Settling For Steady Returns And Short-Term Liquidity?

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It could cost you in the long run!

The steady interest rates and short-term liquidity of a fixed rate product like a certificate of deposit may sound appealing. They provide you with the certainty of a fixed rate of return. They also allow you to access your money without penalty after a short period of time. However, this type of product could end up costing you in the long run. Generally, short-term liquidity means lower returns.

A fixed-indexed annuity may help you achieve a better balance. It offers the unique opportunity to earn interest based, in part, on market performance without the risk of market loss. To balance the potential for a higher return, a fixed-indexed annuity provides limited short-term liquidity. You can take a portion of your money out of an annuity without penalty every year. After a designated number of years, you can access all of your money penalty-free.

Below is a hypothetical example that compares a fixed-indexed annuity and two fixed rate products over a 10-year period. The fixed-indexed annuity uses historical S&P 500® performance and assumes the entire account value is allocated to the annual point-to-point indexed strategy, and a 6.00% cap applies for the entire period.

Fixed-indexed annuity with S&P 500 annual point-to-point indexed strategy with 6.00% cap. Access to account value after 5 years Fixed rate certificate of deposit at 0.50%. Access to account value after 6 months Fixed rate certificate of deposit at 2.00%. Access to account value after 2 years
Year Return Account value Return Account value Return Account value
2007 - $100,000 - $100,000 - $100,000
2008 0% $100,000 0.50% $100,500 2.00% $102,000
2009 6.00% $106,000 0.50% $101,003 2.00% $104,040
2010 6.00% $112,360 0.50% $101,508 2.00% $106,121
2011 0% $112,360 0.50% $102,015 2.00% $108,243
2012 6.00% $119,102 0.50% $102,525 2.00% $110,408
2013 6.00% $126,248 0.50% $103,038 2.00% $112,616
2014 6.00% $133,823 0.50% $103,553 2.00% $114,869
2015 0% $133,823 0.50% $104,071 2.00% $117,166
2016 6.00% $141,852 0.50% $104,591 2.00% $119,509
2017 6.00% $150,363 0.50% $105,114 2.00% $121,899
Interest rates for certificates of deposit are for comparison purposes only and do not reflect the historical interest rates or specific certificates. Hypothetical fixed-indexed annuity assumes a $100,000 purchase payment, allocated to an S&P 500 annual point-to-point index strategy with a 6% cap for each calendar year in the 10-year period shown in the chart. Historical performance of the S&P 500 Index is not indicative of future performance. Actual caps that we apply to our fixed-indexed annuities vary by product and from term to term. In addition, the one-year terms for our fixed-indexed annuities are not based on a calendar year but start on the 6th and 20th of each month. A different 10-year period, a different cap or a different term start date would affect the performance of the hypothetical FIA and result in higher or lower account values than those shown above.

You can see that the return of the fixed-indexed annuity varies from year to year but it has the potential to earn up to the cap. As a result, it may earn significantly more than a fixed-rate product. On the other hand, the account value in the fixed-indexed annuity is not fully liquid for five years.

This example is intended to help you understand how liquidity and returns are related. It is not intended to show past or future performance of a fixed-indexed annuity.



This example assumes no money is withdrawn from the FIA. If you take a withdrawal or surrender an FIA during the early withdrawal charge period, an early withdrawal charge and a market value adjustment may apply. An early withdrawal charge will reduce the account value. A market value adjustment may increase or reduce the account value.

The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by Annuity Investors® Life and Great American Life®. Standard & Poor’s®, S&P®, and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Annuity Investors Life and Great American Life. Annuity Investors Life and Great American Life annuity products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties makes any representation regarding the advisability of purchasing said products nor do they have any liability for any errors, omissions or interruptions of the S&P 500 Index.

When you buy a fixed-indexed annuity, you own an insurance contract. You are not buying shares of any stock or index. You cannot invest directly in the S&P 500 Index.

This flier provides a summary of some features of a fixed-indexed product. Great American Life and Annuity Investors Life are not investment advisers and the information provided in this document is not investment advice. You should consult your investment professional for advice based on your personal circumstances and financial situation.

All guarantees under a fixed-indexed annuity based on the claims-paying ability of the issuing insurance company. Products issued by Great American Life Insurance Company® and Annuity Investors Life Insurance Company®, members of Great American Insurance Group, Cincinnati, OH.