1-2-3 with Anytime Income Rider review

Yes, for the right buyer. This is a good annuity for someone whose goal is protected lifetime income, who values having a built-in rider rather than relying on annuitization later, and who can leave the money alone for several years before turning income on. It is less appealing for someone who wants strong accumulation, expects to need liquidity above the free-withdrawal amount in the early years, or wants a shorter commitment.

The main reason to buy F&G 1-2-3 with the Anytime Income rider is to build future protected lifetime income while keeping principal shielded from direct market loss. The fact that the income rider is included without a separate annual fee is a real draw, because many competing income FIAs charge roughly 0.95% to 1.10% of the income base every year for the same kind of guarantee. The secondary reason is the income-base growth design: index interest is multiplied during the growth period and early premiums get a bonus added to the income base, both of which build the number your future income is calculated from.

I think this annuity is best for someone in the pre-retirement or early-retirement window — roughly mid-50s to early-70s — who is using long-term money to create a future income stream and expects to defer withdrawals for several years before activating the rider. It fits both qualified (IRA) and non-qualified money given the wide issue ages. It is less attractive for someone who wants the simplest possible annuity, expects to need frequent access to principal above the free amount in the early years, or is mainly shopping for accumulation.

You are not buying stock market upside. You are buying a lifetime income framework wrapped around a principal-protected annuity. The heart of the contract is the income rider. Your premium builds two things: an account value that responds to index crediting, and a separate income base that determines how much guaranteed income you can take for life. The income base grows through the interest credit multiplier and the early-premium bonus, and your age and the income option you choose when you activate determine the lifetime payout percentage. The "1-2-3" branding refers to the contract's structure rather than a literal three-step process — what matters is the rider math, not the name.

The Anytime Income Guaranteed Lifetime Benefit Rider is built in at no separate charge. It comes with two paths. The Anytime Income option applies a 250% multiplier to any index interest credited during the growth period — meaning if the account earns interest, the income base is credited at 2.5 times that amount — plus a 35% Income Base Bonus Multiplier on all premiums received in the first 18 months. Once you turn income on, the multiplier on credits drops to 150% during the income period. The Future Income option instead uses a 150% multiplier during growth and a larger 50% Income Base Bonus on early premiums, trading a lower growth multiplier for a bigger up-front bonus.

In plain English, Anytime Income is built to grow the income base faster while you defer, and Future Income front-loads more of the benefit through the bonus. Note that these multipliers apply to index interest credited, not to a guaranteed roll-up — so in a year where the index strategies credit little or nothing, the multiplier has less to work with. That is an important distinction: a 250% multiplier on a small credit is still a small number.

The most meaningful secondary feature is the crediting menu the account value uses. The contract offers point-to-point index strategies tied to the S&P 500, the Balanced Asset 5 and Balanced Asset 10 indices, the BlackRock Market Advantage Index, and the Morgan Stanley U.S. Equity Allocator Index, plus a fixed account. That gives the income base more than one engine to grow from, since the multiplier amplifies whatever the strategies actually credit.

The tradeoff is that the current participation rates, caps, and spreads were described in the materials only as ranges that vary by strategy (roughly 40% to 125% participation, caps from 0% to 10%), and the specific spread terms were not clearly disclosed in the available brochure. If you are shopping this, ask for the current rate sheet directly so you can see what each strategy is actually crediting, because the income-base growth depends entirely on those numbers.

This annuity is built for long-term retirement dollars, not short-term cash. After issue you can take up to 10% of premium in year one and up to 10% of the beginning-of-year account value in later years free of surrender charges and the market value adjustment — that is a reasonably generous free-withdrawal allowance, and it can be taken systematically or in up to four lump-sum withdrawals per year.

The bigger caution is the surrender schedule itself. The charge holds at a full 10% for the first three contract years before it begins stepping down, which is steeper and flatter at the front than most 10-year income FIAs. Withdrawals above the free amount during that period are subject to both the surrender charge and a market value adjustment (MVA), which means your penalty can move with interest rates. There are relief features — surrender charges are waived for nursing home confinement, terminal illness, or qualifying impairment (inability to perform two or more activities of daily living, certified after the first policy year). Even so, the message is clear: treat this as money you will not touch for the better part of a decade.

The headline is the absence of an explicit fee: there is no base contract charge and no separate income rider fee, which is unusual for a product whose entire purpose is the income guarantee. Most income FIAs fund the rider through an annual charge against the income base; here the cost is built into the crediting terms instead. That is the real tradeoff — you are not paying a visible fee, but the participation rates and caps that determine income-base growth are set with the no-fee rider in mind, so they may be lower than what a comparable accumulation FIA would offer. There is no free lunch; the cost just shows up in the rate sheet rather than as a line-item deduction. The other tradeoffs are structural: the long surrender period, the flat 10% front end, and the MVA all reduce flexibility in exchange for the income design.

Legal Entity: Fidelity & Guaranty Life Insurance Company

Parent: FGL Holdings

A.M. Best Rating: A

F&G is an established annuity carrier with an A rating from A.M. Best (the third-highest of its grades), reflecting solid financial strength. This product is a mainstream income-focused FIA design rather than a niche structure.