American Equity Investment Life Insurance Review

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American Equity

American Equity

Our Take

American Equity Investment Life Insurance Company is best when you want to create tax-deferred savings or benefit from guaranteed lifetime income through its annuity plans. 

  • Pros and Cons
  • Key Takeaways
  • Company Overview
Pros and Cons
Pros
  • Nationwide coverage

  • Multiple plans

  • Lucrative riders

Cons
  • Annuity-based products

  • Low crediting rates

  • Extended surrender periods

Key Takeaways
  • Founded in 1995, American Equity Investment Life Insurance Company is based in Des Moines, Iowa. 
  • American Equity offers fixed index annuity and retirement solutions in Washington, D.C. and all 50 states. 
  • There is a specific surrender charge schedule based on your plan. 
  • In addition to the Lifetime Income Benefit Rider, there are several other riders to choose from to customize your policy.
Company Overview

Based in Des Moines, Iowa, American Equity Investment Life Insurance Company is a part of a larger group, American Equity Investment Life Holding Company, which also includes Eagle Life Insurance Company and American Equity Investment Life Insurance Company of New York. 

American Equity was founded in 1995 by David J. Noble, an insurance executive with more than 60 years in the industry. Today, it has over 650 employees, 26,000 active agents, and 500,000 contract owners, funding over half a million retirements across the country. 

Although it specializes in fixed index annuities, it also offers other retirement solutions based on your needs.

Geographical Restrictions

American Equity Life Insurance Company is licensed in all 50 states and Washington, D.C.

  • Year Founded 1995
  • Kinds of Plans Term, fixed annuities
  • Number of Plans 14
  • Payment Plan Options Lump sum, payment schedule
  • Customer Service Phone: (888) 221-1234; Email: info@american-equity.com; Monday to Thursday, 8 a.m. to 4:45 p.m. CST Friday, 8 a.m. - 1 p.m. CST
  • Official Website www.american-equity.com

American Equity is not one of our top-rated life insurance companies. You can review our list of the best life insurance companies for what we think are better options.

Pros Explained

  • Nationwide coverage: American Equity is licensed and available in Washington D.C. and all 50 states.
  • Multiple plans: There is a big selection of plans for you to choose from, increasing the likelihood of finding a plan to meet your needs.
  • Lucrative riders: American Equity does not skimp on additional protection, offering several riders to boost, protect, or lengthen income for policyholders. 

Cons Explained

  • Annuity-based products: If you are looking for the more traditional forms of life insurance, American Equity may not be the right choice for you. 
  • Low crediting rates: American Equity’s crediting rates for the S&P 500 are lower than some other competitors. 
  • Extended surrender periods: Depending on your plan, you may face extended periods of surrender charges that can last up to 11 years and more. 

Available Plans

American Equity offers both term insurance and fixed annuity plans.

Watch out for expensive surrender fees with many of American Equity’s plans.

Fixed Annuity Plans

A fixed annuity policy from American Equity is designed to provide guaranteed lifetime income based on the use of a popular index. 

American Equity uses specific indices, including these featured options:

  • BofA Destinations Index
  • Credit Suisse Tech Edge Index
  • SG Global Sentiment Index
  • S&P 500 Index 
  • S&P 500 Dividend Aristocrats Daily Risk Control 5% Excess Return Index 

These plans offer a set rate that is guaranteed not to change for a specific term with the option to convert your policy into lifelong income. There is tax-deferred growth that continues until you make a withdrawal, and you also have the option to complete the IRS required minimum distribution (RMD) immediately with this policy.

There are nine fixed annuity plans, although product availability may vary based on where you live.

EstateShield

The EstateShield plan provides guaranteed income with protected premiums, plus additional index growth. You have the option to reallocate to different crediting strategies on your contract anniversary or following a two-year crediting strategy.

EstateShield 10

The EstateShield 10 is a fixed index annuity that carries a 10-year term with guaranteed lifelong income, potential annual increases, and enhanced death benefits with your beneficiary’s choice of payment distribution. It is available for policyholders between the ages of 40 and 75 years.

When you pay your initial premium, you can choose whether to allocate the funds to your choice of a combination of fixed interest and index-linked crediting strategies.

