Pacific Advisory Fixed Indexed Annuity provides access to well-known indexes, a performance-triggered crediting method option, and caps and rates guaranteed for the duration of the term selected.
The Market
Fixed index annuities (FIA) have reached record-breaking sales. FIA sales were $23.1 billion in the second quarter of 2023, up 42% from first quarter 2022 results.1 Improved interest rates and product innovation around cap rates helped make these products more attractive to advisors and clients alike. FIAs remain a highly popular product for investors seeking market growth with complete principal protection. As more investors seek ways to combat inflation and volatility, FIA popularity is only expected to increase.
Why DPL Likes Pacific Advisory Fixed Indexed Annuity
Like all FIAs, Pacific Advisory Fixed Indexed Annuity provides tax-deferred growth potential with complete principal protection from market downturns. Pacific Advisory Fixed Indexed Annuity offers clients well-known indexes along with two interest-crediting methods, including a performance-triggered option. This product does not apply a surrender penalty to early withdrawals but does have a market value adjustment (MVA) that ends after five years.
How to Think About Commission-Free FIAs
One advantage of utilizing FIAs is to leverage the scale of insurance carriers to deliver strong pricing in a packaged product, making it comparatively easy to implement, while also getting guaranteed downside market protection from the carrier.
When your client needs:
PRINCIPAL PROTECTION: With the principal protection from market risk provided by FIAs, they should be considered for clients nearing or in retirement to help mitigate sequence of returns risk.
FIXED INCOME: FIAs can be viewed as a fixed income replacement as client portfolios are de-risked from equities. They provide sequence of returns protection for those entering or in retirement, with an overall return above 6%, based on historic averages.2
Product information sourced directly from PacificLife.com.
1 LIMRA: Another Record-Breaking Quarter for U.S. Annuity Sales, May 2023
2 Fixed Indexed Annuities as a Fixed Income Alternative for Near-Retirees, Wade Pfau. (5/2019)
Fixed indexed annuities are contracts purchased from a life insurance company that are designed for long-term retirement goals.
While the interest rate credited to an indexed account is linked to the performance of an underlying index, premium payments made to a fixed index annuity are never directly invested in the stock market.
All guarantees are based on the financial strength and claims-paying ability of the issuing insurance company.
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.
Guarantees provided by annuities are subject to the financial strength of the issuing insurance company. Annuities are not FDIC or NCUA/NCUSIF insured; are not obligations or deposits of, and are not guaranteed or underwritten by any bank, savings and loan or credit union, or its affiliates; and are unrelated to and not a condition of the provision or term of any banking service or activity.