American Equity GuaranteeShield Annuity – Secure Growth With Lifetime Protection

Yes — materially. The AM Best upgrade from A- to A in December 2024 moves American Equity into the same financial strength tier as Lincoln National, Pacific Guardian Life, and a select group of MYGA carriers with the same rating. Before the upgrade, buyers who maintained a minimum A-rating threshold as a carrier selection criterion would not have included American Equity in their comparison set. With the A rating, it qualifies alongside those alternatives. The practical difference: A (Excellent) is the third highest of 13 AM Best rating categories, reflecting AM Best’s independent assessment of American Equity’s balance sheet strength, operating performance, and business profile as materially stronger than before. For the GuaranteeShield specifically, this means the carrier financial strength backing the guaranteed rate is now assessed at a higher level than under the prior A- rating. For buyers comparing the GuaranteeShield against competing A-rated MYGAs — from Lincoln National, Pacific Guardian Life, or others at the same financial strength tier — the comparison is now carrier-equivalent in AM Best terms, and the decision reduces to rate, term, fee structure, health waiver quality, and product-specific features. The no-cost nursing home and terminal illness waivers included in every GuaranteeShield become a meaningful differentiator in this carrier-equivalent comparison — several A-rated MYGAs do not include both waivers at no cost. Reviewing the full best MYGA rates from A-rated carriers at your specific premium and term establishes where the GuaranteeShield sits in the current competitive landscape.

The GuaranteeShield’s nursing home and terminal illness waivers allow 100% of the contract value to be withdrawn without surrender charges if either qualifying event occurs — but only after the first contract year. The 1-year wait means that a qualifying event occurring in the first 12 months of the contract does not trigger the waiver — surrender charges would apply to any excess withdrawal above the standard free provision during that initial period. The practical planning guidance: if a buyer has a known health situation at the time of application that may trigger a waiver need within the first year, the GuaranteeShield is not the right product for that allocation. For buyers in good health at issue who want the waiver protection as a contingency for unexpected events during the term — the more common scenario — the 1-year wait is a minor constraint and the waivers provide meaningful coverage for the remaining duration. The nursing home confinement waiver typically requires documentation of qualifying confinement (facility type, duration of confinement, physician certification) — confirm the specific qualification requirements with American Equity or through Diversified Insurance Brokers before relying on this provision in a planning scenario. Note that neither waiver is available in California — California residents should confirm the contract provisions applicable in their state before application. For buyers evaluating how these waivers compare to dedicated LTC coverage, our resource on non-qualified long-term care annuity solutions covers the structural comparison between annuity health waivers and standalone LTC insurance products.

The 3-year vs. 5-year decision involves three elements: the current rate differential between the two terms, your planning horizon for this capital, and how you want to handle the post-maturity structure. The 5-year term typically carries a higher declared rate — the premium you accept for committing 2 additional years. In a steep yield curve environment, that rate differential may be 40–80 basis points or more, producing meaningfully more total interest over the full term. In a flat yield curve, the spread narrows and the 5-year’s additional return may not justify the longer commitment. If there is a defined event within 3 years — a Social Security claiming decision, a planned large purchase, a specific income planning milestone — the 3-year term aligns maturity with that event. One distinctive feature of the 3-year GuaranteeShield that affects this analysis: if no action is taken after the 30-day maturity window, the contract auto-continues with an annual rate guarantee and no surrender penalties. This means a buyer who doesn’t act at maturity on the 3-year version is not locked back into a new surrender period — the contract goes surrender-free. This eliminates one of the most common costly outcomes of MYGA passivity. Reviewing current 5-year fixed annuity rates alongside the current GuaranteeShield 5-year rate establishes whether the rate differential justifies the longer commitment at the time of application. Many buyers fund both terms simultaneously as a laddering strategy — capturing the 5-year rate differential on one tranche while maintaining a 3-year maturity window on the other.

The GuaranteeShield and the AssetShield 10 are built for fundamentally different buyer objectives, even though both come from American Equity and both protect principal. The GuaranteeShield is a pure MYGA: declared fixed rate, locked for 3 or 5 years, zero index exposure, no caps or participation rates, maximum simplicity. The buyer knows exactly what the accumulation value will be at maturity assuming no withdrawals — it is fully predictable. The AssetShield 10 is a 10-year fixed indexed annuity: credited interest is linked to index performance, subject to caps or participation rates that can change at renewal, with a zero floor protecting against index losses. In a strong index year, the AssetShield may credit significantly more than the GuaranteeShield. In a zero-credit year (index flat or negative), the AssetShield credits nothing while the GuaranteeShield continues crediting its declared rate. The GuaranteeShield is the right choice when the buyer wants maximum certainty about the accumulated value at a defined maturity date — no variability, no dependence on market performance. The AssetShield 10 is right when the buyer wants index-linked upside potential within a principal-protected structure and is comfortable with credit variability from year to year. The 10-year AssetShield commitment is also materially longer than the GuaranteeShield’s 3- or 5-year term — buyers with shorter planning horizons or higher near-term liquidity needs should not be in a 10-year FIA. Buyers with capital that is genuinely 10-year in character and who want index participation get access to American Equity’s full FIA product family. The GuaranteeShield for the short-duration guaranteed money, the AssetShield 10 for the longer-duration market-linked allocation — these roles can coexist within the same portfolio, with the same carrier.

The Market Value Adjustment on the GuaranteeShield applies to withdrawals above the 10% annual free provision and to full surrenders during the guarantee period. The MVA reflects the relationship between current market interest rates and the rates prevailing at contract issue. If rates have risen since the contract was purchased, the MVA reduces the surrender value — reflecting the lower market value of the underlying assets backing the contract. If rates have fallen, the MVA adds to the surrender value. The Minimum Guaranteed Surrender Value (MGSV) provides a floor: the surrender value will never be less than 90% of the original premium minus any prior withdrawals, accumulated at the minimum guaranteed interest rate. This floor means the MVA cannot reduce the surrender value below 90% of the original premium (less withdrawals) — a meaningful principal protection provision even in rising rate environments where the MVA is most adverse. For buyers who hold through the full guarantee period, neither the MVA nor any surrender charge applies — both reach zero at maturity. For buyers who need to exit early due to a qualifying health event, the nursing home or terminal illness waiver eliminates the surrender charge (not the MVA in most cases — confirm at application). For planned early surrenders due to non-qualifying circumstances, modeling the worst-case MVA impact at the time of potential exit is an important planning step. Diversified Insurance Brokers provides this illustration before any application commitment, so buyers understand what early exit costs before they commit capital.