Power Select AICO review

Yes, with real caveats. Power Select AICO is a solid pick for someone who wants indexed growth potential, values the guaranteed minimums built into its crediting strategies, and finds the AICO overlay's downside protection appealing enough to justify the fee. It's a weaker fit for someone who wants the cheapest possible FIA, needs the product available in California or New York, or isn't working with an agent contracted through Market Synergy Group.

The rational buyer here wants principal protection with upside tied to index performance, but wants a stronger floor under that upside than a typical FIA offers. The 100% guaranteed participation on the S&P 500 and Nasdaq-100 cap strategies means the insurer can't quietly shrink real participation even if the stated cap moves; the 5% guaranteed minimum on the other four strategies does something similar for the participation-rate side. Layer the AICO overlay on top — a mechanism that pays extra if five years of actual crediting underperformed a set formula — and you get a contract explicitly designed to soften a run of weak index years, not just to reward strong ones.

I think this fits someone in their mid-50s to 70s, likely near or in retirement, moving qualified or non-qualified money into a conservative growth vehicle for a defined 5-year window. It suits buyers who don't need lifetime income guarantees from this particular contract — there is no income rider here — and who are comfortable paying an explicit annual fee in exchange for the overlay's built-in downside support. It's a poor fit for anyone who wants to avoid ongoing fees entirely, needs the product in California, New York, or Idaho, or doesn't have access to an agent appointed through Market Synergy Group, since that's the only distribution path for this product.

Strip away the branding and this is a single-premium deferred annuity that credits interest based on the performance of external indices, with your principal protected from direct market loss. You are not invested in the S&P 500, Nasdaq-100, or any of the other four indices on the menu — you're earning interest calculated by formulas (caps, participation rates) that reference how those indices moved over a one-year period. On top of that ordinary indexed-annuity structure, Corebridge has attached a mandatory overlay feature funded by an explicit annual fee, which is the part of this contract that actually differentiates it from a standard FIA.

Each contract year, you allocate among seven crediting options: two annual point-to-point cap strategies (S&P 500 and Nasdaq-100), each carrying 100% guaranteed participation with a current cap between 7.00% and 8.50%; four annual point-to-point participation-rate strategies tied to the Dimensional US Foundations Index, Invesco New Economy Index, ML Strategic Balanced Index, and PIMCO Global Optima Index, currently running 28% to 150% depending on the index and backed by a 5% guaranteed minimum written into the contract; and a 1-year fixed interest account currently paying 1.75%-2.00% depending on premium band. All of these reset annually, meaning the cap or participation rate you're credited going forward can change each contract anniversary — nothing here is locked in for the full five years except the guaranteed floors themselves.

The feature that gives this product its name is the Additional Interest Credit Overlay. Each year, the carrier tracks a running total of interest actually credited to your contract, multiplies it by 200%, and caps the result at 30% of your net premium. On the fifth contract anniversary — and only then — Corebridge compares that overlay calculation to your actual account value. If the overlay figure is higher, the difference is paid into your contract as a lump-sum Overlay Credit; if your actual crediting already outpaced it, you receive nothing extra and simply keep what you earned. AICO is a backstop against a run of weak index years, not a guaranteed bonus stacked on top of good ones, and it's funded by the 0.80% annual Product Fee charged against contract value for exactly the five years the overlay is active — the fee stops the moment the overlay resolves.

The withdrawal-charge schedule is a standard 5-year design — 8%, 7%, 6%, 5%, 4% — with a market value adjustment layered on top of any withdrawal that exceeds the free amount. You can access up to 10% of premium free of charge in the first contract year, and up to 10% of the prior anniversary value in years two through five, which is workable for supplemental income but not a substitute for an emergency fund. RMDs attributable to the contract bypass both the surrender charge and the MVA, though they still count against your 10% free-withdrawal allowance, so a large RMD could still eat into what you'd otherwise be able to take penalty-free for other purposes. Because the MVA moves with interest rates, a withdrawal above the free amount could cost more or less than the stated surrender percentage depending on where rates sit relative to issue.

The headline cost is the 0.80% annual Product Fee, assessed against contract value in years one through five — calculated off premium in year one, then off the prior anniversary value afterward — so roughly 4% of value cumulatively over the life of the fee, though the exact dollar cost depends on how the account value moves each year. That fee funds the AICO overlay described above and terminates automatically at the end of year five regardless of whether the overlay actually pays out anything. There's no separate income-rider fee because there's no income rider on this contract, and the included chronic-illness and terminal-illness waivers carry no additional cost — though they're not available in every state and don't function as long-term-care insurance; they simply waive the withdrawal charge and MVA on a qualifying withdrawal, they don't enhance the payout amount.

Legal Entity: American General Life Insurance Company

Parent: Corebridge Financial, Inc.

A.M. Best Rating: A