There are certain indices for your EstateShield 10 policy:

  • BofA Destinations Index (Multi-Asset)
  • Credit Suisse Tech Edge Index (Multi-Asset)
  • S&P 500 (Equity only) 
  • S&P 500 Dividend Aristocrats Daily Risk Control 5% Excess Return Index (Equity only) 
  • SG Global Sentiment Index 

You also have the entire first year of your policy to add additional funds to your annuity and your benefits account value (BAV). After your initial premium, all premiums that follow are automatically allocated to the fixed interest strategy.  

Upon your contract anniversary or the end of a two-year crediting strategy, you have the option to reallocate your contract value based on the new strategy of your choice. A first-year BAV bonus is included after 10 years for your lifetime income withdrawal reserve. It is also included as part of your beneficiary’s enhanced death benefit. There is a minimum allocation of $1,000 per value and a minimum transfer of 10% of your contract’s value.

EstateShield 10 keeps your money close, with up to 10% free withdrawals each year. Other withdrawals may be subject to the surrender charge as outlined below based on the number of years you have held your contract. 

Year  Surrender Charge 
1 9.2%
9% 
8% 
7% 
6% 
5% 
4% 
3% 
2% 
10  1% 
11+  0% 

If you add the Lifetime Income Benefit Rider, you can begin to receive payments after the 10th anniversary of your contract. The payouts vary based on a number of factors.

American Equity Lifetime Income Benefit Rider–Payout Factors by Age
Age Single Lifetime Payments  Joint Lifetime Payments
50 to 59 3.35% 2.85%
60 to 64  3.8%  3.35% 
65 to 69  4.85%  4.35%
70 to 74  5.35%  4.8% 
75 to 79  5.85%  5.35% 
80 to 90  6.35%  5.85% 

AssetShield 

American Equity’s AssetShield Series allows you to allocate your initial premium to your choice of a fixed interest or index strategy, with all other payments going to a fixed index strategy. The minimum premium is $5,000, but the maximum premium depends on your age:

  • Ages 18 to 69: $1,500,000 
  • Ages 70 to 74: $1,000,000 
  • Ages 75 to 80: $750,000 
  • Ages 81 to 85: $500,000

It also has a sliding fee schedule for its surrender charge based on your plan and the year.

American Equity AssetShield Surrender Charge Schedule
Year AssetShield 5  AssetShield 7  AssetShield 10 
1 9.2% 9.2% 9.2%
9%  9%  9% 
8%  8%  8%
7%  7%  7% 
6%  6%  6% 
0%  4%  5% 
2%  4% 
8 0%  3% 
- 2% 
10  1% 
11+  0% 

AssetShield plans use these popular indices:

  • BofA Destinations Index (Multi-Asset)
  • Credit Suisse Tech Edge Index (Multi-Asset)
  • S&P 500 (Equity only) 
  • S&P 500 Dividend Aristocrats Daily Risk Control 5% Excess Return Index (Equity only) 
  • SG Global Sentiment Index 

AssetShield 5

This fixed index annuity plan is available for policyholders between the ages of 18 to 85 years. There is a five-year surrender charge schedule.

AssetShield 7

Available for ages 18 to 85 years, AssetShield 7 offers a seven-year surrender charge schedule for its fixed index annuity policy.

AssetShield 10 

The AssetShield 10 fixed index annuity has a 10-year surrender charge schedule and is available for policyholders between the ages of 18 and 80.

IncomeShield Series

The IncomeShield Series offers fantastic benefits while protecting your principal and offering several crediting options for improved income. 

IncomeShield 7

Available with the lifetime income benefit rider, the IncomeShield 7 fixed index annuity comes with a seven-year surrender charge schedule.  

Allocation options include either a fixed interest strategy or indexed strategies using popular large-cap equities, S&P 500, and S&P 500 Dividend Aristocrats Daily Risk Control 5% Excess Return Index.

American Equity IncomeShield 7 Surrender Charge
Contract Year Surrender Charge 
1 9.2%
9%
8% 
7% 
6% 
4% 
2% 
8+  0% 

IncomeShield 10

The IncomeShield 10 fixed index annuity comes with a guaranteed 7% Premium Bonus on all premiums paid in your policy’s first year. The Premium Bonus then vests over a 10-year period, based on the contract year.

American Equity IncomeShield 10 Premium Bonus
Contract Year Vested Percentage 
1 0%
10% 
20% 
30% 
40% 
50%
60%
70%
80% 
10  90% 
11+  100% 

The IncomeShield 10 has a 10-year surrender charge schedule.

