40% Bonus Annuity

The EquiTrust SmartBoost Index is a fixed indexed annuity built around a single defining feature: a no-fee, built-in 40% BOOST to the Guaranteed Enhanced Accumulation Value (GEAV) from day one. That means a $200,000 premium immediately creates a $280,000 guaranteed value for death benefit and legacy purposes — without requiring a separate rider purchase, without an annual fee, and without exposure to stock market losses. At the same time, the Accumulation Value (AV) earns additional interest through index-linked crediting strategies, providing growth potential on top of the guaranteed foundation.

At Diversified Insurance Brokers, we work with EquiTrust as one of more than 100 A-rated carriers in our marketplace. We evaluate the SmartBoost Index the same way we evaluate every contract — by comparing what it actually produces against alternatives, identifying which buyers it genuinely serves, and being clear about the trade-offs so clients understand exactly what they are committing to before any premium is deployed. If you have already received a SmartBoost illustration from another source, our 2nd opinion annuity quote review service evaluates the offer against the full market. For context on how this product fits within the broader 40% bonus annuity category, see our 40% bonus annuity guide and our overview of bonus annuities over 20%.

What the SmartBoost Index Is — and How It Works

The EquiTrust SmartBoost Index is a single-premium, fixed indexed annuity issued by EquiTrust Life Insurance Company of West Des Moines, Iowa. It accepts applicants ages 0–80, with a minimum premium of $10,000 and no additional premiums after issue. The product is built around two distinct values that operate simultaneously and serve different planning purposes.

The Accumulation Value (AV) is the real, liquid account value — the amount that earns index credits through the contract’s crediting strategies, and the basis for withdrawals, surrenders, and required minimum distributions. This is the money that grows based on actual index performance within the contract’s caps, participation rates, and floors. The AV starts at the initial premium and grows over time through index credits. Importantly, index credits are applied only to the AV — not to the boosted values.

The Guaranteed Enhanced Accumulation Value (GEAV) is a separate contractual ledger set at 140% of the initial premium from day one — the 40% BOOST applied immediately. A $100,000 premium creates a $140,000 GEAV on the date of issue. The GEAV is not the AV — it is not accessible as a lump sum cash surrender — but it serves as the guaranteed floor for the death benefit and, after ten years, as a step-up value that the AV will be raised to if the AV has not organically grown above the GEAV through index credits. The GEAV is proportionately adjusted for any withdrawals taken during the first ten contract years.

The Vested GEAV defines how much of the 40% enhancement is permanently credited at each contract anniversary. The boost vests in a stair-step pattern at 4% per year — so by the end of year one, $104,000 is vested; by year five, $120,000; by year ten, the full $140,000. A surrender during the first ten years results in the Vested GEAV being used as the basis for the cash surrender value calculation — not the full $140,000 GEAV — which means early exit costs reflect both the declining surrender charge schedule and the unvested portion of the BOOST. Surrender charges and MVA apply to amounts withdrawn above the annual free withdrawal allowance.

Case Study: How SmartBoost Index Works for a Retired Teacher

EquiTrust illustrates the SmartBoost Index through a case study of Sherry, a 65-year-old retired teacher who deposits $100,000 into the contract. Her objectives are guaranteed growth regardless of market conditions, recovery from prior market losses, downside protection, and leaving a meaningful legacy to her children and grandchildren. The table below tracks how the contract’s key values develop over the first ten years based on this $100,000 initial premium, using EquiTrust’s hypothetical Accumulation Value figures from the case study illustration.

Initial premium: $100,000. Hypothetical AV reflects illustrative index credits from the EquiTrust SmartBoost Index case study and is not a guarantee of future performance. The GEAV is $140,000 from day one. Vested GEAV steps up 4% per year ($4,000/yr). After year 10, the death benefit equals the AV for all payout options. Guarantees are based on the claims-paying ability of EquiTrust Life Insurance Company. The BOOST is adjusted for withdrawals taken in the first 10 contract years.

What the table reveals is the product’s structural logic. During years one through five — when the hypothetical AV trails the GEAV — the guaranteed $140,000 death benefit (paid over 60 monthly installments) provides legacy protection that the AV alone could not deliver. By year six, the hypothetical AV has crossed above the GEAV and the death benefit transitions fully to the AV for all payout options. By year ten, when the 40% BOOST is fully vested, the hypothetical AV of $176,350 significantly exceeds the guaranteed $140,000 floor — meaning Sherry received the benefit of both the guaranteed protection floor in early years and the index-linked upside growth in later years. After the tenth year, the GEAV is no longer applicable and the death benefit equals the AV going forward.

The BOOST: How It Works and What It Is — and Is Not

The 40% BOOST in the SmartBoost Index is fundamentally different from most bonus annuity designs in the market, and that difference matters enormously for how the product should be evaluated. Most bonus annuities apply the bonus to an income benefit base — a ledger value used solely to calculate lifetime income withdrawals from a separate rider. The SmartBoost’s BOOST applies to the Guaranteed Enhanced Accumulation Value, which is used specifically for the death benefit and for a potential AV step-up at the end of year ten. It is not an income rider base. There is no income rider in this product — it is designed around guaranteed accumulation and legacy, not around guaranteed lifetime withdrawals from an income calculation base.

