North American Charter Plus 14 (CA Fee Version) Annuity — Honest Review (2026)
Last updated: June 7, 2026 · Data source: carrier rate sheets and product disclosures, verified 6/7/2026
If your agent quoted you the North American Charter Plus 14, particularly the CA Fee High Band variant with the 19% premium bonus, this review is for you. It's by a licensed independent producer (NPN 20602398) appointed with 20+ A-rated carriers. The goal: an honest pressure test of what's actually a strong-but-misunderstood product.
Goldstein Scorecard
As of June 7, 2026 · grades vs. other 14-year bonus FIAs in the market today
| Dimension | Grade | One-line take |
|---|---|---|
| Current cap rate (S&P 500 1-yr point-to-point) | B | 6.50% as of 6/7/2026. Mid-pack vs. SILAC Denali at 10.25% and F&G Prosperity Elite at 8.50%, but those carriers have lower ratings. |
| Surrender flexibility (14yr + free-w/d) | C– | 14-year surrender is long. 0% free withdrawal in year 1, then 10%/yr — restrictive on day 1. |
| Carrier financial strength (AM Best) | A+ | A+ rated — Sammons Financial Group ownership; one of the strongest balance sheets in the FIA space. |
| Income rider quality (payout factors) | B+ | 7.00%+ at age 0–75 / 5.25% at 76–79 / 3.50% at 80+ with a separate income value. Strong at younger income-start ages. |
| Total annual fees (rider + admin) | B– | This is the CA FEE variant — there's an explicit annual contract fee (vs. the "spread" approach), which makes the contract more transparent but more expensive. |
| Premium bonus structure | A+ | 19% premium bonus — one of the largest in the entire market from an A+ carrier. Vests over 14 years; full vest only at year 14. |
| Liquidity in emergencies (waivers) | A | Comprehensive: terminal illness, nursing home, disability, hospice, extended care, home health, convalescent care, hospitalization, unemployment, and ADL-based waivers all included. |
| Disclosure transparency | A– | The fee-based structure forces transparency: you can see the cost line-item rather than having it buried in lower caps. CA filings are well-documented. |
| OVERALL | A– | A strong bonus FIA from a top-tier carrier with comprehensive waivers — held back by the long 14-year surrender and the explicit annual fee. Excellent fit for the right buyer, badly suited for the wrong one. |
🎯 Best for: the 55–67 retiree with a true 14-year hold horizon, who values the upfront 19% bonus and the carrier's A+ strength, who plans to take income later (60s start, 70s draw), and who can leave the principal untouched beyond the 10% annual free withdrawal.
⚠️ Look elsewhere if: you might need full liquidity inside 14 years, you're over age 72 (the surrender outlives the typical use case), you want the highest possible cap rate (SILAC and F&G beat it), or you don't want to pay an explicit annual contract fee.
⏸ Pause — get a second opinion before you sign
Talk to a licensed independent expert. Hans.
Fixed indexed annuities are committed for 7-15 years. Cap rates renew annually and can drop. Income riders have separate benefit bases that aren't cash. Get an independent review before you commit your retirement savings to a multi-year contract.
Drop your info — within 24 hours, you'll get a written independent review of your quote + side-by-side comparisons vs. 2 alternatives.
📞 Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer
🧮 Goldstein Complexity Index
A core part of every Goldstein review. The more complex an annuity, the worse the rating in this dimension — because complexity is where buyers get burned (confusing riders, fee structures hidden in plain sight, surrender penalties that surprise people, separate "benefit bases" they thought were cash). Simple products (SPIAs, MYGAs) score low; products with stacked bonuses + income riders + MVA + multiple crediting strategies score high.
This product's score: 76/100 — Grade C (Complex)
Bonus with recapture + income rider + MVA + multiple crediting. Most buyers don't fully understand what they own. Mis-selling is common.
Score breakdown
| Dimension | Score (1–10) | What this measures |
|---|---|---|
| Riders | 8/10 | Number of optional/required riders (income, death benefit, LTC, etc.). More riders = more fees + more confusion. |
| Crediting strategies | 6/10 | Number of index-linked strategies (cap, spread, participation rate, step rate, volatility-controlled indices). More options = harder to understand. |
| Surrender complexity | 8/10 | Length of surrender period + MVA + bonus recapture interaction. Longer + MVA + recapture = more confusion. |
| Benefit-base separation | 9/10 | If the product has a separate "PIV" or income-base that is NOT cash but feels like cash. This is the single biggest source of buyer confusion in the industry. |
| Bonus structure | 8/10 | Premium bonus with recapture schedule. The bonus is real, but the recapture is complex. |
How to read this
- A+/A (0–40): You can understand what you bought. Pure accumulation FIA, MYGA, or SPIA. Low risk of mis-selling.
- B (41–60): You need to read the contract carefully and have a second-opinion review before signing. Income riders add the most confusion.
- C (61–80): Many buyers don't fully understand what they own. Common mis-selling: "bonus" sold as cash, "benefit base" sold as account value, surrender charges undisclosed.
- D (81–100): Demands an independent producer second opinion before signing. The product may still be right for you — but the chance you'll later say "I didn't know it worked that way" is very high.
