How It Works

How the American Equity IncomeShield Works

Retirement Income Generation Options and Features

Retirement goals may differ, but most retirement needs are similar—protecting years of hard earned money and securing an income source for day-to-day expenses. 

The American Equity IncomeShield offers premium bonus options and multiple allocation choices for growth opportunities, while also providing guaranteed principal protection and flexible lifetime income payouts. To best appreciate the benefits of an annuity, we believe it helps to understand how an annuity can work for you. 

Premium Bonus

The first year premium paid on certain American Equity IncomeShield products receive a bonus percentage credited to the contract value and income account value that vests over time. This affords contract owners the ability to jump start their retirement revenue pool.

Allocation Options

Contract owners can allocate money using multiple interest crediting strategies:

  • Fixed interest strategy – set at issue and guaranteed for set period of time.
  • Fixed index strategy – premiums can be directed to an indexed strategy for additional interest growth opportunities linked to index performance.
    (Since money is not directly invested in stocks or bonds, there is no risk of loss due to index volatility)

Index Options

The IncomeShield utilizes indices widely regarded as the best single gauge of large-cap U.S. equities:

  • S&P 500® – consists of 500 leading U.S. stocks and is a common benchmark of the stock market
  • S&P 500 Dividend Aristocrats® Daily Risk Control 5% ER Index – volatility control index that consists of the S&P 500 members that have consistently increased dividends every year for at least 25-consecutive years (SPXD5UE)

Calculation Method Options

The IncomeShield offers multiple methods for calculating how interest rates can be credited to the contract based upon the performance of the index:

  • Cap Rate – the maximum rate to be used in determining any interest credits
  • Participation Rate – percentage that determines how much of any gain in the index will be credited to the contract

Locked-In Growth

Our product design provides the ability to lock in any interest credited to the contract without risk of losing money when an index decreases.

Retirement Income Access

Throughout the duration of the annuity contract, there are multiple ways to access funds.

  • Free Withdrawals: After the first contract year, the opportunity to take withdrawals up to 10% of the Contract Value without penalties.
  • Withdrawal and Surrender: For withdrawals in excess of the free 10% amount, or a full surrender, the contract value is subject to a charge based on the withdrawal and surrender charge percentages. Once the withdrawal and surrender charge period expires, no charges are applied.
  • Contract Maturity: Distribution from the annuity is set to begin at a maturity date established by the owner or specified in the contract.
  • Nursing Care Rider: After the first contract year, a one-time free withdrawal of up to 100% of the contract value is allowed if the owner is confined to a qualified nursing facility for a minimum of 90 days and the confinement begins after the contract issue date. Available to owners under age 75 at issue. Benefits and availability may vary by state. See brochure and disclosure for details. Not available in CA
  • Terminal Illness Rider: After the first contract year, a one-time free withdrawal of up to 100% of the contract value is allowed if the owner is diagnosed with a terminal illness and diagnosis occurs after the contract issue date.*^Available to owners under age 75 at issue. Benefits and availability may vary by state. See brochure and disclosure for details. Not available in CA
  • Income Rider Options: For additional lifetime income flexibility, owners can elect to add an income rider to the IncomeShield. If a rider is not selected on the IncomeShield 7 a no-fee rider will be provided. 

Death Benefit

Death benefit proceeds are paid to the named beneficiary(ies) with no surrender charge, plus 100% bonus vesting. Proceeds are generally paid in a lump sum; however, other income options are available.

Lifetime Income Benefit Rider

Multiple Lifetime Income Benefit Riders (LIBR) are available with the IncomeShield series. The LIBR helps secure a lifelong income source for owners 50+ at issue. The income payment amount to be received is measured by an income account value that is credited over time.   

There are a variety of rider options available with different income generation and distribution features that vary by product. These options include different interest crediting methods, accumulation periods and potential fees. Wellbeing Benefit riders are also available, allowing for increases in income payments for qualified care-related conditions detailed in the contract. There is a two-year waiting period before the benefit can be activated.

Additional details can be found in the IncomeShield 7 and IncomeShield 10 product brochures. For California, view  IncomeShield 7-CA and IncomeShield 9-CA product brochures. 

Rider Options  Interest Crediting Growth Period Income Available After Fee
 LIBR Option 1  Compound  15 Years  30 Days No fee
 LIBR Option 2  Simple  7 Years  1 Contract Year Annual 
 LIBR Option 3  Compound  15 Years   1 Contract Year Annual
Rider Options with Wellbeing Benefit
(Rider options with Wellbeing Benefit not available in CA)  
Interest Crediting Growth Period Income Available After Fee
 LIBR Option 4 with Wellbeing Benefit   Simple  7 Years  1 Contract Year  Annual
 LIBR Option 5 with Wellbeing Benefit   Compound  15 Years  1 Contract Year  Annual
Income payments from the LIBR can begin within 30 days depending on the rider option chosen. At time of election, the contract owners can choose either single or joint life payouts for a spouse. Payout factors are determined by age at the time of election. 



Annuity Contracts and riders issued under form series ICC17 BASE-IDX, ICC17 IDX-10-7, ICC17 BASE-IDX-B, ICC17 IDX-11-10, CA17 BASE-IDX-B, 17 IDX-11-9, ICC19 E-MPTP, ICC19 E-PTPC, ICC19 E-PTPR, ICC16 R-MVA, ICC20 R-LIBR-FCP, ICC20 R-LIBR-FSP, ICC20 R-LIBR-W-FCP, ICC20 R-LIBR-W-FSP,  ICC19 R-NCR, ICC19 R-TIR and state variations thereof. Availability may vary by state.
The "S&P 500®" is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by American Equity Investment Life Insurance Company®.  Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); Standard & Poor’s®, S&P® and/or Dow Jones® are trademarks of the SPDJI; and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by American Equity Investment Life Insurance Company®. American Equity Investment Life Insurance Company's® IncomeShield Series is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P. 
Tax Interpretations:  Neither American Equity Investment Life Insurance Company® nor any of its agents or representatives give tax, legal or investment advice. Consult a qualified advisor.
Annuities are products of the insurance industry and are not guaranteed by any bank or insured by the FDIC. Guarantees are based on the financial strength and claims paying ability of the issuing company.