ForeIncome II 7-Year with Guaranteed Income Builder (Morgan Stanley) review

Yes, for the right buyer. This is a good annuity for someone working with a Morgan Stanley advisor who is planning future protected lifetime income, wants principal protection along the way, and is comfortable deferring withdrawals for a few years before turning income on. The Morgan Stanley channel version is functionally identical to the open-market product — same income mechanics, same fees, same surrender schedule — so the evaluation is the same: it is less appealing for someone who mainly wants accumulation, needs regular access to more than the free-withdrawal amount, or doesn't actually intend to use the income rider. The narrower crediting menu (S&P 500 only) is worth noting if index diversification matters to you, though it rarely changes the income outcome.

The main reason to buy this product is to create future protected lifetime income while keeping principal safe from market losses in the meantime. The Guaranteed Income Builder applies a 10% roll-up to the income benefit base each year for up to 15 years, plus a 10% bonus to that base at issue, which builds a larger number from which your eventual lifetime withdrawals are calculated. For a buyer working specifically through Morgan Stanley who wants that income framework without a full decade of lockup, the 7-year surrender period and the familiar Forethought structure are genuine points in its favor. The no-cost chronic illness enhancement adds a secondary benefit that can increase income payments in a qualifying care situation.

I think this annuity is best for someone in the pre-retirement or early-retirement window — roughly their 50s to mid-60s — who works with a Morgan Stanley advisor, wants to use long-term money to set up future income, expects to defer withdrawals for several years, and likes the certainty of a built-in rider rather than relying on annuitizing later. Lifetime withdrawals can begin as early as age 55. It works for both qualified and non-qualified money, but it's least attractive for someone who wants the strongest possible growth terms, needs frequent liquidity, isn't sure they'll ever switch income on, or values a wide index menu over income simplicity.

You are not buying stock market upside, and you are not buying a 10% return on your money. You are buying a lifetime income framework wrapped around a principal-protected annuity. The contract tracks two separate numbers: your actual account value (the real cash, which grows based on index crediting and is what you can withdraw or pass on) and a separate income benefit base (a bookkeeping figure that grows at 10% a year and exists only to calculate your lifetime income). The 10% roll-up applies to the benefit base, not your cash. When you activate income, your age and the benefit base together determine a guaranteed annual withdrawal you can take for life — even if the account value eventually hits zero.

The Guaranteed Income Builder is the built-in Guaranteed Lifetime Withdrawal Benefit. At issue, the income benefit base receives a 10% deferral bonus. Each contract year, the rider applies a 10% simple annual roll-up to the benefit base for up to 15 years, compounding the income calculation number over time. When you are ready — any time from age 55 on — you activate lifetime withdrawals. Your annual payout is the benefit base multiplied by a payout factor tied to your age at activation, and it continues for life even if the account value is fully depleted. The Morgan Stanley version's two indexed strategies — S&P 500 Annual Point-to-Point (100% participation, 5% cap) and S&P 500 Performance Triggered (3.85% declared rate if the index is flat or positive) — provide the account-value growth alongside a fixed account at 3.00%. The roll-up stops at year 15, and the benefit base cannot be taken as a lump sum. The rate sheet figures here represent brochure-date terms and will change at renewal.

The most meaningful secondary feature is the Income Enhancement Benefit, a chronic illness provision available at no additional fee. If you become unable to perform certain activities of daily living, this rider can increase your income payments for a qualifying period — turning the contract into a partial care-cost buffer on top of its retirement-income purpose. Because it carries no separate charge, it adds real value without adding cost. The Performance Triggered crediting strategy is worth understanding as a secondary crediting tool: it credits a declared 3.85% rate if the S&P 500 finishes flat or positive for the year, giving a more predictable outcome in neutral markets than a cap-based strategy. That is a useful complement to the Annual Point-to-Point cap option, even if the choice set is narrower than the open-market version of this product.

This annuity is built for long-term retirement dollars, not short-term cash needs. In year one you can withdraw up to 10% of premiums paid penalty-free; in years two and beyond it is up to 10% of account value annually. Anything above the free-withdrawal amount during the surrender period is subject to a withdrawal charge that starts at 8% and steps down over seven years, and a Market Value Adjustment — which moves the effective penalty up or down depending on where interest rates have moved since you bought the contract — can also apply. Required minimum distributions are expected to be accommodated, though the exact RMD treatment was not confirmed in detail in the available materials; verify directly before relying on it for an IRA. Nursing-home and terminal-illness surrender-charge waivers are available for qualifying situations. Even with those provisions, this is not a contract to treat like an emergency fund.

The headline cost is the rider fee: 1.20% per year, charged against your account value for the Guaranteed Income Builder. That fee is deducted whether or not you have activated income, so the math only works if you genuinely plan to use the lifetime-income feature. At 1.20%, it is a touch above some income-FIA peers in the 1.10% range, which is part of why this lands as a strong rather than top-tier option. Beyond the rider, the structural tradeoffs are what you would expect from any income-first FIA: index crediting is intentionally restrained to support the income guarantees. The Morgan Stanley version's crediting menu is limited to S&P 500 strategies and a fixed account — no access to alternative indices — which is a narrower set than the open-market version. For income-focused buyers that difference is minor; for buyers who value index diversification within the contract, it is worth knowing.

Legal Entity: Forethought Life Insurance Company

Parent: Global Atlantic Financial Group

A.M. Best Rating: A