 40–80 |
| Minimum Premium | $5,000 |
| Maximum Premium | $1,500,000 (age 40–69); varies for older buyers |
| State Availability | Most states (not available in CA, GU, NY, PR, VI) |
The Lifetime Income Benefit Rider, How the 10% Rollup Works
Every IncomeShield 10 includes the Lifetime Income Benefit Rider (LIBR) with a Wellbeing Benefit. This is a core part of the product, not an optional add-on.
The rider works on two separate values:
- Contract Value, the actual money in your annuity, which grows (or stays flat in flat years) based on index performance minus the 1.20% rider fee
- Income Account Value (IAV), a separate “measuring stick” used only to calculate your income amount. It is NOT accessible as a lump sum. It is NOT the same as your contract value.
The IAV grows by 10% simple interest per year for up to 10 years, starting from your initial premium. On $100,000, that’s $10,000 of IAV growth per year, bringing the IAV from $100,000 at issue to $200,000 by year 11.
The key insight: When income begins, American Equity multiplies your IAV by a payout factor based on your age at issue and how long you’ve waited. The longer you wait, the higher both the IAV and the payout factor, which is why deferring income even a year or two meaningfully increases your monthly check.
Guaranteed Income by Start Year, Real Numbers
The illustration below is for a 60-year-old male with $100,000 in a non-qualified account in Arizona. These are guaranteed income amounts, they don’t depend on index performance. The IAV grows at 10% simple interest regardless of whether markets go up or down.
Guaranteed Lifetime Income, $100,000 Premium, 60-Year-Old Male
| Start Income At | Age | Income Account Value (IAV) | Payout Factor | Annual Income | Monthly Income | Income/Premium Ratio |
|---|---|---|---|---|---|---|
| Immediately (yr 1) | 60 | $100,000 | 6.24% | $6,240 | $520 | 6.24% |
| Year 2 | 61 | $110,000 | 6.24% | $6,864 | $572 | 6.86% |
| Year 3 | 62 | $120,000 | 6.25% | $7,500 | $625 | 7.50% |
| Year 4 | 63 | $130,000 | 6.40% | $8,320 | $693 | 8.32% |
| Year 5 | 64 | $140,000 | 6.89% | $9,646 | $804 | 9.65% |
| Year 6 ← Age 65 | 65 | $150,000 | 7.05% | $10,575 | $881 | 10.57% |
| Year 7 | 66 | $160,000 | 7.20% | $11,520 | $960 | 11.52% |
| Year 8 | 67 | $170,000 | 7.32% | $12,444 | $1,037 | 12.44% |
| Year 9 | 68 | $180,000 | 7.38% | $13,284 | $1,107 | 13.28% |
| Year 10 | 69 | $190,000 | 7.59% | $14,421 | $1,202 | 14.42% |
| Year 11 ← Max Rollup | 70 | $200,000 | 7.90% | $15,800 | $1,317 | 15.80% |
Income guaranteed for life. Payout factors are set at contract issue age and contract year income begins. Based on single life male payout. Joint life payouts are lower.
Example: Janet, age 63. She puts $100,000 into the IncomeShield 10 and waits 5 years to age 68. Her IAV has grown to $150,000, and her payout factor (locking in at age 63, 5-year deferral) is approximately 7.43%. That’s $11,145 per year guaranteed for the rest of her life, regardless of market performance or how long she lives. If she lives to 95, American Equity keeps paying.
The Wellbeing Benefit, What Happens If You Get Sick
One of the most distinctive features of the IncomeShield 10 is the Wellbeing Benefit, which is automatically included with the LIBR at no additional charge.
If you become unable to perform 2 of 6 Activities of Daily Living (ADLs), eating, bathing, dressing, transferring, continence, or toileting, you can activate the Wellbeing Benefit after owning the contract for 2 years. This doubles your income payment for up to 5 years:
- Single life payout: 2x income (200% of normal income) for up to 5 years
- Joint life payout: 1.5x income (150% of normal income) for up to 5 years
For the $100,000 example with 5-year deferral, normal income of $10,575/year becomes $21,150/year for up to 5 years under the Wellbeing Benefit. This functions as a lightweight long-term care benefit and adds real value for buyers concerned about care costs in retirement.
Important fine print: The Wellbeing Benefit can only be activated once. A confinement to a nursing home is not required, you only need to certify inability to perform 2 ADLs, with annual physician certification.
Surrender Schedule & Free Withdrawals
Surrender Charge Schedule (Most States)
| Contract Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11+ |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Surrender Charge | 9.2% | 9% | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0% |
Free withdrawals of 10% of contract value are available each year beginning in year 2. These do not trigger surrender charges. RMD amounts exceeding the free withdrawal threshold are also waived from surrender charges.
The minimum guaranteed surrender value is 87.5% of premium minus withdrawals, accumulated at the minimum guaranteed rate, so your worst-case scenario is losing no more than 12.5% of your original premium at the guaranteed floor.
