ForeIncome II 5-Year with Income Multiplier (Morgan Stanley) review

Yes, for a specific buyer. This is a good annuity for someone who wants guaranteed lifetime income, values principal protection, and appreciates the shorter five-year commitment instead of the long surrender schedules most income annuities require. The Morgan Stanley distribution channel means you will work with an advisor on the platform to purchase it, which suits buyers who prefer that relationship. It is less appealing for someone who wants pure accumulation, has no intention of ever activating income, or can comfortably defer for a decade — that last buyer may be better served by a longer income annuity where extended deferral converts the multiplier into more income than this contract's five-year window naturally allows.

The main reason to buy this version is the same as the base product: to build future protected lifetime income while keeping principal protected and without a decade-long lockup. The Income Multiplier credits 3x index interest to the withdrawal base during deferral, giving the income side a faster path to growth than a flat roll-up in a positive return year. For a Morgan Stanley client who wants the security of income they cannot outlive but values the shorter commitment, this is a straightforward way to get there. The advisor relationship also means someone is actively helping you time the income activation decision, which matters when the multiplier's value is so closely tied to how long you defer.

I think this annuity is best for someone in their late 50s through 70s who is working with a Morgan Stanley advisor on retirement income planning, expects to defer withdrawals for several years, and wants a built-in rider rather than annuitizing later. The 45-85 issue-age range is wide, but the multiplier rewards a real deferral window, so it fits a pre-retiree or early-retiree better than someone who needs income almost immediately. It is less attractive for someone whose main goal is growth, someone who wants the simplest annuity possible, or someone confident they will never activate income — that buyer pays 1.05% a year for a feature they do not intend to use.

You are not buying stock-market upside. You are buying a lifetime income framework wrapped around a principal-protected annuity, and the engine is the withdrawal base. Your premium establishes a withdrawal base, and during the deferral years the Income Multiplier credits three times your earned index interest to that base rather than once. When you eventually activate income, your age and the size of that withdrawal base determine your guaranteed annual payment for life. The account value and the withdrawal base are two separate numbers — account value is what you can walk away with, and the withdrawal base exists only to calculate lifetime income. The Morgan Stanley version does not change that fundamental structure; it changes who sells it to you and on whose platform the contract is administered.

The headline feature is the Income Multiplier Benefit, built on Forethought's Guaranteed Lifetime Withdrawal Benefit and included automatically. The mechanic: in any year your chosen index strategy earns interest, that interest is credited to your account value once and to your withdrawal base three times during the deferral phase. The withdrawal base is the figure your lifetime payout is calculated from, so growing it three times faster directly grows your future income. Once you activate income, the multiplier steps down to 1x, and credits apply at the normal single rate. The spec describes the 3x-pre-activation, 1x-post-activation methodology at medium confidence, so confirm the exact crediting rules and any caps with the current rate sheet through your Morgan Stanley advisor before relying on a specific projection. The practical point is clear: this rider rewards years of solid index performance during deferral, and it does nothing in a flat year because there is no interest to multiply. Unlike a fixed roll-up that guarantees a set percentage regardless of market behavior, the multiplier is contingent on the index actually earning.

The most meaningful secondary feature is the five-year surrender schedule itself — and for a Morgan Stanley buyer it matters exactly as it does for any other buyer of this product. Income-focused FIAs almost always carry eight-to-ten-year surrender periods because the carrier needs time to support the income guarantee. Forethought offering the same built-in lifetime income rider on a five-year chassis is the unusual part, and for a liquidity-conscious buyer it changes the math. Your money is free of withdrawal charges after year five. The honest caution remains: the short surrender works against the multiplier's deferral incentive. The contract frees your principal at exactly the point where continuing to defer would keep compounding the withdrawal base. There is also a built-in Income Enhancement Benefit (an Annual Payment Accelerator Rider) that can increase payments under qualifying chronic-illness or care circumstances at no separate charge per the spec, which adds a care-support dimension worth discussing with your advisor if that risk is on your radar.

This annuity is built for retirement income, not short-term cash needs, but it is friendlier on liquidity than most income annuities. You can take up to 10% of contract value each year without withdrawal charges — in year one that 10% is measured against premiums paid, and in later years against account value. Anything above that during the surrender period is subject to the charge schedule below, and a market value adjustment may also apply. An MVA — Market Value Adjustment — means the size of your surrender penalty fluctuates with interest rates, so the cost of an early full surrender is not fixed. The relief features are solid. Required minimum distributions are generally accommodated, and there are two waivers worth knowing: a Nursing Home Waiver that removes withdrawal charges and MVA after 90-plus consecutive days of confinement, and a Terminal Illness Waiver that does the same after a qualifying diagnosis past the first contract anniversary. After year five, all of this is moot — there are no withdrawal charges. The minimum guaranteed surrender value floor is 87.5% of premiums accumulated at 1-3%.

The cost that matters here is the income rider. The Income Multiplier Benefit charges 1.05% of the withdrawal base annually, and that charge is deducted whether or not you ever activate income. That is the trade: you are paying 1.05% a year for the right to a 3x multiplier on index credits and a guaranteed lifetime payout. Whether it is worth it depends almost entirely on whether you actually intend to turn income on and defer long enough for the multiplier to do meaningful work — if you do, the math can favor you; if you never activate, you have paid for a guarantee you did not use. The spec does not list a separate base-contract fee, which is consistent with the base product. The other tradeoff is structural: index gains are shaped by caps and participation rates, and the current crediting terms reflect that this contract supports income guarantees first. Specific current rates were not disclosed in the available materials at the level of detail shown in the base product — ask your Morgan Stanley advisor for the current rate sheet before relying on any specific projection.

Legal Entity: Forethought Life Insurance Company

Parent: Global Atlantic Financial Group