The practical distinction: if a client’s primary goal is guaranteed lifetime income through a withdrawal rider, the SmartBoost Index is not the right product — it does not include a GLWB income rider. If a client’s primary goals are guaranteed accumulation protection, principal protection from market losses, and a meaningful death benefit that exceeds the cash account value by 40% from day one — the SmartBoost Index is specifically designed for that objective. Understanding how annuity bonuses work across different product architectures helps clarify why this distinction is consequential for product selection.

The BOOST is also genuinely no-fee — it does not require the purchase of an optional rider and does not carry an annual charge deducted from the AV. This is a meaningful structural difference from income-rider-based bonus designs where the rider fee (typically 1.0% to 1.5% annually) reduces the AV over time. In the SmartBoost, the AV is not burdened by a rider fee, which means the full index-credited growth flows to the AV unencumbered. Our resource on whether annuities have fees explains the distinction between base contract costs and optional rider fees across FIA designs.

Vesting, Surrender Schedule, and Free Withdrawals

The SmartBoost Index carries a ten-year surrender charge schedule. Surrender charges are applied as a percentage of the Vested EAV on partial withdrawals exceeding the annual free withdrawal amount. The schedule is: Year 1: 9%, Year 2: 8%, Year 3: 7%, Year 4: 6.5%, Year 5: 5.5%, Year 6: 4.5%, Year 7: 3.5%, Year 8: 2.5%, Year 9: 1.5%, Year 10: 0.5%. A market value adjustment (MVA) also applies when surrender charges are imposed, with the exception of Utah and Washington. Understanding how annuity surrender charges and MVA interact is important for any buyer evaluating this ten-year commitment.

After the first contract year, 7% of the initial premium may be withdrawn each contract year without surrender charge or MVA — either systematically or as a single withdrawal. Note that this free withdrawal is calculated on the initial premium, not the growing AV, which is important for planning purposes as the account grows over time. Withdrawals in excess of the free amount permanently reduce future free withdrawal capacity, which is a detail worth confirming in the full contract disclosure before taking any distribution. Our resource on annuity free withdrawal rules provides the broader context for how these provisions function across comparable products.

The vesting mechanics interact directly with surrender timing. If a client needs to access a significant portion of the contract early, the cash surrender value is the Vested EAV less applicable surrender charges and MVA — meaning both the unvested portion of the BOOST and the surrender charge reduce the net available value simultaneously. In year two, for example, the Vested EAV is $108,000 but an 8% surrender charge applies to excess withdrawals, and the full $140,000 GEAV is not accessible as a lump sum. Early exit from a SmartBoost contract is structurally expensive — which is exactly why this product is appropriate only for buyers with a genuine ten-year commitment and no realistic probability of needing full liquidity before the surrender schedule completes.

Index Crediting Strategies

The SmartBoost Index offers four index crediting accounts across two reference indices. The first is the S&P 500, available through three crediting methods: a one-year point-to-point cap strategy (index credits based on the S&P 500 percentage change up to a specified cap), a one-year point-to-point participation strategy (index credits based on the S&P 500 percentage change multiplied by a declared participation rate), and a one-year point-to-point performance trigger (a declared trigger rate is credited if the S&P 500 is positive; zero is credited if the index declines or has no growth). The second index is the S&P 500 Dynamic Intraday TCA, available through a one-year point-to-point participation strategy. This volatility-controlled index rebalances up to 13 times daily using a time-weighted average price mechanism, targets 15% volatility, and applies trend signals to guide rebalancing — providing a smoother index experience that typically enables higher participation rates in exchange for a more managed return profile.

Index credits are applied only to the AV — not to the GEAV, Vested GEAV, EAV, or Vested EAV. In negative index years, zero is credited to the AV and the account value is unchanged by market performance. This zero-floor protection is the foundational principal protection feature of all fixed indexed annuities, including the SmartBoost. Our resource on whether you lose your principal in an indexed annuity explains how this protection works and what scenarios can reduce account value despite market protection.

Death Benefit Structure: How It Works for Legacy Planning

The SmartBoost Index’s death benefit design is the product’s most distinctive feature and the primary reason it is well-suited for buyers whose planning combines accumulation and legacy goals. During the first ten contract years, beneficiaries have two payout options. The first is a 60-month installment option — the full EAV (Greater of AV and GEAV, which is $140,000 from day one regardless of how much the AV has grown) paid as equal monthly payments over five years. The second is a lump-sum option — the Vested EAV (Greater of AV and Vested GEAV, which reflects the actual vested portion of the BOOST at the time of death). After the first ten contract years, the death benefit equals the AV for all payout options.

