AAA Life Annuities Review

Rating: 7.5 / 10 (Very good)
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AAA's Elite Guarantee Annuity program is an excellent tool to help supplement income in retirement. Where life insurance protects you and your loved ones if you die too soon, annuities protect you and your loved ones if your age outlasts your expected retirement plan. With an annuity, you make payments for a set period of time, gain interest, then receive the funds later in life. The funds can be doled out as monthly or quarterly payments, or even a one time lump sum. The way annuities are similar to life insurance lays in the death benefit. Like whole life insurance, regardless of when you die, your designated beneficiary will receive the remainder of the annuity payments.

The AAA Elite Guarantee Annuity is a stable, tax-deferred investment option with a guaranteed minimum interest rate so you know it will continue to earn money regardless of fluctuations in the market. Although it is a retirement strategy, savings are accessible after the first year although fees will apply. And if you are under 59 1/2 years old, IRS penalties will apply too. 

Company Reputation

AAA Life Insurance is part of the larger American Automobile Association, a company that millions of Americans recognize and trust. The company began offering life insurance policies and annuities in 1969 and is headquartered in Michigan. The company has more than 1.2 million active policies to date. AAA Life has a A+ grade with the BBB.


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Elite Guarantee Annuity

AAA's Elite Guarantee Annuity locks ina competitive interest rate for the first 3 years and can be opened with as little as $3,000. After the initial period, the interest rate will change to current interest rates declared by AAA Life. If needed, you can withdraw funds before the agreed payment date. Under the AAA agreement you can take up to 10% of the accumulated value per year, but this will be subject to fees. Also, there are additional IRS consequences if you withdraw funds prior to 59 1/2 years old. 

In the event that you die, AAA will pay your designated beneficiary the accumulated value of the annuity less any premium taxes. 

AAA Life Annuities

An AAA Life annuity can be a great addition to traditional life insurance in your retirement plan. Both include a death benefit, but an annuity covers you in case your lifespan outlasts your income. It essentially guards you and your loved ones if you outlive your assets. An annuity should only be used in lieu of life insurance if it is structured in such a way as to provide sufficient and appropriate payment to the beneficiary should the annuitant die prematurely. 

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