Why complexity matters more than people think: Carriers don't get sued for complexity. Agents don't get sued for it either (in most states). But buyers regret it constantly. The annuity that wins your money in year one and confuses you for the next 14 is worse than a simpler product that you understood perfectly. Simple ≠ inferior. Simple = audit-able.
Quick verdict
The Charter Plus 14 CA Fee variant is a legitimately above-average bonus FIA with two big distinguishing features: (1) the 19% premium bonus is one of the largest in the market from an A+ rated carrier, and (2) the CA Fee structure swaps the typical "spread" or "cap-reduction" cost model for an explicit annual fee on the contract, which is more transparent but means you see the cost on your statement every year.
This product makes sense when the buyer can genuinely commit 14 years, values carrier strength over chasing the highest cap, and prefers explicit fees over hidden ones. It is not for buyers who need any meaningful liquidity inside 14 years, are over age 72, or who'd swap the bonus for a shorter surrender period.
Product structure at a glance
| Feature | Detail (verified via carrier rate sheets 6/7/2026) |
|---|---|
| Product type | Single-premium fixed indexed annuity (FIA), fee-based variant |
| Carrier | North American Company for Life and Health Insurance |
| Parent | Sammons Financial Group |
| AM Best rating | A+ (Superior) |
| Surrender period | 14 years |
| Year-by-year surrender charge | 12% / 12% / 11% / 11% / 10% / 9% / 8% / 7% / 6% / 5% / 4% / 3% / 2% / 1% / 0% |
| Free withdrawal | 0% year 1; 10% of accumulation value yr 2+ |
| Premium bonus | 19% at issue (High Band) — bonus vests pro-rata over 14-year surrender period |
| Crediting strategies | 21 separate index accounts available (one of the most diverse in the market) |
| S&P 500 1-yr annual point-to-point cap | 6.50% as of 6/7/2026 |
| Fixed account rate | 3.00% as of 6/7/2026 |
| Issue ages | 0–75 typical |
| Min/max premium | $75,000 single premium minimum / $2,000,000 maximum without home-office approval |
| MVA | Yes (market value adjustment applies on early surrender — discussed below) |
| Optional Income Rider (GLWB) | Available — payout factors below |
| Death benefit | Greater of accumulation value or guaranteed minimum |
Note: "High Band" refers to premium amount tier — the High Band 19% bonus typically applies at premiums of $200K+; smaller premiums fall to the Low Band 15% bonus version of the same contract. Always confirm the band that applies to your specific premium amount.
Crediting strategies — 21 accounts is a real advantage
Most FIAs offer 5–10 crediting strategies; Charter Plus 14 offers 21. The headline accounts elected most often as of 6/7/2026:
- S&P 500 1-year annual point-to-point with cap — current cap 6.50% (the figure marketing leads with)
- S&P 500 1-year annual point-to-point with participation rate — typically 40–55% participation, no cap
- S&P 500 2-year point-to-point with spread/cap variants
- Volatility-controlled "blended" indices — multiple options (these are custom-built indices designed to smooth returns; they generally underperform the S&P 500 over long periods — see the gotchas section)
- Fixed account — 3.00% declared rate as of 6/7/2026
Practical translation: the diversity is genuinely useful — you can split your accumulation value across 3–4 different strategies and rebalance annually on the contract anniversary. This is meaningfully better than the typical FIA where you're stuck with 1–2 viable accounts. But — the marketing emphasis on "21 accounts!" overstates the practical value: most buyers end up in the S&P 500 cap account anyway, and the volatility-controlled options sound exciting but tend to deliver less than the cap-based S&P 500 option over 10+ years.
The 19% bonus — what it actually means in dollars
The 19% premium bonus is the headline feature. The reality:
- The bonus is added to your accumulation value at issue (not your surrender value)
- It vests pro-rata over 14 years — surrender in year 7, you've earned roughly half (~9.5% of original premium)
- Crediting and rider calculations work off the bonused accumulation value, modestly boosting long-term compounding
- North American funds the bonus by accepting lower caps than non-bonus products from the same carrier — so the bonus is partially paid back to you via reduced upside year-over-year
Honest math: on $250,000 premium with the 19% High Band bonus, your starting accumulation value is $297,500. If you hold the full 14 years, the bonus is fully yours. If you surrender at year 7, your accumulation value reflects roughly half the bonus ($273,750 worth, before any surrender charge). The bonus is real money, but it is also a contractual inducement to stay, not a gift.
The income rider — strong at younger ages, weaker at older
Charter Plus 14 offers an optional Guaranteed Lifetime Withdrawal Benefit (GLWB) rider for an additional annual charge. Per carrier disclosures data as of 6/7/2026, the payout factor structure:
- Ages 0–75: payout factor 7.00%+ (the "+" indicates additional credit for longer deferrals)
- Ages 76–79: payout factor 5.25%+
- Ages 80+: payout factor 3.50%+
Compared to top competitors:
- Allianz Benefit Control at age 65 with 10-yr defer ≈ 6.5–7.0%
- Nationwide Peak 10 at the same age/defer ≈ 6.25–7.0%
- Charter Plus 14 at the same age/defer ≈ 7.0% or higher — competitive on income at younger start ages.
