Security Benefit Strategic Growth Bonus Fixed Indexed Annuity

Jason Stolz, CLTC, CRPC, DIA, CAA, is Chief Underwriter at Diversified Insurance Brokers, and this is a contract our office places regularly enough to know precisely where its real value sits and where the marketing gets ahead of the mechanics. As an independent broker representing Security Benefit alongside dozens of other carriers, we’ll show you the actual recapture math on your specific numbers, and just as importantly, whether a non-bonus sibling product might genuinely serve you better before you commit.

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The Bonus: What It Is, and What It Isn’t Yet

Security Benefit has recently offered a double-digit premium bonus on this contract, in the low-to-mid teens. Bonus rates are declared by the carrier and change over time — confirm the current bonus before you apply, since the number you see on a marketing piece may not match what’s actually being offered when your application is submitted.

The bonus is applied to purchase payments made during the first contract year and credited to your account value immediately. That immediacy is exactly what makes the next part so easy to miss: credited is not the same as vested. This contract includes a bonus recapture provision, meaning the bonus is subject to forfeiture, in whole or in part, if you surrender or take an excess withdrawal before it has fully vested.

How Bonus Recapture Actually Works

In most states, the bonus recapture schedule holds the entire bonus at 100% recapturable through roughly the middle years of the contract — meaning if you walked away during that window, you would keep none of it. From that point forward, the recapturable percentage steps down in stages, year by year, until the bonus is fully vested and yours to keep by the end of the surrender period. A smaller number of states use a different, more gradual schedule that begins reducing the recapturable percentage earlier and more evenly across the contract term, and California’s schedule differs from both. The exact percentage tied to any specific contract year is set by your state and by the version of the contract in force when you apply, which is precisely why we pull the current schedule for your state before you sign anything rather than relying on a number from a brochure.

The plain-English version, regardless of which schedule applies to you: this bonus is a long-term retention mechanism, not a signing bonus. If there’s any realistic chance you’d need to fully surrender this contract in its early-to-middle years, the advertised bonus percentage is close to irrelevant to your actual outcome, because a full surrender during that window generally means forfeiting the bonus, paying a surrender charge, and — outside California — an MVA on top.

The Surrender Charge Runs on Its Own Schedule

Separate from bonus recapture, this contract carries its own standard surrender charge schedule, declining from a meaningful percentage in the earliest years down to zero by the end of the surrender period, with the exact percentages and pacing varying by state in the same way the recapture schedule does. A full surrender during the early-to-middle years of the contract can therefore mean absorbing three separate costs at once in most states: the surrender charge itself, the market value adjustment, and the forfeited bonus. Understanding all three as one combined exit cost, rather than evaluating any single one in isolation, is essential before assuming you understand what leaving this contract early would actually cost.

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An Illustration Worth Understanding — Not a Real Client File

We want to be direct about what this next example is: a math skeleton built from this contract’s actual, verified mechanics, not a specific client’s story. We think the concept is more useful shown in numbers than described abstractly, so here it is, clearly labeled as illustrative.

Someone rolling roughly $250,000 from a former employer’s retirement plan, at a bonus in the low-to-mid teens, would see somewhere in the neighborhood of $32,000 to $35,000 credited to their account on day one — bringing day-one account value to roughly $285,000 before a single dollar of index interest is credited. The question worth asking at that exact moment is the one most people never think to ask: when does that bonus actually become mine? In most states, the honest answer is not for years — and if this hypothetical buyer surrendered in year four, the carrier would recapture the entire bonus, apply the applicable surrender charge to the remaining account value, and apply an MVA on top. The bonus, in that scenario, was never really available to them at all.

The more useful comparison isn’t bonus versus no bonus — it’s this contract, with its bonus and 10-year commitment, against Security Benefit’s own non-bonus sibling products on shorter surrender schedules, run on the same rate sheet. What typically decides that comparison isn’t the size of the bonus. It’s genuine liquidity need: how much of this money can actually sit untouched for a decade, and how much of it might realistically be needed sooner.

The Rate Buy Up: A Real Feature With a Real Catch

Strategic Growth Plus offers an optional feature on each index crediting account called the Rate Buy Up. For a monthly charge, the Buy Up increases the cap, participation rate, or reduces the spread on that specific index account relative to the same account without it. The charge is calculated as one-twelfth of an annual Buy Up rate applied to the index account value, deducted monthly starting from the beginning of the index term, and it is not guaranteed to stay the same beyond the current index term — the carrier redeclares it before each new term, subject to a contractual maximum.

Here is the detail that gets left out of most descriptions of this feature, and it’s the single most important thing to understand before electing it: every index account still carries its standard 0% floor against negative index performance, but the Buy Up charge is deducted regardless of how the index performs. That means an index account using the Buy Up feature can actually lose value in a flat or negative index year, purely because of the ongoing charge, even though the index itself never triggered a loss. This is a meaningfully different risk than the base contract carries, and it’s worth understanding clearly before adding this feature to any allocation.