Index Options & Crediting Strategies
The IncomeShield 10 offers six index strategies, including several volatility-controlled proprietary indexes and the plain S&P 500. Current rates as of March 2026:
| Index | Crediting Type | Current Rate |
|---|---|---|
| S&P 500 | 1-Year PTP Cap | 5.75% cap |
| S&P 500 | 1-Year PTP Participation Rate | 42% participation |
| S&P 500 | 1-Year Monthly Sum Cap | 2.5% monthly cap |
| S&P 500 Dividend Aristocrats DRC 5% ER | 1-Year PTP Participation Rate | 160% participation |
| BlackRock Adaptive US Equity 5% | Various | See current rate sheet |
| Nasdaq Premier™ Index | Various | See current rate sheet |
| NYSE® Premier Index | Various | See current rate sheet |
| S&P 500 Advantage 15% VT TCA (ER) | Various | See current rate sheet |
Historical Performance: Worst, Best & Most Recent 10-Year Periods
The illustration allocates $25,000 (25%) to each of four strategies on a $100,000 non-qualified account for a 60-year-old male starting income at age 65.
S&P 500 Monthly Sum Cap (2.5% cap), $25,000 Allocation
| Scenario | Period | Annualized Credited Rate | Value After 10 Years |
|---|---|---|---|
| Best Period | 2012–2021 | 7.82% | $46,602 |
| Worst Period | 2007–2016 | 3.58% | $30,103 |
| Most Recent | 2016–2025 | 7.07% | $43,314 |
S&P 500 PTP Participation Rate (42%), $25,000 Allocation
| Scenario | Period | Annualized Credited Rate | Value After 10 Years |
|---|---|---|---|
| Best Period | 2016–2025 | 6.85% | $42,223 |
| Worst Period | 2007–2016 | 4.28% | $32,663 |
| Most Recent | 2016–2025 | 6.85% | $42,223 |
S&P 500 Dividend Aristocrats DRC 5% ER, 160% Participation, $25,000 Allocation
| Scenario | Period | Annualized Credited Rate | Value After 10 Years |
|---|---|---|---|
| Best Period | 2012–2021 | 8.15% | $48,071 |
| Worst Period | 2016–2025 | 4.62% | $34,314 |
| Most Recent | 2016–2025 | 4.62% | $34,314 |
S&P 500 Annual PTP Cap (5.75%), $25,000 Allocation
| Scenario | Period | Annualized Credited Rate | Value After 10 Years |
|---|---|---|---|
| Best Period | 2016–2025 | 4.57% | $33,718 |
| Worst Period | 2007–2016 | 3.77% | $31,003 |
| Most Recent | 2016–2025 | 4.57% | $33,718 |
Overall Illustration Result
Using the most recent 10-year period as the baseline (retirement income starting at age 65), the illustration projects:
- $10,575/year in guaranteed lifetime income beginning at age 65
- $327,825 in cumulative withdrawals over the life of the contract
- 5.78% annual effective rate of return (accounting for income payments and remaining contract value)
Fees & the Rider Charge
The IncomeShield 10 has one primary fee: the 1.20% annual LIBR charge. It’s deducted from the contract value each contract anniversary, calculated based on the Income Account Value (IAV).
Here’s where the fee math gets important: as your IAV grows at 10% simple interest per year, the dollar amount of the fee grows too, even when the contract value hasn’t earned index credits. On $100,000 with a $150,000 IAV by year 5, the annual fee is $1,800, deducted from your contract value regardless of what the market does.
In flat years (zero index credit), the contract value shrinks by the rider fee. This is why the guaranteed scenario in the illustration shows the contract value slowly declining once income payments begin, the combination of withdrawals plus the 1.20% fee depletes the account even in optimistic scenarios.
⚠️ Illustration Assumptions, Critical Flags
🔍 What to Watch in This Illustration
1. The Most Recent Period Is the Best Period for Two Strategies
For the S&P 500 PTP Participation and S&P 500 Annual Cap strategies, the “most recent” 10-year period (2016–2025) is also the best historical period. The illustration implicitly uses the best decade in recent market history as its baseline. If your 10 years land in a period more like 2007–2016 (which included the 2008 crash), the credited rates drop significantly.
2. The S&P 500 Dividend Aristocrats DRC 5% ER Earned Near-Zero for Four Straight Years
This volatility-controlled index, which carries an eye-catching 160% participation rate, earned 0%, 0.33%, 0.05%, and 0% in 2022, 2023, 2024, and 2025 respectively. Despite 160% participation, the index’s 5% volatility target dampened returns to near zero during a period when the plain S&P 500 significantly outperformed. High participation on a low-volatility index doesn’t equal high returns.
3. The IAV and the Contract Value Are Not the Same Thing
The 10% IAV rollup sounds powerful, but the IAV is not money you can access. It’s only a calculation base for your income. If you surrender the contract in year 5, you receive the contract value (approximately $118,000–$125,000 in the illustrated scenario, minus applicable surrender charges), not the $150,000 IAV. Many buyers confuse these two numbers.