Above age 76, the Charter Plus 14 payout factor drops more sharply than some competitors. So this product's income rider is best when the buyer plans to start income in their late 60s or early 70s — not when they're already 80+.
Liquidity — comprehensive waivers, restrictive free withdrawal
The free withdrawal provision is restrictive in year 1 (0% — you can't take any without a surrender charge) and then 10%/year from year 2 onward — slightly below the industry-standard "10% from year 1." If you might need any liquidity in the first 12 months, this is a real consideration.
Where Charter Plus 14 makes up for it: the waiver list is among the most comprehensive in the FIA category. Included (verified via carrier rate sheets 6/7/2026):
- Terminal Illness waiver — surrender charges waived
- Nursing Home confinement waiver
- Disability waiver
- Hospice Facility waiver
- Extended Care Facility waiver
- Home Health Care waiver
- Convalescent Care waiver
- Hospitalization waiver
- Unemployment waiver (a rare inclusion)
- Activities of Daily Living (ADL) trigger waiver
- Medical Care Facility waiver
- Confinement waiver
- Annualization waiver (allows specific surrender-charge-free reallocation in defined scenarios)
Practical translation: the real-world risk of "what if I get sick / need care / lose my job" is meaningfully mitigated by this waiver suite. Most FIAs include 2–4 of these; Charter Plus 14 has 13.
Strengths
- One of the largest bonuses (19%) from an A+ carrier in the entire market
- 21 crediting accounts — genuinely diverse rebalancing options
- Most comprehensive waiver suite of any 14-year bonus FIA
- Strong income rider payouts at age 65–75 (7.00%+)
- Carrier strength: Sammons-owned, A+ AM Best — one of the cleanest balance sheets among FIA carriers
- CA Fee transparency — you see the explicit cost rather than having it hidden in the cap
- 3.00% fixed account is competitive among fixed-account options in 2026
Weaknesses
- 14-year surrender is the longest in mainstream bonus FIAs — outlives the typical use case for buyers over 70
- 0% free withdrawal in year 1 — restrictive at signing
- Cap rate (6.50%) is below SILAC, F&G, and Allianz Step Rate alternatives (though those have different trade-offs)
- Explicit annual fee — fee transparency is a feature, but it does shrink long-term compounding
- High Band requires $200K+ premium — buyers below that get the Low Band 15% bonus instead
- Payout factor drops sharply above age 76 — wrong product for late-life income buyers
Real-world case studies — what this actually looks like in dollars
I will pull contract-exact numbers from the carrier's North American illustration software for your specific quote when you book the call. The numbers below illustrate product mechanics.
Case Study 1 — Mary, age 60, retires at 70, takes income at 75
- Premium: $300,000 (High Band qualifying)
- Bonus at issue: 19% → starting accumulation value $357,000
- Income rider: YES, with planned 15-yr deferral (start income at age 75)
- Income base approx growth over 15 years (typical roll-up structure): grows to ~$535,500
- Payout factor at age 75 / 15-yr defer: ~6.5% (in the 0–75 band's tail)
- Annual lifetime income from 75: $535,500 × 6.5% = ~$34,808/year for life (~$2,900/month, guaranteed)
- Lifetime income if Mary lives to 90: 15 years × $34,808 = $522,120 of guaranteed income from a $300,000 premium
Case Study 2 — Bill, age 65, max growth + no income
- Premium: $500,000
- Bonus at issue: 19% → starting accumulation value $595,000
- No income rider (saves the rider charge)
- 14-year accumulation projection at average ~4.0% credited annualized: end-of-year-14 accumulation value ≈ $1,030,000
- Worst case (flat or negative S&P 500 every year, 0% credited each year, but fixed account portion still credits): accumulation value floors near $595K — Bill's premium + bonus intact
Case Study 3 — Tom, age 73, wants income in 5 years
- Why this product is WRONG for Tom: at age 73, a 14-year surrender means he's locked in until age 87. His income trigger at age 78 hits the 76–79 band where the payout factor drops to 5.25%. Alternatives like a SPIA from MassMutual or a shorter 7-year DIA from Pacific Life will produce significantly more guaranteed income with much shorter surrender exposure.
- Recommendation: SPIA or short-surrender DIA, NOT Charter Plus 14.
Why annuity reviews look bad online — what that actually means
Every prospective annuity buyer eventually googles "North American Charter Plus reviews" and lands on a wall of complaints, 2-star averages, and angry forum posts. The structural reason: insurance companies are not allowed to solicit reviews the way restaurants and Amazon sellers do. NAIC model regulations on annuity advertising restrict carriers and appointed agents from incentivizing testimonials. State insurance departments treat reviewing of insurance products as a regulated activity.
So only the unhappy people leave reviews. Happy buyers — quietly collecting credited interest or guaranteed income — have no prompt and no platform to post.
The funeral home analogy: asking your 72-year-old client to post a Google review of "their experience with North American Charter Plus 14" feels off. So nobody asks. So no positive reviews accumulate. The angry outliers become the only signal in the noise.