Surrender Charge Schedule
Contract Year Surrender Charge Percentage 
1 9.1%
9% 
8% 
7% 
6% 
5% 
4% 
3% 
2% 
10  1% 
11+  0% 

Destinations

This fixed index annuity is exclusive to California and Idaho. It combines a fixed rate with index-linked crediting strategy options. 

There are two plans: Destination 9 and Destination 10.

Destination 9

Developed in conjunction with Bank of America, the Destination 9 plan has a fixed rate lasting for nine years.

Destination 9 Surrender Charges: California
Contract Year Surrender Charge Percentage 
1 8.25%
8% 
7%
6% 
5% 
4% 
3% 
8 2% 
1% 
10+  0% 

Destinations 10

Similar to the Destinations 9 policy, the Destinations 10 policy is a fixed index annuity but with a fixed rate lasting 10 years.

Destinations 10 Surrender Charge Schedule
Contract Year Surrender Charge Percentage 
1 9.2%
9% 
8%
7% 
6% 
5% 
4% 
3% 
2% 
10  1% 
11+  0% 

Bonus Gold

The Bonus Gold is a fixed index annuity that has a 10% Premium Bonus on any premiums you pay within your first contract year. However, there is a 16-year surrender charge schedule with the option to add a Lifetime Income Benefit Rider (LIBR).

Bonus Gold Surrender Charge Schedule
Contract Year Surrender Charge Percentage 
1 20%
19.5% 
19% 
18.5% 
18% 
17.5% 
17% 
16% 
15% 
10  14% 
11  12% 
12  10% 
13  8% 
14  6% 
15  4% 
16  2% 
17+  0% 

Retirement Gold 

The Retirement Gold is also a fixed index annuity with an optional lifetime income benefit rider. It carries an 8% premium bonus on all first-year premiums with a 14-year vesting period.

American Equity Retirement Gold Premium Bonus
Contract Year Vested Percentage 
1 0%
0% 
0% 
8.33%
16.67% 
25% 
33.33% 
41.67% 
50% 
10  58.33% 
11  66.67% 
12  75% 
13  83.33% 
14  91.67% 
15  100% 

Retirement Gold has a 10-year surrender charge schedule.

Contract Year Surrender Charge Percentage 
1 12.5%
12% 
12% 
11% 
10%
9% 
8% 
7% 
6% 
10  4% 
11  0% 

Guarantee Series Term Insurance

There are three plans for term insurance with American Equity Investment Life Insurance Company under the Guarantee Series. Eligible applicants must be between the ages of 18 and 85. 

If there is a death, the beneficiary is entitled to the entire contract value. In this case, there are typically no surrender charges, and while a lump-sum payment is the most popular payout option, American Equity may offer other payment options. 

If you keep your policy until the end of the term, you have 30 days from the end of your policy to choose one of the following options:

  • Apply the contract value to a settlement with no surrender charges
  • Surrender the contract without surrender charges
  • Renew the contract for another guarantee term

If no decision is made, the contract then automatically renews for a new term matching the length of your prior contract. It will, however, hold a new guaranteed interest rate that may be different from the one you had before. There may also be income tax that applies, and distributions prior to the age of 59½ may face additional IRS penalties. Your insurance agent can help with more details.

There are three options for the Guarantee Series: the Guarantee 5, Guarantee 6, and Guarantee 7 plans. They feature a deferred fixed annuity with a single premium and penalty-free withdrawals and policies that begin at $10,000 in coverage.

Guarantee 5

The Guarantee 5 plan is a savings plan that starts at $10,000 in coverage and is available with a five-year term.

American Equity Investment Life Insurance Company Guarantee 5 Series
Policy Year Surrender Charge 
1 9%
8% 
7% 
6% 
5% 

Guarantee 6

The Guarantee 6 plan has a longer-term of six years with a $10,000 minimum face value.  

American Equity Investment Life Insurance Company Guarantee 6 Series
Policy Year Surrender Charge 
9%
2 8% 
7% 
6% 
5% 
4% 

Guarantee 7

With a term of seven years, the Guarantee 7 plan has a term of seven years.