There is a partial offset built into the feature: at the end of the surrender charge period, if the total Buy Up charges deducted across the life of the contract exceed the total index interest credited across all index accounts combined — including accounts that never used the Buy Up feature — the difference is refunded to the Fixed Account, calculated as the greater of zero or that shortfall. This refund is a genuine, contractual feature, not a marketing promise, but it comes with real conditions. Taking any withdrawal above your annual free withdrawal allowance in any year of the surrender period forfeits the refund entirely, and the refund also terminates upon surrender, annuitization, or payment of the death benefit. It does survive spousal continuation, provided no excess withdrawal has occurred.

A simplified way to see the refund mechanic: if $5,000 in total Buy Up charges were deducted and $0 in index interest was credited over the same period, the full $5,000 would be refunded. If $3,000 in interest had been credited against that same $5,000 in charges, the refund would be $2,000. If $15,000 in interest had been credited against $5,000 in charges, no refund would apply, since the index interest already exceeded the charges. This is a concept illustration of the mechanism, not a projection of what any specific allocation would actually produce.

Where Security Benefit Actually Stands as a Carrier

Security Benefit currently holds an A- rating from AM Best, S&P, and Fitch, each with a stable outlook — a solid, above-threshold rating that reflects genuine financial strength. We think it’s worth being equally direct about where that rating sits relative to the broader market: A- is above the level where we’d flag real concern about a carrier’s claims-paying ability, but it is not a top-tier rating. Carriers rated A+ or A++ by AM Best sit in a meaningfully stronger tier, and a conservative buyer comparing Security Benefit against those companies deserves to know that distinction plainly rather than have every A-range rating treated as interchangeable. Third-party composite scoring tools, which blend ratings from multiple agencies into a single figure, have historically placed Security Benefit in the mid-50s range on a 100-point scale — a reasonable, if approximate, way to visualize where the company sits without treating any single number as gospel.

Security Benefit reports total admitted assets well over $60 billion, operates as a not-for-share company, and is owned by Eldridge Industries. For a deeper, standalone look at the carrier itself, our full review of whether Security Benefit is a good insurance company covers this in complete detail.

Who Strategic Growth Plus Genuinely Fits

This contract makes sense for money that is genuinely idle for the full length of the surrender period — an IRA the owner won’t touch well past the point required minimum distributions begin, or non-qualified funds earmarked for a clearly defined, decade-long horizon. It suits a buyer whose goal is maximum accumulation and who has no need for guaranteed lifetime income, since this contract doesn’t offer an income rider at all. It’s a genuine fit for someone who values real index diversification, since 42 crediting options across 12 index families is meaningfully broader than most competing bonus products offer. And it fits a buyer who understands, clearly and in advance, that the bonus is a ten-year commitment rather than a signing gift.

It fits poorly for anyone who might need more than the annual 10% free withdrawal allowance in a given year, since an excess withdrawal triggers the surrender charge, bonus recapture, and MVA simultaneously, and also permanently forfeits the Buy Up Refund for the remainder of the contract. It’s the wrong product entirely for anyone whose priority is guaranteed lifetime income — that’s a different product category altogether, both for Security Benefit and for the broader market. It’s a poor fit for anyone taking required minimum distributions large enough to exceed the free withdrawal allowance, and for anyone who isn’t genuinely prepared to stay in the contract past the point where the bonus vests in a 100%-recapture state. And it’s the wrong product for anyone assuming an A- rating and an A++ rating represent the same level of carrier strength — they don’t, and the difference is worth weighing honestly against how much the bonus itself actually matters to you.

The trade-off underneath all of this is worth stating plainly: a large upfront bonus is never free. Carriers fund it through some combination of a longer surrender schedule, a steeper surrender charge, the recapture provision itself, and generally lower caps or participation rates than the same carrier’s non-bonus sibling product offers. Comparing Strategic Growth Plus directly against Security Benefit’s non-bonus 10-year and 7-year alternatives on the same current rate sheet, rather than assuming the bonus product automatically wins, is the only way to actually know which one serves your specific goal better.

How We Help

We place this contract regularly enough to know exactly which questions matter before you sign: what your specific state’s recapture and surrender schedules actually say, whether the Rate Buy Up genuinely fits your allocation or adds a cost you don’t need, and how this bonus product actually compares against Security Benefit’s own non-bonus alternatives on the same current numbers. We’ll run that full comparison for you, using this year’s actual figures rather than a number from a flyer.

Our broader guidance on choosing the right annuity and genuine annuity suitability reflects the same principle behind every recommendation we make: the bonus is one input among several, never the deciding factor on its own. If you’re weighing this contract against a bonus product from a different carrier, our honest look at whether bonus annuities are actually a good deal is worth reading first, and if you already hold an annuity you’re reconsidering, our second-opinion review is built for exactly that conversation.

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