Security Benefit at a Glance: Rates, Products and Reviews

Todays Best Security Benefit Annuity Rates

Term	Product	AM Best Rating	Rate
5 Years	Advanced Choice	A-	5.35 %
5 Years	Advanced Choice	A-	5.25 %
7 Years	Advanced Choice	A-	5.35 %

Compare Security Benefit Annuity Rates

Company Overview

When you’re shopping for an annuity – or any insurance product – you want to look at a carrier’s track record to be sure it’s been able to weather the economic storms that are bound to come along. Security Benefit Life Insurance Company certainly passes the longevity tests, with its roots going back to the company’s official formation in 1892.

The company was formed by 11 men who each pitched in $1 to start an insurance fund. Today, the Topeka, Kansas-based company offers a variety of annuity products for retirement income planning. Ratings agencies recognize the company for its financial stability. It currently has $39.1 billion under management, a far cry from the $11 pooled together in the back room of a Topeka drugstore in 1891.

Here’s a look at Security Benefit’s products and how it’s positioned within the financial services industry.

Annuity Products Offered by Security Benefit Life

Security Benefit gives its customers the option to choose between three different types of annuities: fixed, fixed index and variable annuities.

Fixed Annuities

Security Benefit offers several fixed annuities. These are suitable for savers who want stable, predictable income and guaranteed interest rates. They also offer safety of principal and tax-deferred growth. Some of those fixed annuities include: 

Total Interest Annuity

Designed for savers who don’t want to lose principal in a volatile market. It places a portion of the account owner’s retirement savings into an annuity that won’t have a fluctuating value based on the financial markets. The minimum purchase is $2,500 or savers can opt for a recurring purchase payment of $50 per month.

Advanced Choice Annuity

Designed for savers who don’t want to lose principal in a volatile market. It places a portion of the account owner’s retirement savings into an annuity that won’t have a fluctuating value based on the financial markets. The minimum purchase is $2,500 or savers can opt for a recurring purchase payment of $50 per month.

Rate Track Annuity

For those who want to preserve principal while still participating in a rising rate environment. Its return is linked to a three-month overnight rate, which offers competitive returns relative to other savings products. This annuity provides principal protection, tax-deferred growth and flexible payout options for retirement income. 

Fixed Index Annuities

Security Benefit’s products connected to market indexes give savers the potential for higher returns. They also have caps and floors to protect against market downturns. Some of these include:

ClearLine Annuity

Designed to grow savings by investing a portion of account assets in the stock market. However, it’s guaranteed to never lose money, even if the market drops. The minimum annual interest rate is set at the time of issue and is guaranteed for the life of the contract.

Foundations Annuity

Can boost retirement savings without investing in the stock market. Account owners receive interest credits based on a portion of the increase of a market index, but they’re guaranteed to never lose money, even if the market declines.

Strategic Growth Annuity

Allows for limited contributions within a specified time frame. It has 42 crediting options, so buyers must be certain they understand the product before signing a contract. It’s designed to accumulate retirement savings without market risk.

Variable Annuities

Security Benefit’s variable annuities offer investment options that are tied to stock or bond funds, offering the possibility of higher returns. These products carry higher risk but also have the potential of increased rewards.

EliteDesigns Variable Annuity

Designed to help savers accumulate wealth over the long haul. Investment portfolios are tailored to individual risk profiles and financial goals with more than 300 underlying investment options, including alternative strategies. Low product costs and tax-deferred portfolio growth may help boost wealth accumulation.

SecureDesigns Variable Annuity

Geared toward individual risk profiles and goals using 90 investment options or the company’s own target portfolios. This might appeal to investors who want to stay the course, despite market volatility. It offers optional riders so owners can choose their own protections and benefits.

Variflex Variable Annuity

Provides a variety of payout features while also offering a guaranteed death benefit before payout begins. This ensures that the annuitant’s savings are passed on to their beneficiaries. The account offers more than 40 investment options or the company’s own target portfolios developed with asset manager Mesirow.

Evaluating Security Benefit Life’s Annuities

Annuities can offer tax-deferred growth and guaranteed income, but they also come with fees and potential market risk. For instance, variable annuities, such as Security Benefit’s EliteDesigns Variable Annuity, provide investment options from reputable money managers, allowing for portfolio diversification. However, they can also carry higher annuity fees and charges.

These products might not be suitable for everyone, especially those who need immediate liquidity or have a low risk tolerance.

Features and Benefits

There are many features and benefits to choosing Security Benefit for your annuity. Those include the following.

Lifetime Income Guarantees and Options for Periodic Withdrawals

One of the biggest concerns of retirees is outliving their money. Security Benefit Life annuities are designed to make sure that doesn’t happen. For example, the Total Interest Annuity offers things like lifetime income guarantees through optional riders.

Many products from this company allow for periodic withdrawals without a surrender charge. These give owners flexibility to access some of their money as needed, while still maintaining the product’s benefits.

Optional Riders

Security Benefit offers optional riders for specific needs, including: 

Long-Term Care Benefits

Certain annuities include riders that provide additional income to cover long-term care costs if the annuitant becomes seriously ill or disabled. This rider can help ease financial strain during stressful times.

