Corebridge Power Series Index Annuities – Lifetime Income with Market Protection

The “Power of Zero” describes the fixed indexed annuity structure’s fundamental protective mechanism: your contract value cannot decrease due to negative index performance in any crediting period. If the S&P 500 declines 30% in a given year, the Power Series contract’s credited interest for that period is zero — not negative. The accumulation value does not fall as a result of the index decline. Previously credited interest is locked in at each annual reset date through the annual reset mechanism — once credited, interest becomes protected principal that cannot be clawed back by subsequent negative index periods. This protection is provided at the contract level, backed by the claims-paying ability of American General Life Insurance Company. It is important to distinguish this principal protection from the absence of all risk: the zero floor applies to the index crediting mechanism, meaning your contract value does not decline due to market performance. Other factors — including excess withdrawals during the surrender period, applicable surrender charges, and the MVA on those excess withdrawals — can reduce the net amount received in an early exit scenario. The Guaranteed Minimum Cash Surrender Value provides a contractual floor on worst-case early surrender value: typically 87.5% of premium growing at 2.45% annually. This means that even in the most adverse scenario — zero index credits across the full surrender period combined with a surrender during the period — the owner receives at least the GMCSV, not less.

The Power Select Builder’s tiered crediting structure is one of the most distinctive features in the current FIA market. Most FIAs present a single set of caps and participation rates — you accept them or you do not. The Power Select Builder allows buyers to choose among three fee tiers: 0% (no optional enhancement fee), 1% (annual fee for higher participation rates), and 2% (annual fee for the highest available participation rates). At the 0% tier, the contract functions as a standard FIA with competitive base crediting rates and no rider fee. At the 1% tier, the owner pays an additional 1% annual fee deducted from the contract value in exchange for meaningfully higher participation rates across several strategies in the crediting menu — including Dimensional US Foundations and Invesco New Economy, where participation rates at the enhanced tiers can reach very high levels. At the 2% tier, the fees double from the 1% tier in exchange for the highest available participation rates, where some strategies can exceed 300% participation on volatility-controlled indices. The practical question for any buyer considering the enhanced tiers is whether the additional participation rate credit potential justifies the guaranteed annual fee deducted from the accumulation value. At the 1% and 2% tiers, the fee is certain and compounds against the contract value every year; the index credits are potential and depend on index performance. In strong equity or index years, the enhanced tiers can produce significantly higher credited interest that more than offsets the fee. In flat or modest years, the fee drag is the same regardless of how much credit is earned. The appropriate tier selection depends on the buyer’s expected holding period, risk tolerance for the accumulation objective, and whether the fee tiers align with their income and growth priorities.

The Power Series lineup includes products designed for two fundamentally different primary objectives, and the selection should be made based on which objective is more important rather than on which product sounds more appealing or offers the higher headline number. The income-focused product — Power 10 Protector Plus Income with the Lifetime Income Choice rider — provides a 9% simple annual roll-up on the income base, a guaranteed income stream that continues for life even if the contract value depletes to zero, and the confidence of knowing what the income amount will be at any future income activation date. The tradeoff is that the S&P 500 cap on the Power 10 Protector is meaningfully lower than what accumulation-focused FIAs offer, because the carrier is allocating a significant portion of its option budget to fund the income base guarantee. The Power Select Builder — the accumulation-only product with the tiered crediting menu — offers none of the income guarantee, but offers substantially more aggressive index crediting potential at the 0% tier (no rider fee) and enhanced-tier options with participation rates that exceed most of the FIA market. For a client who wants guaranteed lifetime income and plans to activate income within 5–10 years, the Power 10 Protector’s 9% roll-up is one of the strongest guaranteed income building tools available from an A-rated carrier. For a client whose primary objective is growing contract value for eventual legacy transfer, income via annuitization at a later date, or repositioning into a different vehicle at the end of the surrender period, the Power Select Builder without the income rider fee will typically produce a higher accumulation value. Most clients fall clearly into one camp or the other — and a side-by-side illustration at current rates for both products at your specific premium, age, and anticipated income activation age is the most reliable way to confirm which produces the best outcome for your specific situation.

The 9% simple roll-up on the Power 10 Protector Plus Income’s Lifetime Income Choice rider is a guaranteed, contractually defined growth rate on the income base — not on the accumulation value. To understand this distinction: the income base (sometimes called the benefit base) is a separate calculation value used exclusively to determine the size of the lifetime income payment. It is not money you can withdraw as a lump sum, not a cash value you own, and not the death benefit. The income base starts at the contract premium and grows by a guaranteed 9% of the original premium value each deferral year — this is “simple” roll-up, meaning the 9% is applied to the original (or a defined starting) base rather than compounding on top of previously credited roll-up amounts. In contrast, compound roll-up rates apply the percentage to the full growing income base each year. Over short deferral periods (5 years or less), a 9% simple roll-up and a well-structured compound roll-up at a similar rate produce comparable income base values. Over longer deferral periods (10+ years), a compound roll-up at the same percentage would produce a significantly larger income base than a simple roll-up. The 9% simple roll-up is guaranteed regardless of how the market index performs — if the S&P 500 is flat for 5 years, the income base still grows by 9% of the original base each year. The rider fee of 1.10% of the income base is deducted annually from the accumulation value, meaning as the income base grows through the roll-up, the dollar amount of the fee also increases. When income is eventually activated, the guaranteed lifetime income payment is the income base at activation multiplied by the applicable payout percentage for the owner’s age at income start.

