Is American Equity a Good Insurance Company?

American Equity Investment Life Insurance Company is a good insurance company — specifically, it is one of the largest and most recognizable fixed indexed annuity carriers in the United States, holding an AM Best Financial Strength Rating of A (Excellent) and managing over $61 billion in total assets. For buyers evaluating whether American Equity is a safe, financially capable carrier for a long-term annuity contract, the answer from independent rating agencies is affirmative. The more practical and complete question is whether a specific American Equity product — the IncomeShield, the AssetShield, or another contract in their lineup — is the most competitive option for a specific buyer’s age, premium amount, income objective, and timeline. American Equity’s competitive position is concentrated in income-focused fixed indexed annuities, particularly the IncomeShield product line, where the company has built one of the most widely distributed income rider designs in the market. Our resource on guaranteed income from annuities covers the income rider market that American Equity has built its identity around, and our resource on what is a fixed indexed annuity covers the FIA product structure that underlies all of American Equity’s core offerings.

The most significant development in American Equity’s recent history is an ownership change that every buyer evaluating the carrier should understand clearly. On May 2, 2024, Brookfield Reinsurance — a subsidiary of Brookfield Asset Management (NYSE/TSX: BN), one of the world’s largest alternative asset managers — completed its acquisition of American Equity Investment Life Holding Company in a transaction valued at $56.50 per share. American Equity now operates as a subsidiary of Brookfield Reinsurance rather than as an independent publicly traded company. The acquisition was expected by rating agencies in advance, and following its completion, S&P and Fitch upgraded the credit ratings of the holding company’s debt instruments, while the insurance subsidiary’s A (Excellent) AM Best rating was maintained. Brookfield Reinsurance stated its intention to maintain American Equity’s existing operations, distribution relationships, and brand identity. The practical implication for buyers already holding American Equity annuities or considering new ones is that the financial backing has shifted from an independent insurance company to a subsidiary of a much larger global asset manager — a structural change that is worth understanding, though the insurance regulatory framework means that policyholders’ contractual rights remain protected regardless of ownership. Our resource on state guaranty association covers the policyholder protection framework that applies at the state regulatory level regardless of carrier ownership structure.

American Equity’s product lineup is exclusively annuity-focused — the company does not offer life insurance, Medicare Supplement, or other insurance products. This makes it a specialty carrier whose entire competitive identity is built around fixed and fixed indexed annuity design, and it means any buyer evaluating American Equity is evaluating it specifically as an annuity carrier. The product most people encounter when discussing American Equity is the IncomeShield — a fixed indexed annuity with an income rider specifically designed to generate guaranteed lifetime withdrawal income during retirement. The IncomeShield’s design, its Income Account Value (IAV) mechanics, the roll-up rate that grows the IAV during deferral, and the payout rate that determines the annual income amount are the critical features to evaluate and compare before placing a premium. Our resources on what is an income annuity benefit base, what is an income annuity roll-up rate, and what is an income annuity payout rate cover the mechanics that determine what IncomeShield actually pays. Our resource on how tax deferral creates generational compounding covers the tax deferral advantage that applies across American Equity’s fixed and fixed indexed annuity products.

American Equity Product Portfolio — Competitive Position Overview

American Equity’s product lineup is focused entirely on fixed and fixed indexed annuities. The table below maps each core product against its competitive standing and key planning considerations.

Product availability, bonus percentages, cap rates, participation rates, and income payout factors vary by state, age, and premium amount and are subject to change without notice. IncomeShield products are not available in California, New York, Guam, Puerto Rico, or the U.S. Virgin Islands. All rates and product details should be verified through current carrier-specific illustrations before any purchasing decision. This table reflects general market patterns and is not a product recommendation for any specific buyer.

The Brookfield Acquisition — What Changed and What Didn’t for American Equity Policyholders

The completion of Brookfield Reinsurance’s acquisition of American Equity Investment Life Holding Company in May 2024 is the most significant structural change in the company’s history for buyers who have held American Equity annuities or are evaluating new ones. American Equity is now a subsidiary of Brookfield Reinsurance, which itself is part of Brookfield Asset Management — one of the world’s largest alternative asset management firms managing over $1 trillion in assets globally. Brookfield’s acquisition of AEL was an expansion of its insurance and reinsurance operations, which also include American National Insurance Company. Following the acquisition, S&P and Fitch upgraded the credit ratings on the holding company’s debt obligations, citing the improved financial backing of the Brookfield organization. AM Best maintained the A (Excellent) Financial Strength Rating on the American Equity Investment Life Insurance Company subsidiary. For buyers, the most practically important changes are at the ownership level — the insurance subsidiary continues to issue products under the American Equity brand name, the distribution network and advisor relationships remain in place, and the regulatory framework that protects annuity policyholders through state insurance departments and state guaranty associations continues to apply. Our resource on are annuities insured covers the full protection framework.

The Income Account Value — The Most Important Thing to Understand Before Buying IncomeShield

The IncomeShield product’s most commonly misunderstood feature is the Income Account Value (IAV) — the value that rolls up at a defined rate during the deferral period and is used as the calculation base for the guaranteed lifetime withdrawal amount. Buyers who see the IAV growing at 10% annually during deferral and assume that value represents accessible cash are making a planning error that can lead to significant disappointment at claim time. The IAV is a benefit base used only for determining the annual guaranteed income payment. It is not a surrender value, not a death benefit, and not accessible as a lump sum at any point during the contract’s life. When the income rider is activated, the guaranteed annual income amount is calculated by multiplying the IAV at activation by the payout rate — a percentage that varies by age and deferral period. The surrenderable account value — the actual cash value of the contract — grows separately through index-linked crediting, and it is the surrenderable value, subject to surrender charges in the early years, that the policyholder can access or leave to beneficiaries. This distinction matters enormously for buyers who may be considering IncomeShield as both an income tool and a legacy vehicle. Our resource on what is an income annuity benefit base covers the IAV concept specifically, our resource on how does a GLWB work covers the guaranteed lifetime withdrawal benefit structure, and our resource on do income riders have fees covers the annual rider charge that reduces the surrenderable account value while the IAV rolls up. Our dedicated product pages on American Equity IncomeShield 10 and American Equity AssetShield 10 cover the specific product details and design considerations for each product.

When American Equity Belongs in Your Plan and When to Compare Alternatives

American Equity makes the most sense for buyers whose primary planning objective is guaranteed lifetime income from a fixed indexed annuity — specifically for buyers who want to lock in income guarantees during a defined deferral window and are comfortable with the FIA structure’s index-linked accumulation potential. The IncomeShield is a purpose-built income product, and for buyers who have evaluated the IAV mechanics, understand that the income base is not a surrenderable value, and are comparing income payout factors across carriers for their specific age and deferral period, American Equity is a legitimate contender in that comparison. The AssetShield product belongs in conversations for buyers seeking principal protection with index-linked growth potential as an alternative to CDs and bonds, with the bonus as an upfront head start on accumulation. The evaluation that matters most is not the brand recognition but the current income payout factor or credited rate relative to what competing carriers offer at the same age, premium, and deferral window. Our resource on annuities for conservative investors covers the accumulation-focused product landscape, our resource on annuity surrender charges explained covers the surrender period terms that apply to American Equity’s 7- and 10-year contracts, our resource on are annuities worth it covers the broader evaluation framework, our resource on current annuity rates covers where the market stands, our resource on annuity with long-term care benefits covers the LTC benefit context relevant to IncomeShield’s Wellbeing Benefit, and our resource on get a 2nd opinion on your annuity quote covers the review process for buyers who have already received an American Equity illustration and want to validate it against the full market.