Power Index Advisory®, a fixed index annuity (FIA), balances protection with growth potential, and features a choice of two living benefit options to help clients generate more income for life.
The Market1
In 2021, fixed index annuity sales reached $63.7B, a 15% increase from 2020. 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, and the ability to add guaranteed lifetime income through a rider. As more investors seek ways to combat inflation, FIA popularity is only expected to increase.
Why DPL Likes Power Index Advisory
Designed exclusively for advisory accounts, this FIA offers a choice of two optional guaranteed lifetime withdrawal benefits (for an additional cost) to help clients increase their income potential:
Lifetime Income Max® - Income benefit base is guaranteed to increase by 10% each year prior to beginning withdrawals, with withdrawal rates up to 6.75%.
Lifetime Income Plus Multiplier Flex® - Income benefit base grows by doubling the amount of interest earned prior to beginning withdrawals, and matches the interest earned during withdrawals. The maximum withdrawal rate is 6.75%.
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 provided by Corebridge Financial, Inc.
12021 Annuity Sales Highest In 13 Years, LIMRA Reports. (2/2022)
2Fixed Indexed Annuities as a Fixed Income Alternative for Near-Retirees, Wade Pfau. (5/2019)
Fixed index 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.
A surrender during the surrender charge period could result in a loss of premium. Surrender charge structure may vary by state.
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.
Fixed index annuities are not a direct investment in the stock market. They are long term insurance products with guarantees backed by the issuing company. They provide the potential for interest to be credited based in part on the performance of specific indices, without the risk of loss of premium due to market downturns or fluctuation. Although fixed index annuities guarantee no loss of premium due to market downturns, deductions from the accumulation value for additional optional benefit riders or strategy fees associated with allocations to enhanced crediting methods could exceed interest credited to the accumulation value, which would result in loss of premium. They may not be appropriate for all clients. Interest credits to a fixed index annuity will not mirror the actual performance of the relevant index.
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