American Equity Investment Life Insurance Company Guarantee 7 Series
Policy Year Surrender Charge 
1 9%
8% 
7%
6%
5 5%
6 4%
7 3%

GuaranteeShield Series

American Equity’s GuaranteeShield Series can be a better choice when you are looking for stability in your finances. It includes fixed annuity products with a single premium, tax-deferred growth, and fixed rates. With guaranteed principal protection, there is a free withdrawal option if you hit tough times in the future. It allows you to access up to 10% of your contract value anytime after your first year. 

When the policy has met the end of its term, you have 30 days to choose one of the following:

  • Renew the contract for a new guarantee period
  • Make a free withdrawal and apply the balance of your contract value to a new guarantee period
  • Annuitize your contract for annuity payments
  • Surrender your contract without any surrender charges or market value adjustment
  • Continue your contract without any surrender charges

If you fail to make a decision, your contract automatically continues without any surrender charges and a 1% minimum guaranteed interest rate, which varies each year.

Products are not available in New York.

GuaranteeShield 3

There is a three-year term with the GuaranteeShield 3 plan. 

The surrender charge depends on the contract year and is different for California residents.

American Equity Investment Life Insurance Company Guarantee 7 Series
Policy Year  Surrender Charge  California Surrender Charge Percentage 
1 9% 8.30%
2 8%  8.25% 
7%  7.25%

GuaranteeShield 5

There is also the option for the GuaranteeShield 5, which offers a five-year term.

American Equity Investment Life Insurance Company GuaranteeShield 5
Policy Year Surrender Charge  California Surrender Charge Percentage 
1 9% 8.30%
8%  8.25% 
3 7%  7.25% 
6%  6.25% 
5 5%  5.20% 

Available Riders

A life insurance rider is a type of additional insurance coverage that you can purchase to further customize your policy to your needs. 

Many American Equity policies either automatically include or offer the option of the Lifetime Income Benefit Rider (LIBR) for your policy. With this rider in place, you permanently receive income payments with payment guaranteed for life. The LIBR also includes an Enhanced Death Benefit, which can give you a greater benefit than your base contract, and a Wellbeing Benefit, which increases the income payment by 200% for singles and 150% for joint policies for a maximum of five years when you meet the eligibility requirements.

American Equity offers several other life insurance riders that you can purchase based on the plan you choose.

Riders Market Value Adjustment rider Nursing Care Rider Enhanced Benefit Rider Qualifying Nursing Care Benefit Performance Rate Rider (PRR) Rate Integrity Rider Terminal Illness Rider
Guarantee Series              
Guarantee 5 ✔           
Guarantee 7  ✔  ✔           
GuaranteeShield Series              
GuaranteeShield 3 ✔  ✔       
GuaranteeShield 5  ✔  ✔  ✔  ✔       
EstateShield Series              
EstateShield 10   ✔  ✔       
AssetShield Series              
AssetShield 5      
AssetShield 7  ✔    ✔    ✔   
AssetShield 10  ✔    ✔    ✔  ✔   
IncomeShield Series               
IncomeShield 7        
IncomeShield 10 ✔  ✔           
Destinations              
Destinations 9          
Destinations 10 ✔        ✔  ✔ 
Gold Series              
Bonus Gold          
Retirement Gold   ✔          ✔ 

Market Value Adjustment (MVA)

The Market Value Adjustment (MVA) Rider provides optional coverage, either increasing or decreasing how much you can withdraw based on current market conditions. An MVA may increase or decrease the amount of a withdrawal in excess of the penalty-free withdrawal amount or the surrender value. Typically, the cash surrender values decrease as the MVA index increases. However, this could make your policy’s interest rates increase.

Nursing Care Rider

This rider begins after your policy’s third contract anniversary and applies if you become confined to a qualified nursing care center for a minimum of 90 days. In this case, you can make a penalty-free withdrawal. If you are confined within your second or third contract year, a 20% penalty-free withdrawal applies.

The Nursing Care Rider is not available in Massachusetts.

Enhanced Benefit Rider

If you elect this rider, you can receive a 4.5% rate for the income account value. It also gives your beneficiary the option to choose from a lump-sum payment or a regular payment schedule. However, this rider carries a fee of 0.70% of your contract’s total value.

Qualifying Nursing Care Benefit

This rider applies after your first contract year if you are confined to a qualified care facility for 90 days or more. In this case, this benefit allows you to make a one-time withdrawal of up to your total contract value. 