This is one of the most commonly misunderstood aspects of income FIAs, and it is particularly important to understand on the Power Series contracts. The death benefit payable to beneficiaries is the accumulation value — the actual money in the contract — not the income base. The income base under the Lifetime Income Choice rider may be substantially higher than the accumulation value after several years of 9% roll-up growth, especially relative to an accumulation value that has been partially drawn down by the 1.10% annual rider fee. But the income base cannot be passed to beneficiaries as a lump sum — it exists solely to calculate the guaranteed lifetime income payment. When the contract owner passes away, beneficiaries receive the accumulation value at that time, with surrender charges waived. Any positive MVA is also added to the death benefit. The practical implication: for clients who are primarily concerned with legacy transfer and want to pass the maximum possible value to heirs, the income rider’s benefit base growth should not factor into legacy planning — the only relevant figure is the accumulation value. Clients who want both guaranteed lifetime income and meaningful legacy value should evaluate whether a combination approach — using a Power Series income product for the income function alongside a separate life insurance policy for the legacy function — better serves their dual objectives than trying to accomplish both within a single annuity contract.

In March 2026, Corebridge Financial announced a merger with Equitable Holdings — a combination of two major insurance and financial services companies. As of the time of this writing, the merger is pending regulatory approval and has not yet been completed. For existing Power Series owners, the key legal and contractual reality is that annuity contracts are issued by American General Life Insurance Company, which is the legal entity responsible for all financial and contractual obligations under those contracts. Insurance mergers and acquisitions do not change the terms of existing contracts — policy obligations are not renegotiated as part of a corporate merger, and state insurance regulators closely supervise any transaction to ensure policyholder protections are maintained. The combined entity, if the merger completes, would create one of the largest life insurance and annuity organizations in the United States, which would generally strengthen rather than weaken the capital resources available to support annuity guarantees. For prospective buyers considering a Power Series contract, the merger announcement is worth noting — but it does not change the current product availability, the current carrier financial strength rating (AM Best A, S&P A+), or the specific terms of contracts issued under current product forms. We will continue to monitor the merger timeline and any developments that affect the issuing carrier’s financial profile or product lineup.

The Power Series nursing home waiver is one of the most comprehensive available in the FIA market: it is a full waiver, not a partial-access provision. If the contract owner is confined to a licensed nursing facility for at least 90 consecutive days after the first contract year, all surrender charges and the MVA are waived, and the owner may withdraw up to 100% of the account value without penalty. Many competing FIA products limit the nursing home waiver to a partial amount — allowing 50% or 25% of the account value without penalty, or removing only the surrender charge while the MVA still applies. The Corebridge Power Series waiver removes both the surrender charge and the MVA, and provides access to the full 100% of the account value. The terminal illness waiver applies on the same terms after year one. Both waivers are built into the contract at no additional cost — they are not optional riders that must be elected and paid for. This comprehensive waiver design, combined with the carrier’s A (Excellent) AM Best rating and 100+ year operating history through American General Life, makes the Power Series health event protection among the strongest in the A-rated FIA category. For clients who have elevated care cost concerns and want meaningful liquidity under those scenarios alongside a major-carrier FIA commitment, the Power Series waiver structure is a genuine differentiator.

The Power Series includes both standard benchmark indices (S&P 500, Russell 2000, MSCI EAFE) and several proprietary volatility-controlled indices, including the Franklin Quality Dividend Total Return 5% Index, ML Strategic Balanced Index, PIMCO Global Optima Index, Dimensional US Foundations, and Invesco New Economy. These proprietary indices share a common design philosophy: they use algorithmic mechanisms to target a defined annual volatility level, typically between 5% and 12%. When market conditions become more volatile, the index’s allocation to equity shifts toward cash or lower-volatility assets. When volatility is low, the index allocates more aggressively toward equities. The result is a smoother return profile compared to the uncontrolled S&P 500 — fewer extreme zero-credit years, but also lower peak credits in exceptionally strong equity years. The participation rates available on these volatility-controlled strategies are often much higher than the cap rates available on the S&P 500 strategy in the same contract, which can be misleading if interpreted naively. A 200% participation rate on a volatility-controlled index that targets 5% volatility may produce similar or lower credited interest compared to a 20% cap on the uncontrolled S&P 500 in a strong equity year, because the volatility-controlled index’s equity exposure is constrained. The appropriate way to evaluate these strategies is through historical backtesting of each specific index alongside projected future crediting scenarios — not through headline participation rate comparisons. A personalized illustration from Diversified Insurance Brokers that shows multiple crediting scenarios across strategies is the most reliable tool for evaluating how different strategy allocations might perform for your specific premium and deferral period.