Capital Income review

Yes, for the right buyer, with one caveat. This is a good annuity for someone who wants protected lifetime income, is working with a fee-based advisor, and values the built-in care benefit. The caveat is the disclosure gap: the available materials do not state a benefit-base roll-up rate, so before committing you should ask your advisor for the current income rider rate sheet and a personalized income illustration so you can actually compare the guaranteed income against competitors.

The main reason to buy Capital Income is to create guaranteed lifetime income that keeps paying even if the contract value runs to zero, while protecting principal from market losses along the way. The income rider is built in rather than optional, so the product has a single clear purpose. A secondary reason is the Health-Activated Income Multiplier, which can increase the income payment if you become unable to perform a set number of daily living activities, turning the contract into a partial substitute for care coverage. The relatively short 7-year surrender period is also a draw for income buyers who do not want to lock money up for ten years or more.

I think Capital Income is best for someone in the 55-to-75 range who is planning future retirement income, expects to defer withdrawals for several years, and works with a fee-based advisor who can fold this into a managed plan. Because the income rider is built in and the product is structurally an income vehicle, it fits qualified (IRA) and non-qualified money used for long-term income rather than near-term spending. It is less attractive for someone who wants pure accumulation, needs liquidity above the 10% free amount, wants to buy direct without an advisor, or wants a published roll-up rate they can model precisely before signing.

You are not buying stock market upside, and you are not really buying an accumulation product. You are buying a guaranteed lifetime income contract with principal protection wrapped around it. The accumulation value grows based on index crediting or a fixed account, but the income rider is the point of the contract. The insurer is promising to pay you a withdrawal amount for life once you activate, and that promise continues even if the underlying account value is depleted. The index strategies and the fixed account exist mainly to support that income guarantee, not to maximize growth, which is typical for income-first fixed indexed annuities.

Capital Income includes a Guaranteed Lifetime Withdrawal Benefit (GLWB) as a built-in feature, with a 1.00% annual fee charged against the end-of-year accumulation value. The way a GLWB works is that the insurer tracks a separate income base used only to calculate your lifetime withdrawal, then applies a withdrawal percentage tied to your age when you turn income on. Once activated, you can take that guaranteed amount each year for life, even after the actual account value reaches zero. The one important gap is that the available materials do not publish a roll-up rate or benefit-base bonus, which is the percentage the income base grows by each year you wait. That figure is normally the headline number on an income annuity, so its absence here means you should request the current rider rate sheet and an income illustration before buying. Without it, you cannot fairly compare this contract's future income to a competitor that does disclose its roll-up.

The most meaningful secondary feature is the Health-Activated Income Multiplier, an activity-of-daily-living (ADL) benefit rider. In plain terms, if you reach a point where you can no longer perform a defined number of daily living activities such as bathing, dressing, or eating, the rider increases your income payment for a period of time. That matters because long-term care is one of the largest unplanned retirement expenses, and many retirees are uninsured or underinsured for it. A care-activated income boost does not replace dedicated long-term care insurance, but it builds a real cushion into a product you are already buying for income. The contract also includes a nursing home confinement waiver (not available in South Dakota) that allows penalty-free withdrawal of the full accumulation value if you are confined to a qualified facility after the first contract year, which is a useful liquidity escape hatch in a genuine health crisis.

This is a long-term income contract, not a cash reserve, but its surrender terms are friendlier than most income FIAs. The 7-year schedule starts at 6% and steps down to 2% in the final year, which is shorter and lower than the 9-to-10-year schedules common in this category. Each year after the first, you can take up to 10% of the beginning-of-year accumulation value penalty-free. Required minimum distributions above that 10% amount are waived from both surrender charges and the market value adjustment, which is helpful for anyone holding this in an IRA past age 73. A market value adjustment (MVA) applies during the surrender period, meaning the penalty on larger withdrawals can move up or down depending on interest rate changes since you bought the contract. The nursing home waiver, where available, can release the full value in a qualifying care situation. Even with these provisions, anything above the 10% free amount during the first seven years can trigger both a surrender charge and the MVA, so this should not be treated as accessible savings.

The headline cost is the 1.00% annual GLWB rider fee, deducted from the accumulation value. That fee buys you the lifetime income guarantee and the care multiplier, so it is only worthwhile if you actually intend to turn income on; a buyer who never activates is paying for a benefit they never use. Because Capital Income is sold through the advisor channel, advisory fees of up to 1.50% annually may also apply, though these can be waived or drawn from a separate policy depending on how your advisor structures the relationship. There is no separate base-contract fee disclosed beyond the rider. On the crediting side, the materials list cap rates roughly in the 6%-to-9% range, participation rates from 100% to 140%, a 4.50% spread on one strategy, and a 3.25% fixed account guaranteed for seven years, though these are medium-confidence figures and rate-sheet dependent. The real tradeoff is that the layered costs (rider plus potential advisory fee) mean the growth side of this contract is modest, which is expected for an income-first design but worth naming plainly.

Legal Entity: Midland National Life Insurance Company

Parent: Sammons Financial Group

A.M. Best Rating: A+

Midland National is a large, established carrier and a member of Sammons Financial Group (the parent relationship is a lower-confidence detail in our source materials but is consistent with public filings). An A.M. Best rating of A+ places it among the financially stronger annuity issuers, which matters more than usual on an income product, since a lifetime income guarantee is only as good as the insurer standing behind it for decades.