The Secrets Behind MYGA Maturity Dates

Hi, there. Stan The Annuity Man, America's annuity agent licensed in all 50 states. Today's topic is The Secrets Behind MYGA Maturity Dates. And you say, "Wait a minute. MYGA maturity dates? There's more than one?" Yes, there is. MYGA's Multi-Year Guarantee Annuities are the annuity industry version of a CD. You get a guaranteed interest rate for a specific period of time that you choose. It can be as short as 1 year up to 10 years. But it functions the same way. The difference is that MYGA interest can grow and compound tax deferred in a non-IRA account. Whereas with CDs, you'd have to pay taxes on the interest. It doesn't make them better than CDs, we love CDs, we don't sell CDs. But MYGAs are for if you want the duration to be three years and out.

Now, one of the things that happens, we sell bunches of MYGAs and all other annuities, but my team wanted me to do this blog because they get a lot of calls on the maturity dates on a MYGA. To look at MYGAs, visit The Annuity Man; we have a live MYGA feed. You put in your state and the duration you're looking at, and it will populate with what's available in your state from the highest yield down.

It's a Contract

But let's say you buy a MYGA. You're going to get a policy in the mail. It's a contract. It's a contract between you and the issuing annuity company, and the life insurance company issues annuities. But one of the things that people do a Scooby-Doo on, and Scooby-Doo is like, "Ruh?" They'll get the policy; they'll see the guarantee. They'll see, "Okay, I bought a 5-year, it's got this percentage guarantee for those five years." And then they'll see maturity date and it'll be like 50 years out. And so, the call comes in, obviously, and it goes, "What's this? I thought I bought a 5-year, and this is a 50-year policy."

No, it's not. It's not a 50-year policy. I've never heard anybody call it this, but I'm Stan The Annuity Man and I simplify things. That contract maturity date is what I call the Policy Death Date. What that means is, let's say the contract, that date is so far out. It's like 2054; let's just pick that number. And you bought a 5-year MYGA with the guaranteed interest rate for those five years. That's all you care about, yet you see 2054, the year. What does that mean? That means that the policy, that actual policy, is void at that point in time. Now you're not going to be alive. I'm not going to be alive. So, hopefully, someone in your family is going to be alive. But that's what it means. It means that with that policy, the company is going to contact someone in your family if money's still left in it. They will send them the money, policy's over, game over. It's like an expiration date on the policy, but it has nothing to do with the guarantee you locked in.

MYGA Example

Let's go backward. Let's do the example again. You bought a 5-year MYGA. You got a guaranteed interest rate for those five years. You get the policy; you look at the policy. You say, "Okay, I see the five years. I see the surrender charge schedule. I see the guaranteed interest rate." And then the Scooby-Doo, "Ruh?" And you see the contract date for the policy, the contract end date, the death date, 2054, 2075, 2062, whatever. All that means is, at that point in time that year, if they haven't heard from you, if you haven't cashed it out, if you haven't transferred it, then they're going to be in touch with your family and distribute that money because that policy is dead and it's over with. But you and I won't be around.

Don't get frightened by that. I understand the concern because I read everything, too. I'm a policy person. I'm a contract person. I read everything I get and everything I sign because you have to sign a delivery receipt. But that's what that means.

MYGA Example 2

Let's go backward again. Let's take the same example. You bought a 5-year MYGA, it had a guaranteed interest rate. You understand the policy death rate. "But Stan, what happens at the end of the five years?"

Now, that's what sets The Annuity Man apart from just about everybody else out there. I've never heard of anyone that's as good at this as we are. We're going to be in touch with you 60 to 90 days before that interest rate guarantee period comes up. So, we'll be in touch with you in four and a half years if you have bought a 5-year guarantee and say, "What do you want to do? Do you want to roll it to another MYGA? Typically, there's a provision in that 5-year guarantee that you can get all your money back and all the interest earned if you haven't taken any of it out, without penalty." We will be in touch with you to make sure that you understand your decisions and that your decisions are at the end of that guarantee period.

1035 Transfer

In this case, five years specific percentage for five years. With some, not all, you have the ability to take out interest if you want to. Or if you just let it ride and let it compound and defer, at the end of that 5-year time period, you can transfer it to another annuity. Remember, MYGAs can be held in non-IRA, IRA, and Roth IRAs, so they can transfer without a taxable event. If you want to do that, it's called a 1035 Transfer Annuity to Annuity Transfer, which the IRS calls a blessing. The IRS blesses that, and you don't have to pay taxes on that. But we'll be in touch to see if you want to do that.

Renewal Rate

Also, the issuing company that you bought the 5-year from, will come back with what's called a renewal rate, and they will try to keep you there. Sometimes it's a higher rate than you can get by shopping all carriers at our site. Sometimes it's not. That's your decision. And again, the final decision you have is, "No, I don't want to do this anymore. Please send me all the money back with the interest earned. Or if I took the interest out during that time period, send me the money back that's left in the account." Typically, the principal you started with.

So, MYGAs are simple, but sometimes these policies are not written by Stan The Annuity Man. The world would be a better place, the annuity world would definitely be a better place if I was the person writing the policies. Because I would write in non-legalities, I'd write them in English, and if you saw 2054, I'd have in parentheses (Policy Death Date at this point. If you haven't contacted them, they will distribute the money to your family.) And there would be no calls in.

But my team is watching this. They're standing up and doing a high five, and they're doing an applause, which they do anyway when I walk in. I mean, it is what it is. But they're happy that I did this, because the next time they have a question, I know what they're going to do. They're going to say, "You know, Stan did a video on that, explaining that. It's a policy death date. It really has nothing to do with what we're talking about, but they have to put it in there."

And that's really what it is. The focus is the guarantee that you locked in. In this example, the 5-year or if it's a 3-year, 7-year, or 10-year, and knowing that with confidence, my team will be in touch with you. It will not fall through the cracks. You do not have to track it yourself. We're going to track it for you. We have the best technology out there. We will be in touch with you to see what you want to do with your money.

Those are the secrets to these MYGA maturity dates, and I hope that you can go to The Annuity Man and shop for MYGAs. And know that when you get that policy from us, we overnight it to you, and you see that policy end date, that's the policy death date. You know what that is, and the focus is on the guarantee you locked in.

My name is Stan The Annuity Man. I am America's annuity agent. Thanks for asking. I'll see you next time.

Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.