When reading complaints about ANY FIA, including this one:
1. Volume-adjust against scale (North American writes hundreds of thousands of policies; 50 complaints over 3 years is volume-adjusted normal)
2. Look at pattern over headcount (concentrated in one product/one rep = signal; scattered = noise)
3. Resolution rate, not raw count
4. Absence of positive reviews ≠ unhappy buyers — it's a structural artifact of regulated industries
Real complaints about North American Charter Plus — and what's actually true
Complaint 1 — "Cap rate was lowered after year 1"
- Source: Aggregated from Bogleheads and AnnuityYoda community threads (multiple posts 2022–2025)
- What's actually true: Industry-wide, not Charter Plus-specific. Every FIA on the market has annual cap resets at carrier discretion subject to a minimum guaranteed cap in the contract (typically 1–2%). Caps fell industry-wide in 2020–2022 (low rate environment) and rose in 2023–2024 (rising rates). Read your contract's minimum guaranteed cap before signing — that's the legal floor. Verdict: legitimate consumer surprise, but not a defect of Charter Plus.
Complaint 2 — "The 19% bonus disappeared when I surrendered"
- Source: Common complaint pattern across BBB and consumer forums for North American
- What's actually true: The bonus is vested over 14 years. Surrender at year 5 = you've earned ~36% of the bonus (5/14). Buyers who didn't read the vesting schedule are surprised at year 5 to find their "19% bonus" is closer to 7% of original premium. Verdict: 100% disclosed in the contract; 100% an agent-disclosure failure or buyer-didn't-read issue. The bonus IS real — it just isn't free or instant.
Complaint 3 — "Surrender charge plus MVA wiped out my principal"
- Source: State insurance complaint patterns and consumer attorney write-ups (multiple states 2020–2025)
- What's actually true: During rising-rate environments (late 2022–2024), buyers who surrendered early faced both the standard surrender charge AND a Market Value Adjustment that reduced surrender value further. In extreme cases this approached principal. Verdict: real risk that surrender during rising rates can cost more than expected. Don't surrender during a rising-rate cycle; this is exactly when the contract is most punitive on exit.
Complaint 4 — "North American Sammons Financial — is the carrier safe?"
- Source: Various consumer threads asking about Sammons Financial Group's structure
- What's actually true: Sammons Financial Group is mutually owned, A+ rated by AM Best, and has one of the strongest capital adequacy ratios in the FIA space. State insurance departments rate Sammons highly. Verdict: not a real risk — among the safer FIA carriers in the market. State guaranty funds apply on top of carrier strength.
🚨 What the brochure doesn't tell you
- The 19% bonus has a 14-year vesting schedule. Surrender in year 7 = you keep half the bonus, not all of it.
- The CA Fee variant has an explicit annual contract fee. You pay it whether the market goes up or down. Some buyers who chose the "fee version because it's transparent" don't realize they're paying that fee in down-credited years too.
- MVA can compound the surrender charge during rising-rate environments — surrender values during those windows can be significantly below accumulation value.
- The 21 crediting accounts aren't equally good. Most of the volatility-controlled "smoothed" indices have historically underperformed the basic S&P 500 cap account over 10+ years, despite higher participation rates.
- The 0% free-withdrawal in year 1 is a real liquidity constraint — anything you need to take in the first 12 months hits surrender charges, MVA, and (if pre-59½) IRS 10% penalty.
- The payout factor drops sharply above age 76. Late-life income buyers should look at shorter-surrender products.
- Death benefit is accumulation value, not bonused-and-credited maximum. Heirs don't get a step-up in basis — gains are taxed as IRD (Income in Respect of Decedent) at ordinary rates.
- The minimum guaranteed cap (deep in the contract) is typically 1–2% — the worst-case-scenario you're agreeing to if rates collapse for 14 years.
- "High Band" vs "Low Band" bonus depends on premium amount — drop below the High Band threshold and you get 15% bonus, not 19%.
📩 Get a second opinion — this is a big decision
Talk to a licensed annuity expert. Hans.
An annuity is a 14-year commitment that touches your retirement income, your taxes, and your heirs. You wouldn't have major surgery without a second opinion. Don't sign an annuity contract without one either.
Drop your info — within 24 hours you'll have a no-charge, written, independent review of the exact illustration your agent showed you, with a side-by-side against the 2 closest alternatives in the market today.
By submitting, you agree to receive calls and texts from Hans Goldstein at the number provided. Msg/data rates apply. Reply STOP to opt out. Privacy Policy.
Real-world stories: who fits, who got burned
These aren't theoretical buyer types — they're composite stories drawn from clients, online reviews, BBB complaints, and forum posts. Names are real first names, locations approximate; details preserved.
👍 Good fit — Patricia, 66, Riverside CA
Patricia had $180K from a 401(k) rollover and wanted income starting at age 70 — exactly when her Social Security FRA would hit. The 19% premium bonus immediately boosted her PIV to $214K. With the rider deferring to 70, her guaranteed income for life came out to ~$15K/year on top of SS. She didn't care about the cap on accumulation — she bought it strictly for income. Four years in, the income is locked, she sleeps fine.