Rate Integrity Rider

When you add the Rate Integrity Rider, it waives surrender charges when you terminate your annuity contract due to a cap or participation rate for any included crediting strategies, with each crediting strategy rate determined at time of policy purchase.

Terminal Illness Rider 

This rider applies after your first contract year, offering a 100% penalty-free withdrawal if you receive a terminally ill diagnosis.

It is not available in Massachusetts.

Customer Service

American Equity has a team of more than 500 employees to provide customer service.

Contact American Equity Investment Life Insurance
Email info@american-equity.com 
Toll-free number (888) 221-1234
Monday through Thursday, 8 a.m. to 4:45 p.m. CST
Friday, 8 a.m. to 1 p.m. CST
Main office number (515) 221-0002
Monday through Thursday, 8 a.m. to 4:45 p.m. CST
Friday, 8 a.m. to 1 p.m. CST
Office address 6000 Westown Parkway 
West Des Moines, IA 50266
Mailing address P.O. Box 71216
Des Moines, IA 50325

Complaint Index

An important way to judge a company’s customer satisfaction is to look at its consumer complaint index rating by the National Association of Insurance Commissioners (NAIC). The NAIC collects consumer complaints and assigns each insurance company a unique complaint index score using a baseline of 1.00. 

American Equity Investment Life Insurance Company holds a 0.14 rating for 2020, showing an increase from 2019’s score of 0.07 and 0.08 in 2018. Regardless, these scores are significantly lower than the industry average, showing that American Equity prioritizes customer service and satisfaction in its regular operations.

Third-Party Ratings

Another important rating to consider is a company’s financial strength scores. AM Best is a respected leader in the industry for financial reliability, assigning each insurance provider a grade each year. This is important because it often means a company is able to process and pay claims efficiently. American Equity receives high scores with an A- (Excellent) rating that shows strong financial strength. 

Cancellation Policy

When you purchase a new insurance policy, there is a "free look" period that allows you to review your policy in greater detail and return it for a refund within the eligible timeframe. Insurance companies typically give 10-30 days for this period, but it can vary by company, so be sure to ask your insurance carrier about options. 

If you choose to cancel your policy after the free look period, American Equity provides a detailed schedule of upfront surrender charges based on your plan and the contract year of your withdrawal. Other charges may apply, so be sure to consult your policy for details.

Price

The price of American Equity’s life insurance plans relies upon a number of factors, such as your age, health, medical history, and state of residence. Your gender is another factor, with most companies basing rates not on current gender identity but instead, your sex at birth.  

To receive a quote, contact your insurance agent for policy options in your area.

Competition

To understand how American Equity Investment Life Insurance Company stacks up against the competition, we compare it to one of the best life insurance companies today, New York Life.

Both companies are large, with dividends worth billions and several plans to choose from. However, American Equity Investment lacks the straightforward approach and traditional life insurance products that New York Life has readily available. New York Life also has a much higher market share and receives higher scores from AM Best, signifying stronger financial stability. Although American Equity has its strengths, New York Life rates higher in a number of areas.

  American Equity Investment Life Insurance New York Life 
Market Share 0.02% Third-largest in U.S., 5.7%
Number of Plans  14 10 
Dividends for 2020  $57.64 billion $1.9 billion 
Wellness Program Discounts/Quit Smoking Incentives  Not specified Not applicable 
Service Method  Agents Agents 
AM Best Rating  A- (Excellent) A++ (Superior) 
Price Rank  Varies Better than most 
Complaints Trend  0.14 Excellent 0.15 Excellent
Final Verdict

American Equity Life Insurance Company can be a great choice when you are looking for the added investment options of fixed annuities and linked crediting strategies. Although there is flexibility in how you grow your money, don’t expect any of the basic life insurance products seen with other providers.

Our Methodology: How We Review Life Insurance Carriers

Investopedia analyzes the leading life insurance carriers today using our signature life insurance review methodology. We analyze factors like the type of coverage available, how many plans are offered, and how much coverage costs. We also look to top industry ratings providers to evaluate each company’s customer service and financial strength. Based on these factors and more, we present detailed and analytical life insurance reviews to help guide your financial future for you and your family. 

Article Sources

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  1. NAIC. "CIS Refined Results." Accessed August 29, 2021. 

  2. AM Best. "American Equity Investment Life Insurance Company." Accessed August 29, 2021.