BCA 2.0 12-Year review

In exchange, every crediting strategy on the contract caps, participates in, or spreads the index return rather than paying it in full, and the premium is committed for 12 years.

The contract offers 14 crediting accounts, but we don't have a cap we can quote here as a single, comparable annual S&P 500 point-to-point figure. That can mean several things: the menu may not include a plain point-to-point account at all, an account that names the S&P 500 may carry a fee, a spread, or a reduced participation rate that makes its cap not directly comparable, or a plain point-to-point account may exist and our rate data simply doesn't carry a cap figure for it. Each account's own terms, where we have them, are in the table below.

A fixed indexed annuity works by measuring an index's return over a set period and applying a crediting formula to decide how much of it you keep. A cap sets a ceiling on the credit; a participation rate credits a percentage of the index's gain; a spread subtracts a fixed amount before crediting the rest. None of it is direct market ownership, and none of these formulas can produce a negative credit — the worst a crediting period can do is pay zero. The guarantee behind all of it is a contractual obligation of Athene Annuity & Life (Annexus), backed by the company's own reserves, not by the FDIC and not by any bank.

The contract allows 5% out each year without a surrender charge (per the carrier's brochure). Beyond that allowance, a withdrawal during the surrender period is reduced by the charge for that contract year — on top of whatever the index accounts did or didn't earn.

The surrender charge starts at 14.5% in year 1 and steps down to 4% in year 12; the full schedule is in the table below. Those percentages come off the amount you withdraw, which is why an early exit can return less than you put in even in a year the index accounts credited something.

This contract also carries a market value adjustment. On top of the surrender charge, an early withdrawal is adjusted up or down depending on how interest rates have moved since the contract was issued — if rates have risen, the adjustment works against you. It applies only to withdrawals above the free amount during the surrender period.

Of the 7 crediting accounts our rate data reports a strategy-fee figure for, 7 carry an explicit annual charge on top of what it credits — often the cost of a higher cap or an uncapped participation rate. Each account's own rate is in the table below rather than summarized here, because it varies account to account. Our rate data doesn't carry a fee figure at all for 7 other accounts on the menu — that is a gap in the data, not evidence those are free.

The BCA 12 2.0 BALIR - Flex Growth with Earnings Indexed Income carries a charge of 1.00% annually , and it is optional — declining it removes both the benefit and the charge. That charge buys the rider's benefit; it does not raise the credit on any index account.

The real tradeoffs on a contract like this are the crediting caps and the surrender period, not a visible fee line. Gains come out as ordinary income rather than capital gains, and a withdrawal before age 59½ generally carries a 10% IRS penalty on top of the tax. Neither is a reason to avoid the product; both are reasons it suits money you have already decided not to touch.

The buyer this suits already wants downside protection more than upside, and is comfortable getting a share of an index's gain in exchange for never taking its losses for 12 years. Protection is the product being sold; full market participation is not.

It is the wrong contract for anyone who might need the principal early, for a buyer who wants uncapped market exposure, and for money that is already an emergency reserve. Under age 59½, the 10% IRS penalty on early withdrawals is an additional reason to look at this as long-term money.

Every guarantee in this contract is only as good as Athene Annuity & Life (Annexus), which currently holds an A.M. Best financial strength rating of A. An annuity is not FDIC insured; the backstop is the carrier's own balance sheet, with state guaranty association coverage behind it at limits that vary by state.

The contract is filed in 31 states, not including New York — New York files its own annuity products, so a New York resident is shopping a different and much smaller shelf.