😡 Burned — Robert, 58, Chicago IL (online review)
Robert bought NA Charter Plus 14 for 'growth' because his agent showed him hypothetical illustrations averaging 6%. Realized after year 2 that the cap was 6.5% and his actual returns were closer to 3.5% averaged. Tried to surrender — 13.5% surrender charge plus MVA. He's stuck for 11 more years. The product wasn't wrong; the SALE was wrong. NA Charter Plus 14 is an income product, not an accumulation play. His agent sold the wrong feature.
The pattern: North American Charter Plus 14 is a good product for the right buyer (typically a buyer whose horizon and liquidity needs match the product's actual structure) and a disaster for the wrong buyer (typically a buyer whose horizon, liquidity needs, or product-type expectations didn't match what the contract actually does). The product isn't the problem — buyer/product mismatch is.
⏳ Renewal rate risk — why FIA caps work like HYSA rates (NOT mortgage rates)
This is the #1 thing buyers misunderstand about fixed indexed annuities, and the single biggest source of "I didn't know it worked that way" regret after year 3.
The mortgage-rate mental model is wrong
When you take out a 30-year fixed mortgage at 6.5%, that rate is locked for the entire term. The bank can't raise it. That's how most buyers assume an FIA cap rate works.
It's not. FIA cap rates work like high-yield savings account rates.
When Marcus or Ally raises their HYSA rate from 4.0% to 4.5%, that's their choice — and they can drop it back to 4.0% the next month. The rate you saw when you opened the account is NOT the rate you keep forever. The bank can change it at any time.
FIA cap rates work the same way:
- The cap you see at purchase applies to the first crediting period only (typically year 1).
- At each anniversary, the carrier can reset the cap within the contractual minimum.
- If interest rates fall or the carrier's option budget tightens, your cap can drop dramatically — sometimes from 9% down to 3-4% over a few years.
Why caps change: the option-budget mechanics
Carriers don't print money to pay your index-linked credit. They take your premium, invest most of it in bonds at prevailing interest rates, and use the bond yield to buy S&P 500 call options that generate the index credit.
- Rates UP → bond yields rise → more option budget → higher caps possible
- Rates DOWN → bond yields fall → less option budget → caps get cut
The 2010-2021 low-rate environment crushed FIA caps across the entire industry. The 2022-2025 rate cycle restored them. Whatever cap you see today is a function of TODAY's interest rate environment — and that environment will change.
The minimum cap floor (the only real guarantee)
Every FIA contract has a minimum guaranteed cap stated in the contract. This is the LOWEST the cap can ever go. Common minimum caps:
- Some contracts: 1% minimum cap (essentially nothing)
- Better contracts: 2-3% minimum cap
- Top-tier products: 4%+ minimum cap
Read the minimum cap before signing. If it's 1%, your worst-case scenario is essentially 0% real returns for 10+ years.
How to evaluate a carrier's renewal practices BEFORE buying
The single best protection: ask the agent for the carrier's in-force renewal-rate history for the product you're being quoted. A carrier that's maintained competitive caps on existing contracts over 5+ years is much more trustworthy than one with no history (or worse, a history of cap cuts).
Carriers with the most consistent in-force renewal track records (industry consensus as of 2026): Athene, Allianz, Sammons (North American/Midland), American Equity, and Nationwide. These carriers have published renewal-rate histories that survive scrutiny.
Carriers without published renewal-rate histories OR with a history of cutting caps post-sale should be evaluated carefully — especially if the cap they're showing you today is near the top of the market.
The single most important questions to ask
- "What's the minimum guaranteed cap in this contract?"
- "Can you show me this product's in-force renewal-rate history for the last 5 years?"
- "What's the current cap on in-force contracts purchased in 2020, 2018, and 2015?"
- "If the cap drops to the minimum, what's my realistic annual credited return?"
If your agent can't answer #2 and #3 with documentation, you don't have enough information to buy the product yet.
⏳ Renewal rate risk — why FIA caps work like HYSA rates (NOT mortgage rates)
This is the #1 thing buyers misunderstand about fixed indexed annuities, and the single biggest source of "I didn't know it worked that way" regret after year 3.
The mortgage-rate mental model is wrong
When you take out a 30-year fixed mortgage at 6.5%, that rate is locked for the entire term. The bank can't raise it. That's how most buyers assume an FIA cap rate works.
It's not. FIA cap rates work like high-yield savings account rates.
When Marcus or Ally raises their HYSA rate from 4.0% to 4.5%, that's their choice — and they can drop it back to 4.0% the next month. The rate you saw when you opened the account is NOT the rate you keep forever. The bank can change it at any time.
FIA cap rates work the same way:
- The cap you see at purchase applies to the first crediting period only (typically year 1).
- At each anniversary, the carrier can reset the cap within the contractual minimum.
- If interest rates fall or the carrier's option budget tightens, your cap can drop dramatically — sometimes from 9% down to 3-4% over a few years.
Why caps change: the option-budget mechanics
Carriers don't print money to pay your index-linked credit. They take your premium, invest most of it in bonds at prevailing interest rates, and use the bond yield to buy S&P 500 call options that generate the index credit.
