How to Shop the Field for the Best Contractual Yield

If you are shopping for yield, you need to understand what yield actually means. Yield is not a marketing number, it is not a hypothetical projection, and it is not something you might get if everything goes right. Yield is a guaranteed percentage you can take, use, and spend.

This topic exists because too many people are told they bought an eight percent or nine percent annuity, when in reality they did not buy yield at all. They bought something else entirely, and the lines were blurred.

Key Takeaways

Contractual yield means guaranteed, spendable interest
Income rider growth rates are not yield
Multi-Year Guarantee Annuities are the annuity version of CDs
Bonuses and high percentages often reduce payouts later
If it sounds too good to be true, it is

What Yield Actually Means

Yield is simple. It is a guaranteed coupon, just like CDs, bonds, or money markets. It is a percentage you can rely on and access.

In the annuity world, real yield shows up in one place. Multi-Year Guarantee Annuities. These contracts provide a guaranteed rate for a set period of time, similar to a CD issued by a bank.

That is yield.

How to Shop Contractual Yield the Right Way

When shopping for yield, you should be able to compare contracts side by side. Duration matters. State matters. Carrier terms matter.

You should see the guaranteed rate clearly, not buried in illustrations or explained away with hypotheticals. When you shop yield properly, the highest contractual guarantees for a given time frame rise to the top.

That is how yield should be evaluated.

The Problem With Income Riders and Yield Confusion

Income Riders are commonly misunderstood and commonly misrepresented.

An Income Rider is an attachment to a policy, typically an Indexed Annuity or Variable Annuity. It creates a future lifetime income stream. It does not create yield.

The percentage growth on an Income Rider applies only to the income base. That income base is not real money. It cannot be cashed in. It cannot be transferred. It only exists to calculate a future paycheck.

Why Income Rider Growth Is Not Yield

Income Rider growth rates often sound attractive. Seven percent, eight percent, even nine percent.

Those numbers are not yield. They are not real. They are calculations used to determine future income payments and they stop once income begins.

You cannot peel off that growth. You cannot spend it. It is monopoly money used for one purpose only, calculating lifetime income.

Separating Real Money From Income Calculations

Think of the policy as two separate sides.

One side is the actual annuity contract, where real money lives. The other side is the Income Rider calculation, which exists only on paper.

They are not the same. Treating Income Rider growth as yield is incorrect and misleading.

Bonuses and High Percentages Explained

Bonuses are often paired with income growth percentages to make contracts look more attractive.

Bonuses are not free money. They are typically offset by reduced payouts later. The income calculation giveth and the payout calculation taketh away.

Nobody gives away free money in annuities.

Where Real Yield Actually Comes From

If you are looking for yield, you already know the traditional sources. CDs, bonds, money markets, dividends.

In the annuity space, Multi-Year Guarantee Annuities fill that role. They provide clarity, certainty, and contractual guarantees without confusion.

That is where yield lives.

Final Thoughts on Shopping for Contractual Yield

When shopping for annuities, words matter. Yield means something very specific.

If an agent claims a high percentage is yield, ask a simple question. Can I peel it off and spend it? If the answer is no, it is not yield.

Understanding this distinction protects you from bad pitches and expensive misunderstandings.

If you want to compare real contractual yields across carriers and durations, you can review Multi-Year Guarantee Annuities or speak with The Annuity Man team to evaluate guarantees side by side.