The practical impact is significant during the critical early years. If Sherry in the case study passed away at the end of year two, her beneficiaries could elect to receive $140,000 spread over 60 months — meaningfully more than the $106,000–$108,000 AV range at that point — or $108,000 as a lump sum (the Vested GEAV at year two). The 60-month payout option specifically preserves the full $140,000 for the beneficiary regardless of when death occurs during the first ten years, as long as the installment option is elected. By year six in the hypothetical illustration, the AV has grown above the GEAV and the death benefit converges to the AV for all payout options, making the two options equivalent from that point forward. For buyers focused on the legacy dimension, our resource on annuity beneficiary death benefits explains beneficiary options, spousal continuation, and the 10-year rule for non-spouse beneficiaries of qualified contracts in full detail.

The Year 10 AV Step-Up: A Critical Structural Feature

One of the SmartBoost Index’s most important contract provisions is the guaranteed AV step-up at the end of year ten. If the AV has not grown above the GEAV by the end of the tenth contract year — which could occur in a prolonged period of flat or mildly negative index performance — the AV is automatically stepped up to the full $140,000 GEAV. This step-up is distributed proportionately across all accounts, and future interest and index credits are applied to this higher stepped-up AV going forward.

This provision is the contractual backstop that makes the 40% BOOST genuinely guaranteed in the accumulation context — not just as a death benefit floor, but as a guaranteed minimum account value at the end of ten years. The step-up eliminates the risk that a decade of flat markets leaves the AV below the guaranteed floor, ensuring that the BOOST’s economic benefit is realized either organically (through index growth that surpasses the GEAV) or contractually (through the step-up if it has not). For buyers who are evaluating whether annuities are genuinely guaranteed in the way the marketing suggests, our resource on whether annuities are guaranteed provides the full context for what guarantees are contractual versus projected.

Additional Provisions: Nursing Home Waiver and Terminal Illness Rider

The SmartBoost Index includes two no-charge access provisions that provide meaningful flexibility during qualifying health events. The Nursing Home Waiver allows access to up to 100% of the Vested EAV — after the first contract year — if the owner is confined to a nursing home for 90 consecutive days. This provision eliminates the surrender charge and MVA barriers to access that would otherwise apply to amounts above the annual free withdrawal limit, providing full liquidity at a moment when medical expenses and care costs may require it most.

The Terminal Illness Rider allows access to up to 75% of the Vested EAV if the owner is diagnosed with a terminal illness. Both provisions are available at no additional charge for all applicant ages. These hardship waivers are particularly relevant for a client profile like Sherry — a 65-year-old whose retirement planning must account for the realistic probability of significant healthcare needs during the contract period. Understanding how these provisions interact with the broader healthcare and long-term care planning picture is an important part of evaluating any long-term annuity commitment. Our resource on annuities with long-term care benefits covers the landscape of annuity products that address care needs directly within their contract structure.

Who the SmartBoost Index Is Best Suited For

The SmartBoost Index is specifically designed for conservative pre-retirees and retirees whose planning priorities are guaranteed accumulation protection, market downside elimination, and a meaningful legacy benefit — not guaranteed lifetime income through a withdrawal rider. The ideal buyer is someone who wants to know with certainty that their savings will be worth at least 140% of the original premium at the end of ten years, and who wants their beneficiaries to receive $140,000 from day one if death occurs during the early contract years — regardless of what markets do in the interim.

This product is particularly well-suited for buyers rolling over retirement accounts — from a 401(k), a Traditional IRA, or a 403(b) — who have experienced significant market losses in recent years and want to rebuild their retirement account balance with a guaranteed floor that prevents further loss while preserving upside participation. The product is also well-suited for buyers who have a meaningful portion of retirement savings they want to protect for heirs, and who want that protection in place immediately rather than waiting for accumulation to build the legacy value organically.

Conversely, the SmartBoost Index is not the right fit for buyers who need guaranteed lifetime income through a withdrawal rider structure, for buyers who need full liquidity within the first five years, or for buyers who want to compare income riders across carriers. For those objectives, a fixed indexed annuity with an income rider or a FIA with a lifetime income rider would be more appropriate. EquiTrust offers other products within their lineup that include income features — our resource on whether EquiTrust is a good company evaluates the carrier’s financial strength and product quality across their full annuity product lineup, including the EquiTrust MarketPower Bonus which includes income multipliers for buyers whose goals combine bonus and income features.

How Diversified Insurance Brokers Evaluates This Product

As an independent agency with access to more than 100 carriers, our role when evaluating the SmartBoost Index is to determine whether it genuinely serves the specific buyer’s goals better than available alternatives — including other EquiTrust products, competing FIAs from other carriers, and simpler MYGA structures that provide guaranteed accumulation without the index-crediting complexity. The SmartBoost is a well-designed product for its specific purpose. But “well-designed” and “right for this client” are not always the same answer, and our job is to identify which one applies before any premium is committed.

If you want to understand how the SmartBoost Index compares to other annuity options at your age and premium level — or if you want us to evaluate an existing SmartBoost illustration against the broader market — the 2nd opinion annuity quote review is the right starting point. Use the income calculator above to model general income projections, and the quote request form to begin a personalized comparison.