Gainbridge, a newcomer in the annuity market, provides a variety of annuity products tailored to different needs. The company’s goal is to make these complex financial products more accessible to everyday investors by focusing on digital-first solutions and offering a small selection of options.
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This review will delve into Gainbridge, outlining its strengths and weaknesses, the types of annuities it offers, and whether it may be the right choice for you.
Pros and Cons of Gainbridge
Pros
- Digital-first approach: Gainbridge provides a convenient and efficient purchasing process.
- Variety within products: Gainbridge caters to different investor needs and risk tolerances.
- Strong financial backing: Being part of Group1001 offers a level of financial stability.
- Competitive rates: Gainbridge often boasts competitive interest rates on its annuities.
Cons
- Limited product range: Compared to some established annuity providers, Gainbridge’s product lineup is relatively small.
- Lack of traditional agent support: While the digital approach is efficient for many, some prefer face-to-face interaction with an agent.
- New company: Gainbridge has a shorter track record compared to some competitors, which might raise concerns for some investors.
Overview of Gainbridge’s Annuities
Gainbridge offers two main types of annuities: multi-year guaranteed annuities (MYGAs) and single premium immediate annuities (SPIAs). MYGAs provide a guaranteed interest rate over a specific term, with taxes deferred until withdrawals commence. Single premium annuities involve a lump sum investment in exchange for fixed monthly payments, ensuring guaranteed income during retirement.
Additionally, Gainbridge offers two other annuity products tailored to specific financial goals and requirements, combining elements of the core annuity types mentioned above.
SteadyPace
SteadyPace is a single premium deferred annuity designed for individuals seeking guaranteed income and principal protection. By making a one-time investment, your money grows tax-deferred until you start withdrawing income at a future date. This product offers a competitive interest rate.
As a fixed multi-year guaranteed annuity (MYGA), SteadyPace provides a fixed interest rate for a specified period, safeguarding your initial investment. While offering stability, SteadyPace does not include additional optional benefits or riders.
FastBreak
FastBreak is another single premium deferred annuity where you invest a lump sum upfront and receive payments at a later date. It guarantees your initial investment and earns interest at a fixed rate for a specific term.
Unlike most annuities, FastBreak does not offer tax deferral on the interest earned, meaning you will owe taxes on the interest annually, even before receiving payments.
While both FastBreak and SteadyPace are multi-year guaranteed annuities designed for long-term savings, they cater to different investor needs. FastBreak is suitable for those who might require access to their money before age 59½ to avoid the 10 percent IRS early withdrawal penalty. On the other hand, SteadyPace is ideal for individuals saving for retirement who plan to keep the money invested until at least age 59½.
Both products allow for a 10 percent annual withdrawal without penalty. If you need to withdraw more or surrender the contract early, you may face withdrawal charges and a market value adjustment.
ParityFlex
ParityFlex is a single premium deferred annuity that offers a unique blend of safety and potential growth. As a MYGA, it provides a guaranteed rate of return for a specific term, such as five or 10 years.
Differing from traditional MYGAs, ParityFlex offers flexibility by allowing participation in potential market gains. While not providing the same market exposure as a variable annuity, ParityFlex enables you to choose from various index participation rates and cap levels.
ParityFlex also includes a built-in guaranteed lifetime withdrawal benefit (GLWB) at no extra cost.
OneUp
Contrary to traditional fixed annuities that offer a guaranteed interest rate, OneUp presents a fixed interest strategy with a minimum guaranteed rate. It also enables your money to participate in potential market gains through indexed strategies. This allows for potential earnings that may exceed what a traditional fixed annuity offers, without the direct investment risks associated with the stock market.
It’s crucial to note that while OneUp protects against principal loss, it does not ensure specific investment returns. Earnings from the indexed strategies will be impacted by market performance. This product suits investors seeking a balance of safety and growth potential, but is not intended for individuals seeking total protection of their principal.
Understanding Gainbridge
Established in 2018, Gainbridge is a digital-first annuity company focused on simplifying the purchasing process for customers. By streamlining operations online, Gainbridge aims to provide lower costs and quicker transaction times.
As a subsidiary of Group 1001, a financial services group with approximately $62.6 billion in assets under management as of December 31, 2023, Gainbridge boasts a solid financial standing, offering a sense of security to investors.
Based in Indianapolis, Gainbridge’s annuity products are issued by Gainbridge Life Insurance Company.
Is Gainbridge Secure?
One of the primary considerations when selecting an annuity is the financial stability of the issuing company. Gainbridge is part of Group1001, which includes brands like Delaware Life, Clear Spring Life, and RVI Group, among others.
As of May 2023, Gainbridge holds a robust A- rating from AM Best. This rating indicates the company’s ability to fulfill its obligations to policyholders.
Nevertheless, it’s recommended to conduct your own due diligence or seek advice from a financial advisor to fully grasp the risks associated with purchasing an annuity.
The safety of your investment also depends on the specific annuity product you select. Some annuities, such as fixed annuities, offer more principal protection than others, like variable annuities. Before signing a contract, ensure you understand the features and guarantees of each product.
Final Thoughts
Gainbridge presents an appealing option for individuals seeking a simple way to purchase annuities. Its digital platform and competitive rates are attractive features. However, the limited product range and absence of traditional agent support may be drawbacks for some individuals.