4. The 1.20% Fee Is Charged on the IAV, Not the Contract Value
This is unusual. Most rider fees are charged as a percentage of contract value. Because the IAV grows faster than the contract value in flat markets, the dollar fee is larger than it would appear at first glance. In year 10 (when IAV = $200,000), the annual fee is $2,400, deducted from whatever contract value remains. This drag matters most in low-return years.
Who Is the American Equity IncomeShield 10 Best For?
The IncomeShield 10 is purpose-built for buyers who want guaranteed lifetime income as their primary goal. It’s not the right tool if you’re primarily trying to accumulate wealth or pass assets to heirs.
The IncomeShield 10 is a strong fit if you:
- Are 55–70 years old with $100,000–$500,000 you want to convert to reliable income in 5–10 years
- Are concerned about outliving your savings and want a pension-like income stream
- Have health concerns and want the Wellbeing Benefit as a mild long-term care hedge
- Want to defer Social Security past 65 and need a bridge income in the meantime
- Can accept that once income begins, the contract value will be depleted over time
It is not a strong fit if you:
- Want to preserve principal for heirs, contract value depletes as income is paid
- Might need to surrender the annuity early (the Dividend Aristocrats index has performed near-zero recently)
- Live in California (not available in CA) or New York
- Want accumulation potential without an income-rider fee dragging on contract value
Pros and Cons
✅ Pros
- Guaranteed lifetime income, payments continue even if contract value hits zero
- 10% simple IAV rollup for 10 years, guaranteed growth of the income base
- Wellbeing Benefit doubles income (single) for 5 years if health event occurs
- No premium bonus means cleaner product structure without vesting complexity
- Income can begin as early as 1 year after issue, or be deferred for maximum benefit
- Payout factors increase with both age and deferral years, strong incentive to wait
- Spousal continuation available to protect joint-income buyers
- Enhanced benefit rider (waives surrender charges for nursing care, terminal illness) included at no extra charge for buyers 75 and under
- RMD-friendly, RMD amounts over the free withdrawal don’t trigger surrender charges
⚠️ Cons
- 1.20% annual rider fee regardless of market performance, charged on the higher IAV balance
- 10-year surrender period with charges starting at 9.2% in year 1
- Contract value depletes over time as income is paid, less value for heirs
- The S&P 500 Dividend Aristocrats 5% ER index earned near-zero from 2022–2025
- IAV is not a lump-sum-accessible value, many buyers misunderstand this
- Not available in California, New York, Guam, Puerto Rico, or Virgin Islands
- Wellbeing Benefit requires physician certification and can only be activated once
- Maximum premium varies by age: $750,000 for buyers 75–80
Want to See a Personalized Income Illustration?
Income guarantees depend on your age at purchase, how long you defer, and the amount you deposit. A $200,000 deposit at age 62 waiting to age 70 tells a very different story than a $100,000 deposit starting immediately. Get a free quote with your numbers.
📄 Download the Official Product Brochure
Review the complete product details directly from the carrier. The official brochure includes all current rates, allocation options, and state-specific variations.
Download American Equity IncomeShield 10 Official Brochure (PDF)
Frequently Asked Questions
How does the American Equity IncomeShield 10 income rider work?
The IncomeShield 10 includes the Lifetime Income Benefit Rider (LIBR), which tracks a separate Income Account Value (IAV). The IAV grows at 10% simple interest per year for up to 10 years, it’s not affected by market performance. When you’re ready to take income, American Equity multiplies your IAV by a payout factor based on your age and deferral period. The resulting dollar amount is paid to you for life, even after the contract value reaches zero.
What is the American Equity IncomeShield 10 rider fee?
The rider fee is 1.20% annually, calculated on the Income Account Value (IAV) and deducted from the contract value. Because the IAV grows at 10% simple interest per year, the dollar amount of the fee grows even if the contract value hasn’t earned index credits. For example, with a $150,000 IAV, the annual fee is $1,800, deducted from the contract value regardless of market conditions that year.
What is the Wellbeing Benefit on the IncomeShield 10?
The Wellbeing Benefit is included with the LIBR at no extra cost. If you’re unable to perform 2 of 6 Activities of Daily Living (ADLs) after the 2-year waiting period, you can activate the Wellbeing Benefit. This doubles your income for up to 5 years (single payout) or increases it by 50% (joint payout). It can only be activated once and requires annual physician certification. You do not need to be confined to a nursing home to qualify.
Is the American Equity IncomeShield 10 a good annuity for retirement income?
For buyers whose primary goal is guaranteed lifetime income, particularly those concerned about outliving their savings, the IncomeShield 10 is a solid choice. The 10% IAV rollup guarantees income growth regardless of market conditions, the payout factors are competitive, and the Wellbeing Benefit adds genuine long-term care-adjacent protection. However, the 1.20% rider fee is a real drag on contract value, and the product is not designed for accumulation or legacy planning.
What happens to my money if I die with the American Equity IncomeShield 10?
The death benefit is equal to the contract value (never less than the minimum guaranteed surrender value). Beneficiaries can receive it as a lump sum or choose another payment option. Importantly, the LIBR’s IAV balance is NOT the death benefit, the death benefit is the contract value, which may be lower than the IAV, especially in later years after income withdrawals have been taken.