Enhanced Death Benefits

Some products offer this option, which is designed to make sure beneficiaries receive more than the current account value. These enhancements include payout guarantees or interest growth. For example, SecureDesigns offers an annual stepped-up death benefit. 

Other Customization Options

There are other riders that can boost income or offer inflation protection. This can more closely align the annuity with your financial goals. 

Tax-Deferred Growth and Potential for Compounded Interest

Like other annuities, Security Benefit’s products allow tax-deferred growth, meaning your gains won’t be taxed until you start making withdrawals. This allows for compounding, which means the account can grow faster over time. This feature is particularly appealing for those planning to retire several years down the road and want as much accumulation as possible.

Flexibility in Payment Timing, Surrender Charges or Annuitization

Many of Security Benefit’s annuities offer flexibility when it comes to payout timing. Annuitant can choose: 

Timing of Payouts

Immediate annuities start paying out right away, after a lump sum is deposited. Another way to design an income stream that aligns with your situation is to choose a fixed annuity, which offers a set interest rate over a specific period.

Surrender Charge Flexibility

Products like the Foundations Annuity offer either a five-year or seven-year surrender charge period. The Total Interest Annuity includes a surrender charge waiver for early retirement rider, which allows withdrawals without surrender charges if the annuitant meets certain conditions.

Annuitization

With this company’s products, annuitants can convert accumulated account value into regular income, creating a predictable cash flow for life. The withdrawal schedule can be customized to suit individual needs, such as monthly or annually.

Fees and Charges

Fees commonly associated with Security Benefit Life’s annuities include administrative fees, mortality and expense charges and early withdrawal penalties. All of these are common to various insurers’ line of annuities, so you’ll find similar fees if you shop around to evaluate other companies.

Understanding the fees associated with annuities is crucial because they can significantly affect the returns you receive over time. Here’s how the most common fees can impact your annuity: 

Administrative Fees

These are charged to cover the cost of managing your account. They’re usually a small percentage of your investment, but over the long term, they can add up. The higher the administrative fee, the lower your returns will be because less of your money is being invested for growth.

Mortality and Expense (M&E) Charges

Insurance companies charge this fee to cover the cost of items like paying death benefits and managing the annuity. These fees are usually a small percentage of your annuity’s value, but over time, they can reduce the overall growth of your investment.

Early Withdrawal Penalties

If you take money out of your annuity before a specified period, known as the surrender period, you’ll typically face a penalty. This can be a steep fee in the early years of the contract, and it can reduce your liquidity if you need the money sooner than you expected.

Financial Strength and Stability

The Security Benefit Life Insurance Company has $53.5 billion under management as of Sept. 30, 2024, according to Fidelity Investments. It has an A- rating from three different agencies: AM Best, Fitch Ratings and Standards & Poor (S&P). 

When S&P affirmed its issuer credit and financial strength rating in February 2024, it lifted its ratings outlook to stable from negative. According to S&P, “The stable outlook reflects our expectation for capital adequacy at least at the 99.95% confidence level, a diversified revenue and distribution mix, and financial leverage below 30%.”

Customer Reviews and Satisfaction

In 2019, plaintiffs filed a lawsuit against Security Benefit Life in Kansas, alleging that the company misled clients about performance of its proprietary index and fixed index annuities. The case has faced several delays, and a judge expressed concerns over the slow progress. 

However, it’s not difficult to find sites where disappointed and angry consumers are leaving poor reviews. Keep in mind: Online complaints may or may not have merit. When you read an online review of Security Benefit or any other company, you’re seeing only one side of the story. 

In fact, there’s no way of knowing whether a given complaint is even written by a real customer. If you’re thinking of purchasing an annuity or insurance product, talk to an insurance agent or financial planner who can give you more objective information.

Consulting with a Financial Advisor

It’s no secret that annuity products are complex and can be hard to understand. That’s why it’s important to consult with a financial advisor who can help you sort out the nuances of different annuity options to decide whether a product aligns with your retirement goals.

An advisory can also give you insights into the current market conditions and how various products might perform under different scenarios. Additionally, a financial advisor can help you evaluate the credibility and reputation of the insurance company offering the annuity.

Comparing Security Benefit Life with Other Annuity Providers

Different companies offer various products with distinct features, fees and benefits. For example, Allianz Life, Athene and AIG are all reputable, well-established insurers that have been recognized as top fixed index annuity companies in recent years. 

By comparing these options, you can find which product best suits your needs and has an acceptable and understandable fee structure. Consider factors such as: 

• The company’s financial stability
• The flexibility of the annuity
• Potential returns
• Any additional benefits or riders that might be included

Final Thoughts

When choosing an annuity product, the first thing you should do is speak to a financial adviser. Security Benefit has a lot of annuity products and optional riders to choose from, but it’s all about what you need for your life. 

Security Benefit does have strong financial ratings, despite being involved in a lawsuit. It does offer a lot of products to choose from, so if you want a customizable annuity, this could be the right choice for you. 

Editor Norah Layne contributed to this article.