40% Bonus Annuity
Imagine getting a guaranteed 40% boost on your retirement savings—without market risk. With the 40% Bonus Annuity, your premium automatically grows to at least 140% of its original value after 10 years. That means a $100,000 deposit becomes a guaranteed $140,000—plus the potential to earn even more from index-linked growth.
How the 40% Bonus Works
- Guaranteed Growth: Your premium vests at 4% per year, reaching a minimum of 140% after 10 years.
- Example: Invest $250,000 → guaranteed $350,000 after 10 years (plus any index growth).
- Day-One Legacy Value: If used for death benefit payouts, beneficiaries can access up to 140% of your premium immediately (when taken as monthly income).
- Flexible Index Options: Choose from S&P 500® strategies with caps, participation rates, or performance triggers.
- Liquidity Options: Access up to 7% annually penalty-free after year one, plus nursing home and terminal illness riders included at no extra cost.
Why Choose a 40% Bonus Annuity?
- Lock in a 40% guaranteed increase over 10 years.
- Protect your principal from market losses.
- Potentially earn more through index growth.
- Enhance your income rider payouts for retirement income planning.
- Leave a stronger legacy with boosted death benefits.
Case Example
David, age 60, invests $500,000 into a 40% Bonus Annuity. After 10 years, his account is guaranteed to be worth at least $700,000. With index gains, his account may be worth even more—all while avoiding stock market risk. If he passes away, his beneficiaries could access the full boosted amount immediately through payout options.
What’s Next?
The 40% Bonus Annuity is designed for conservative investors, pre-retirees, and retirees who want guaranteed growth combined with upside potential. With access to 75+ carriers, we’ll help you compare this option against other leading fixed and indexed annuities to see which is right for your goals. You can compare the other fixed and bonus annuity rates here.
Get Your 40% Bonus Annuity Quote
Request a free personalized illustration and see exactly how this guaranteed 40% boost could fit into your retirement plan.
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FAQs: 40% Bonus Annuity
What is a 40% bonus annuity?
It’s a fixed or fixed indexed annuity that applies a large contract value bonus (e.g., 40%) or a guaranteed growth crediting schedule to your premium, subject to vesting and surrender terms. The bonus is designed to boost contract value used for benefits or income, not necessarily the cash surrender value on day one.
Is the 40% bonus fully vested right away?
Usually not. Many bonus annuities use a vesting schedule that releases the credited amount over time. If you surrender early, any unvested portion may be forfeited. Always review the vesting schedule and surrender charges in the disclosure.
How do surrender charges and MVAs affect me?
During the surrender period, withdrawals above the free-amount can incur surrender charges and, in many states, a market value adjustment (MVA). These can reduce what you receive if you exit early. Compare terms alongside our current fixed annuity rates to understand trade-offs.
Does the 40% bonus increase my lifetime income?
Often the bonus is applied to an income base (for riders) or contract value used to calculate lifetime payouts, which can improve projected income. Exact results depend on rider terms, roll-up credits, deferral length, and age when income starts. We can model this against other lifetime income options.
What’s the difference between a premium bonus and a guaranteed growth credit?
A premium bonus typically credits an added percentage to contract value (or income base) near issue. A guaranteed growth feature credits value over time (e.g., an annual vesting schedule). Both are subject to contract rules, vesting, and surrender terms.
Can I still take penalty-free withdrawals?
Most contracts allow annual penalty-free withdrawals (e.g., 5–10%) after the first year. Exceeding the free amount can trigger surrender charges and MVAs. Some contracts include nursing home or terminal illness waivers—review availability and criteria.
How are withdrawals and income taxed?
Earnings grow tax-deferred. Withdrawals from non-qualified annuities are generally taxed LIFO (earnings first) and income payments may be split between basis and earnings using the exclusion ratio. Learn more in our guide to the annuity exclusion ratio. Tax treatment varies for IRAs.
Will annuitization or rider income satisfy my RMDs?
For IRA annuities, annuitized payments generally satisfy the RMD for that specific contract, but not for your other IRAs. Rider withdrawals may or may not cover the full RMD—check the contract and your custodian’s calculations.
Can I fund a 40% bonus annuity with a 1035 exchange or IRA rollover?
Typically yes—subject to product eligibility, surrender schedules on your current policy, and suitability review. Funding method (IRA vs. non-qualified) affects taxes and RMD rules.
What happens if I die during the surrender period?
Most contracts pay beneficiaries a death benefit equal to the contract value (which may include vested bonus amounts). Unvested portions generally do not vest at death unless the contract explicitly says so. Confirm the death benefit language before buying.
About the Author:
Jason Stolz, CLTC, CRPC, is a senior insurance and retirement professional with more than two decades of real-world experience helping individuals, families, and business owners protect their income, assets, and long-term financial stability. As a long-time partner of the nationally licensed independent agency Diversified Insurance Brokers, Jason provides trusted guidance across multiple specialties—including fixed and indexed annuities, long-term care planning, personal and business disability insurance, life insurance solutions, and short-term health coverage. Diversified Insurance Brokers maintains active contracts with over 100 highly rated insurance carriers, ensuring clients have access to a broad and competitive marketplace.
His practical, education-first approach has earned recognition in publications such as VoyageATL, highlighting his commitment to financial clarity and client-focused planning. Drawing on deep product knowledge and years of hands-on field experience, Jason helps clients evaluate carriers, compare strategies, and build retirement and protection plans that are both secure and cost-efficient.
