IncomeSource® Select, also known as a “longevity annuity”, is a deferred income annuity designed to help younger investors pre-fund a personal pension or older investors mitigate longevity risk in their later years.
The Market
Deferred Income Annuity sales totaled $2.5B in 2019, up 8% from 20181 . As interest rates are expected to slowly increase and equity markets are expected to become more favorable, income-focused annuity sales are predicted to continue to increase through 20232. For clients seeking deferred income without the market exposure of a variable annuity, a DIA provides a more predictable solution.
Why DPL Likes IncomeSource® Select
IncomeSource Select, also known as a “longevity annuity”, is a deferred income annuity designed to help younger investors pre-fund a personal pension or older investors mitigate longevity risk in their later years. It offers flexible premiums (initial $10,000 and $1,000 thereafter), a one-time emergency withdrawal,flexible income start dates, and QLAC eligibility for qualified accounts.
How to Think About Commission-Free DIAs
When your client needs:
GUARANTEED LIFETIME INCOME: DIAs are explicitly designed to manage longevity risk by generating an income stream that clients cannot outlive.
FIXED INCOME: With interest rates at historic lows, DIAs can provide a higher rate of consistent income payments than a fixed income strategy.
TAX MANAGEMENT: QLACs can help control RMDs for tax sensitive clients.
Product information sourced directly from: www.gaconnect.com
1 ”Annuity Sales Hit 11-Year High in 2019: LIMRA”; Annuity News; LIMRA Secure Retirement Institute (LIMRA SRI); February 18, 2020; https://insurancenewsnet.com/innarticle/annuity-sales-hit-11-year-high-in-2019-limra#.XmEfoKhKjIU
2”LFIA Sales Will Continue to Surge Into 2023, LIMRA Predicts”; Annuity News: LIMRA Secure Retirement Institute (LIMRA SRI); April 4, 2019; https://insurancenewsnet.com/oarticle/fia-sales-will-continue-to-surge-into-2023-limra-predicts
The purchase of an annuity within a retirement plan that already provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefits. An annuity should be used to fund a qualified plan based upon the annuity’s features other than tax deferral. All annuity features, risks, limitations, and costs should be considered prior to recommending the purchase of an annuity within a tax-qualified retirement plan. In addition to surrender charges, withdrawals are subject to income tax.
Withdrawals prior to age 59 1/2 may also be subject to a 10% federal tax penalty.