Structured Capital Strategies® Income offers clients index-linked upside potential with protection from market downside and a built-in income rider.
Registered Index Linked Annuities (RILAs) were first introduced by AXA (now Equitable) in 2010, and are now offered by multiple carriers. In 2020, RILA sales increased 38% ($4.8B) between Q1 and Q2, more than any other annuity product type. Concerns about equity market volatility may be one of the key factors contributing to this significant increase in RILA sales.
Why DPL Likes Structured Capital Strategies® Income
Clients can choose between 1-year and 3-year crediting terms, along with protection of -10% or -15% on the downside. In addition to traditional crediting methods, this product offers a "dual direction" strategy, where clients earn interest when the index goes up, but also earn interest if the index is down up to a certain amount. When clients are ready to take income, they can utilize the built in living benefit without having to transfer funds to a new product.
How to Think About Commission-Free Registered Index Linked Annuities
Registered Index Linked Annuities fall in the middle of variable annuities and fixed indexed annuities in terms of risk tolerance. Investors may utilize RILAs as an equity allocation replacement to capture upside while reducing portfolio risk, as these products often provide cushion against major market losses.
When your client needs:
PRINCIPAL PROTECTION: Registered index linked annuities are typically used for clients nearing retirement. They offer a level of protection against sequence of returns risk, while also providing the potential for higher returns due to higher cap rates than other structured insurance vehicles.
EQUITY REPLACEMENT: Registered index linked annuities can be utilized to de-risk portfolios from large equity allocations, while still providing market exposure.
GUARANTEED LIFETIME INCOME: Some RILAs can be used to generate guaranteed lifetime income through a living benefit, offering competitive payout rates and the potential to increase income in retirement.2
Product information sourced directly from: https://www.equitable.com
1LIMRA - "Secure Retirement Institute: Fourth Quarter Registered Index-Linked Annuities Propel Overall VA Sales to Pre-pandemic Levels." January 2021.
2Optional living benefits may come at an additional cost.
Investing in variable annuities involves risk, including potential loss of principal. There are risks, fees and charges associated with variable annuities and clients should be instructed to read the prospectus and/or summary prospectus carefully and to consider the investment objectives of the variable annuity as well as the underlying investment options carefully before making a purchasing decision.
Variable annuities are designed for long-term investing, such as retirement investing and are subject to market risk, including loss of principal.
Purchasing a variable annuity within a retirement plan that provides a tax deferral under sections of the Internal Revenue Code results in no additional tax benefit. A variable annuity should be used to fund a qualified plan based upon the variable annuity’s features other than tax deferral. All variable annuity features, risks, limitations, and costs should be considered prior to purchasing a variable annuity within a tax-qualified retirement plan.
Guarantees are backed by the financial strength and claims paying ability of the issuing insurance company