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

Yes, for the right buyer, with an honest caveat. It is a good annuity for someone working with a Morgan Stanley advisor who wants protected lifetime income, plans to defer for several years, and likes the idea of a benefit base that grows faster when interest is credited. The caveat is that this is not a guaranteed-roll-up product — your income engine is only as strong as the interest the indexed strategies actually earn, and the brochure does not list current caps or participation rates. If you want a contractually guaranteed roll-up you can model with certainty, a flat-roll-up income FIA will feel more reliable.

The main reason to buy this version is to work within an existing Morgan Stanley relationship while accessing Forethought's income-focused FIA. The product itself offers the same rationale as the open-market sibling: future protected lifetime income with principal protection, and a benefit base that grows at three times the interest the contract earns during deferral. For a Morgan Stanley client who believes the indexed strategies will credit meaningful interest over the deferral window, the multiplier can build a larger income base than a modest flat roll-up would. The built-in chronic-illness enhancement is a secondary reason — it can increase income if you later need qualifying care.

I think this annuity is best for someone in the Morgan Stanley ecosystem — roughly mid-50s through mid-70s — who wants to use long-term retirement dollars to fund future protected income and is comfortable with a deferral of several years before activating the benefit. Because the income engine rewards credited interest, it suits a buyer who is willing to accept performance-linked base growth in exchange for the multiplier's upside potential. It works in both qualified and non-qualified accounts. It is less attractive for someone who wants a guaranteed roll-up they can model with certainty, someone who needs liquidity above the 10% free amount, or someone who would prefer a broader index menu to increase the odds of crediting activity.

You are not buying stock market participation, and you are not buying a guaranteed roll-up. You are buying a principal-protected contract with a two-part income engine distributed through Morgan Stanley. The first part is the indexed crediting that grows your account value — here using S&P 500 and MSCI EAFE strategies plus a fixed account. The second part is a separate income benefit base — sometimes called the Withdrawal Base — that determines how much lifetime income you can draw. The Income Multiplier Benefit credits that benefit base at 300% of the fixed and indexed interest the contract earns during deferral years, and at 100% of credited interest after you activate income. Every dollar of interest the contract earns adds three dollars to your future income base while you wait. That is the whole pitch, and it lives or dies on how much interest the strategies actually credit.

The headline feature is the Guaranteed Lifetime Withdrawal Benefit with the Income Multiplier Benefit VII, built in rather than optional. During the deferral period, whatever fixed or indexed interest your contract earns is multiplied by three and added to the income benefit base. So if a strategy credits 4% in a year, the benefit base is credited 12% that year. Once you activate income, that multiplier drops to 100% — credited interest is added one-for-one. Your lifetime income is then calculated as a payout percentage applied to that benefit base, with the percentage rising as you get older at the time you activate.

The critical thing to understand is that this is performance-linked, not a guaranteed schedule. A flat 7% roll-up adds 7% to the base every year no matter what markets do. The 300% multiplier here can beat that handily in a good index year, but it can also fall short in a flat or negative year because three times zero is still zero. The Morgan Stanley version credits through S&P 500 and MSCI EAFE Annual Point-to-Point strategies and a fixed account — a solid but narrower menu than the open-market version. The brochure notes a 5.50% cap on the S&P 500 strategy and a 1.00% spread on the MSCI EAFE option; a fixed account rate of 3.25% and a triggered S&P 500 option at 4.75% are also available, though current rates should be confirmed directly before purchase.

The most meaningful secondary feature is the Income Enhancement Benefit, a built-in chronic-illness provision that can increase your income payout if you become unable to perform activities of daily living or need qualifying care. This matters because the years when people need the most cash are often the years they can least manage their finances, and a feature that raises income precisely then has real planning value. It is included at no separate stated charge in the materials provided, which is a genuine plus.

There is a tradeoff worth naming. Enhanced-income care features typically come with eligibility conditions, waiting periods, and benefit caps, and the brochure summary does not spell out the exact triggers or how long the enhanced payout lasts. Treat it as a helpful backstop, not a substitute for dedicated long-term-care coverage, and read the rider contract terms before counting on it.

This annuity is built for long-term retirement dollars, not short-term cash. After the first year you can take up to 10% of account value annually without a surrender charge (in year one it's 10% of premiums paid), and that free amount resets each contract year. Anything above the free amount during the seven-year schedule triggers a surrender charge that starts at 8%, holds at 8% in year two, then steps down to 7%, 6%, 5%, 4%, and 3% before reaching zero.

A market value adjustment — MVA — also applies, which means a withdrawal above the free amount can be adjusted up or down based on where interest rates have moved since you bought the contract. If rates have risen since issue, the MVA can deepen the cost of cashing out early. Required minimum distributions are generally accommodated. Even so, the 10% annual free amount plus the lifetime income payout are the real liquidity design here; this is not a contract to treat as emergency money.

The fee that matters is the 1.05% charge for the income rider, taken from the Withdrawal Base each year. That fee is charged whether or not you have activated income, so it is a real and continuous drag during the deferral years. The trade is explicit: you are paying 1.05% annually for the multiplier mechanism, the guaranteed lifetime income guarantee, and the chronic-illness enhancement. Whether that is worth it depends on whether the indexed strategies credit enough interest to make the 300% multiplier build a competitive income base — and on whether you actually turn income on, since the whole value proposition is wasted if you surrender for cash instead.

Beyond the rider fee, the structural tradeoffs are the usual FIA ones. Upside is limited by caps and spreads on the indexed strategies, and current figures should be confirmed directly. The 7-year surrender plus MVA limits access to principal. There is no premium bonus. The death benefit is clean — beneficiaries receive the full account value at no additional charge — which is a meaningful plus.

Legal Entity: Forethought Life Insurance Company

Parent: Global Atlantic Financial Group

A.M. Best Rating: A

ForeIncome II is issued by Forethought Life Insurance Company, part of Global Atlantic Financial Group. This is a mainstream income-focused FIA structure distributed here through the Morgan Stanley channel rather than the open market.