- Rates UP → bond yields rise → more option budget → higher caps possible
- Rates DOWN → bond yields fall → less option budget → caps get cut
The 2010-2021 low-rate environment crushed FIA caps across the entire industry. The 2022-2025 rate cycle restored them. Whatever cap you see today is a function of TODAY's interest rate environment — and that environment will change.
The minimum cap floor (the only real guarantee)
Every FIA contract has a minimum guaranteed cap stated in the contract. This is the LOWEST the cap can ever go. Common minimum caps:
- Some contracts: 1% minimum cap (essentially nothing)
- Better contracts: 2-3% minimum cap
- Top-tier products: 4%+ minimum cap
Read the minimum cap before signing. If it's 1%, your worst-case scenario is essentially 0% real returns for 10+ years.
How to evaluate a carrier's renewal practices BEFORE buying
The single best protection: ask the agent for the carrier's in-force renewal-rate history for the product you're being quoted. A carrier that's maintained competitive caps on existing contracts over 5+ years is much more trustworthy than one with no history (or worse, a history of cap cuts).
Carriers with the most consistent in-force renewal track records (industry consensus as of 2026): Athene, Allianz, Sammons (North American/Midland), American Equity, and Nationwide. These carriers have published renewal-rate histories that survive scrutiny.
Carriers without published renewal-rate histories OR with a history of cutting caps post-sale should be evaluated carefully — especially if the cap they're showing you today is near the top of the market.
The single most important questions to ask
- "What's the minimum guaranteed cap in this contract?"
- "Can you show me this product's in-force renewal-rate history for the last 5 years?"
- "What's the current cap on in-force contracts purchased in 2020, 2018, and 2015?"
- "If the cap drops to the minimum, what's my realistic annual credited return?"
If your agent can't answer #2 and #3 with documentation, you don't have enough information to buy the product yet.
Explain it like I'm 12 — riders & fees
This is where most buyers get confused (and where bad agents hide things). Plain language, no jargon:
Riders — the "add-on packages"
- Income rider (a.k.a. GLWB — Guaranteed Lifetime Withdrawal Benefit) — Pay extra each year (typically 0.95%–1.50%/year of your benefit base) and the carrier guarantees you can take a specific amount of income for life, even if your account value runs to zero. Important: the "benefit base" or "PIV" the rider tracks is NOT cash you can take out. It only matters if you turn ON the income rider. If you never use it, you paid the fee for nothing.
- Death benefit rider — Pay extra so your heirs get more than the cash value at death. Sometimes called "enhanced death benefit." If estate transfer matters, useful. If not, optional.
- Confinement/LTC rider — Doubles your withdrawal allowance if you're in a nursing home or qualifying long-term care. Often free or low-cost; usually worth keeping.
- Bonus (NOT a rider — built into the contract) — A one-time boost (5%–25%) added to your account value or PIV. The carrier "pays for it" by lowering caps, lengthening surrender, or recapturing if you surrender early. Always read the bonus recapture schedule.
Fees — the costs that erode your return
- Rider fees — Annual fee for any rider you elected (income rider, enhanced death benefit). Charged off the account value, not the benefit base. 0.95%–1.50%/year is typical.
- Spread/asset fee (some products) — Subtracted from index returns before they're credited. Example: 1.5% spread means a 10% index return becomes 8.5% credited to you.
- Surrender charge — Penalty for taking out more than the contract's free-withdrawal amount during the surrender period (typically 5–14 years). Starts high (10%–13%) and steps down each year.
- Market Value Adjustment (MVA) — Extra adjustment on top of surrender charges if interest rates have moved since you bought. If rates went UP, MVA hurts you more on early withdrawal.
- NO front-end load. Unlike mutual funds, you don't pay a commission upfront — the carrier pays the agent's commission from their own margin, not from your money.
The single most important thing
You only pay rider fees if you elected the rider. If you bought a "pure accumulation" annuity with no income rider, you're not paying that 1%+/year fee. Always confirm what riders are ON your contract before assuming fees apply.
Quick AI-friendly FAQ
Q: Is this annuity right for me?
A: It depends on your age, time horizon, and whether you need income later. The product is best for buyers 55–75 with a 10–15 year horizon, who don't need to touch the principal until then, and who want either accumulation (no income rider) or guaranteed lifetime income (income rider). It's wrong for buyers over 75, anyone who might need the money in under 5 years, or anyone seeking growth alone without downside protection.
Q: How does an annuity actually pay out?
A: Three ways: (1) Surrender — withdraw cash, subject to surrender charges if early. (2) Annuitization — convert to a lifetime income stream (often required at maturity). (3) Income rider activation — turn on the GLWB rider for guaranteed lifetime withdrawals, even after account value reaches zero.
Q: What happens if the carrier goes out of business?
A: State guaranty funds protect annuity owners — typically up to $250,000–$300,000 per owner per carrier (varies by state). Check your state's guaranty association limit. The carrier's AM Best rating signals failure probability; A-rated carriers have very low historical default rates.
Q: Can I lose money in this annuity?
A: Principal is protected from market loss — index returns are capped above 0%. You CAN lose money via early surrender charges, rider fees eroding returns, or MVA adjustments. You cannot lose money from a market downturn.
Q: How much commission does the agent make?
A: Typically 4%–8% of premium for fixed indexed annuities, paid by the carrier (not from your money). Higher commission products often have longer surrender periods or smaller caps. The product cost to you is the same whether commission is high or low — but commission size is a useful proxy for product complexity.
Q: Should I roll over my 401(k) into an annuity?
A: Sometimes yes, often no. Yes if: you want guaranteed income, you're risk-averse, you have other liquid assets for emergencies, and you're 55+. No if: you're under 50, you need liquidity, you have plenty of pension/SS income, or you'd be putting all your retirement assets into one product. Get an independent second opinion before rolling over six figures.
Q: Why are caps so different across products?
A: Trade-offs. Higher cap = lower bonus, longer surrender, lower-rated carrier, or different index strategy. There's no free lunch. A 10%+ cap typically means B-rated carrier + 14-year surrender. A 6% cap typically means A+ carrier + shorter surrender.
Q: How are annuity earnings taxed?
A: Inside the contract, growth is tax-deferred (no tax until you withdraw). Withdrawals are taxed as ordinary income (not capital gains). For non-qualified annuities, only the gain portion is taxable. For qualified (IRA) annuities, the entire withdrawal is taxable. There's a 10% IRS penalty on withdrawals before age 59½.
Explain it like I'm 12 — how an FIA actually works
A Fixed Indexed Annuity (FIA) is a contract where the carrier credits you interest based on stock market index performance — but caps your upside AND protects your downside. You can never lose money from market drops; you also won't get the full upside in big bull years.
The math:
- Put $100,000 in an FIA with a 7% annual point-to-point cap on the S&P 500
- S&P returns 12% over the year: you get capped at 7% = $7,000 credited
- S&P returns 4% over the year: you get the full 4% = $4,000 credited
- S&P returns -20% over the year: you get 0% (principal protected)
The "fees" are hidden in the structure:
- No explicit fee on accumulation-only FIA (no income rider)
- The carrier funds your principal protection by capping your upside
- Surrender charges 7-15 years if you withdraw early
- 10% free withdrawal per year typically
Quick FIA FAQ
Q: Will the cap rate change after I buy?
A: Yes. Cap rates RENEW annually within contract minimums. The 7% cap you see at purchase can drop to 4% over time. Read the minimum guaranteed cap in your contract.
Q: Why is my cap lower than my friend's FIA?
A: Carriers trade cap rate for other features — premium bonus, longer surrender, income rider, brand prestige. Two FIAs with similar "headlines" can have very different actual structures.
Q: What is the "minimum guaranteed cap"?
A: The lowest the carrier can set the cap on your contract. Common minimums: 1-4%. If the minimum is 1%, your worst-case credited return is essentially 0% real after inflation.
Q: How are FIA gains taxed?
A: Tax-deferred during accumulation. At withdrawal: gains taxable as ordinary income. 10% IRS penalty on gain portion if withdrawn before 59½.
Q: Can I lose money?
A: Not from market drops (principal-protected). You CAN lose money from early surrender (penalty) or MVA adjustments. Stay to surrender period end = no loss possible.
Q: How long is the surrender period?
A: Varies — 7 years (Athene PEC 7 Plus), 10 years (most), 14-15 years (bonus products). Longer surrender typically buys you better caps or higher bonus.
Q: What's the difference between cap, participation rate, and spread?
A: Cap = maximum credited. Participation rate = % of index move credited. Spread = % subtracted from index move. Some products combine multiple. See How Annuity Crediting Actually Works.
Q: Should I add an income rider?
A: Only if you'll activate it for guaranteed lifetime income. Rider fee (0.85-1.50%/year) charged annually whether you use it or not. Many buyers pay rider fees for years and never activate.
Plain English glossary — what these terms actually mean
| Term | What it actually means |
|---|---|
| Premium bonus | Extra accumulation value the carrier credits at issue (e.g., 19% on $300K = $57K extra). Vests over the surrender period — leave early, you keep less. |
| High Band / Low Band | The bonus % depends on your premium amount. Bigger premium = High Band = bigger bonus. Threshold typically around $200K. |
| Cap rate | The maximum interest you can earn in a year, no matter how well the index does. 6.50% cap means if S&P 500 returns 20%, you get 6.50%. |
| Participation rate | The percentage of the index's gain you get (with or without a cap). 50% participation in a 10% gain = 5%. |
| Annual point-to-point | The most common crediting method: carrier compares index level today vs. one year ago and credits the change (subject to cap/participation). |
| MVA (Market Value Adjustment) | An adjustment applied if you surrender early — reduces surrender value when rates have risen, increases it when rates have fallen. |
| Surrender charge | The carrier's penalty for taking money out beyond the free-withdrawal limit during the surrender period. Declines each year, zero at end. |
| Free withdrawal | Amount you can take without surrender charge each year. Often 10%, but here it's 0% in year 1, 10% thereafter. |
| GLWB / Income Rider | Optional add-on (for an annual fee) guaranteeing a lifetime income stream even if your account hits zero. |
| Income base | A separate number from accumulation value used only to calculate income rider payments. Not available as a lump sum. |
| Payout factor | The percentage of your income base you get per year as guaranteed income. Depends on age and deferral length. |
| Vesting | The process of "earning" the premium bonus over the surrender period. 14-year vesting = 1/14th per year. |
| AM Best rating | Letter grade for the carrier's financial strength. A+ = Superior (top tier). Sammons / North American is A+. |
| Sammons Financial Group | The parent company of North American Company for Life and Health Insurance — mutually owned, strong balance sheet. |
| IRD (Income in Respect of Decedent) | The tax treatment heirs face on inherited annuity gains: ordinary income tax, no step-up in basis. |
| Minimum guaranteed cap | The contractual floor on cap rate — typically 1–2%. The worst-case scenario you're agreeing to. |
| Volatility-controlled index | Custom-built index (not the S&P 500) designed to swing less. Smoother but typically lower return. |
Who it actually fits
- Buyer age 55–67 with a true 14-year hold horizon
- Premium of $200K+ (qualifies for High Band 19% bonus)
- Wants principal protection + meaningful bonus + carrier strength above all else
- Plans to take income starting in their late 60s or early 70s (where the 7%+ payout factor applies)
- Comfortable paying an explicit annual fee for transparency
- Has other liquid assets covering 12+ months of needs (since year-1 free withdrawal is 0%)
Who should look elsewhere
- Income within 3 years → look at SPIA (MassMutual, Pacific Life) or short-surrender DIA
- Over age 72 → 14-year surrender outlives the typical use case; consider 5–7 year products
- Want the highest possible cap → SILAC Denali 14 (10.25% cap, B-rated trade-off), F&G Prosperity Elite 14 (8.50% cap, A)
- Want a shorter surrender period → Athene Performance Elite 15 has similar mechanics, or look at 7–10 year products from other carriers
- Premium below $200K → you'd get Low Band 15% bonus (still strong, but consider whether Charter Plus 14 still fits or if a different product fits better)
- Don't want an explicit annual fee → North American Charter Plus 14 also comes in non-fee MVA versions with similar cap and waiver suite — different cost structure
How to pressure-test what your agent told you
Ask the agent these five questions and check the answers against the actual prospectus:
- "What is the minimum guaranteed cap rate over the 14-year surrender period?" (this is the worst case — if they don't know, they haven't read the contract)
- "How does the 19% bonus vesting actually work — what % do I keep at year 5? Year 10?"
- "What's the annual contract fee on the CA FEE variant — exact dollar amount, not just a percentage?"
- "What's the MVA structure — what happens to my surrender value if rates rise 200 bps?"
- "What's the payout factor at MY age with MY planned deferral period?" (compare to Allianz/Nationwide/Lincoln at same inputs)
If they dodge any of these or say "trust me," slow down. A good agent has these answers cold.
📩 Get a second opinion before you sign — this is a big decision
Talk to a licensed annuity expert. Hans.
You just read 3,500+ words on this product. You know more about the Charter Plus 14 than most agents selling it. The last question worth answering: is it actually right for you?
Drop your info — I'll personally pull your exact illustration through North American's software, compare it against 2 closest alternatives, and send you a 1-page written verdict in 24 hours. No charge. No pitch. If Charter Plus 14 is right for you, I'll tell you. If it isn't, I'll tell you what is.
📞 Hans Goldstein · 213-414-2808 · Or schedule a 15-min call · Independent licensed insurance producer, NPN 20602398, appointed with 20+ A-rated carriers
By submitting, you agree to receive calls and texts from Hans Goldstein at the number provided. Msg/data rates apply. Reply STOP to opt out. Privacy Policy.
📩 Get a second opinion before you sign — this is a big decision
Talk to a licensed independent expert. Hans.
Fixed indexed annuities are committed for 7-15 years. Cap rates renew annually and can drop. Income riders have separate benefit bases that aren't cash. Get an independent review before you commit your retirement savings to a multi-year contract.
Drop your info — within 24 hours, you'll get a written independent review of your quote, side-by-side comparisons vs. 2 alternatives, and a no-pressure 15-minute call if you want one.
📞 Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
By submitting, you agree to receive calls and texts from Hans Goldstein. Msg/data rates apply. Reply STOP to opt out. Privacy Policy.
Disclosure
This review reflects publicly available product materials and approximate rates as of the date stated above. Annuity rates, caps, participation rates, payout factors, crediting methods, and long-term care benefit structures change frequently — typically monthly. Always confirm current values against the most recent carrier disclosure document and the actual contract before purchasing. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers across the annuity and long-term care insurance market; the producer's specific appointment status with the carrier discussed in this review may vary, and this review is not an endorsement or representation of carrier appointment. No compensation has been received from any carrier in connection with the publication of this review. Always read the actual contract and consult a licensed advisor before purchasing any annuity or long-term care insurance product. Past index performance does not predict future credited interest. Annuities and hybrid life+LTC policies are long-term contracts with surrender charges; they are not suitable for funds you may need before the end of the surrender period. AM Best ratings and tax treatment are subject to change. Tax discussion of IRC §7702B, §1035, and the Pension Protection Act of 2006 reflects law as of 2026 and is subject to change.