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Principal Protection

Principal Protection

Utilizing insurance to protect principal can provide meaningful benefits to a client's portfolio, as well as to their peace of mind. DPL’s offering of Commission-Free solutions can provide hedging strategies, fixed returns or complete downside protection.

Page Contents
The benefits of Commission-Free fixed indexed annuities for principal protection
Sequence of Returns Risk Mitigation

Fixed indexed annuities can be a powerful tool for principal protection, making them attractive for clients nearing or in retirement.

100% Downside Protection

A Commission-Free FIA can give clients’ assets complete downside protection with non-correlated exposure to the market.

Fixed Income Alternative

Research by Roger Ibbotson found fixed indexed annuities outperformed bonds over time by about 10%.

De-risking Option

Fixed indexed annuities should be considered as an alternative to bonds to de-risk portfolios from equities as clients near retirement.

How DPL helps RIAs address clients’ two biggest concerns

Sam Johnson explains how DPL can help advisors address two of their clients' biggest concerns: market volatility and outliving their money.

How DPL helps RIAs address clients’ two biggest concerns

DPL Senior Consultant Sam Johnson explains how DPL can help advisors address two of their biggest concerns: market volatility and outliving their money.

Insights and Resources

White Paper

Oct 28, 2016

The retirement income showdown regards finding the most efficient approach for meeting retirement spending goals...

David Lau


Feb 07, 2019

DPL Financial Partners Founder and CEO, David Lau, addresses why fiduciaries need to be involved...

Case Study

Many breakaway advisors have experience with insurance. But when starting a new RIA practice, advisors...

David Lau


Mar 27, 2020

Founder and CEO of DPL Financial Partners, David Lau, explains why advisors should compete in...


Feb 07, 2019

DPL’s David Lau talks about the reasons why DPL believes that annuities are an important...


Oct 11, 2018
DPL Founder and CEO, David Lau, and TIAA’s Dennis Rupp, Director of Insurance Distribution for...


Jul 04, 2015

Income annuities provide payments precisely matched to a client’s longevity while stocks provide opportunities for...

David Lau


Feb 07, 2019

DPL’s David Lau talks about considerations carriers need to consider when developing a distribution strategy...


Oct 01, 2016

The Journal recently talked with Finke to learn about his current research projects, his views...

Common Questions

Why do clients need principal protection?

The reasons clients need principal protection can be both financial and psychological. Principal protection is a very attractive feature for conservative clients. Some annuities offer market exposure (fixed index and buffer) while providing downside protection, giving advisors a means of increasing market exposure for these clients.

Principal protection is also extremely important for retirees and near-retirees. Market performance or sequence of returns risk is at its peak in the years just before and after retirement and can have a very significant impact of retirement income. Protecting from loss of principal is also a top concern for many retirees to ensure their peace of mind.

What is a buffer annuity?

A buffer annuity is a relatively new product type designed after a structured note. A buffer provides index investing options similar to a fixed index (FIA), but generally with more investing options. Unlike an FIA where principal is completely protected, buffer annuities offer limited downside protection which can either be structured to have the carrier absorb “first loss” or “tail risk”. Since downside protection is more limited than with FIAs, buffer annuities generally provide more upside potential in the indices.

What annuity types provide principal protection?

Simply by virtue of their structure these annuities provide principal protection: fixed (FA), multi-year guarantee (MYGA), fixed index (FIA), single premium immediate (SPIA), buffer and deferred income (DIA). Variable annuities can also offer optional principal protection features.

A fixed index annuity (FIA) provides principal protection, how do I determine the product cost?

Many FIAs have no explicit product cost. They are “spread” products like bonds or CDs. As such they should be evaluated in the same fashion, based on yield potential and payout rates. While FIAs generally have no product cost for the core product, income riders will have additional fees.

Have more questions about principal protection?


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DPL Financial Partners does business in the state of California as DPL Insurance Solutions
under California License #0M42434.

Securities offered through The Leaders Group, Inc. Member FINRA / SIPC
26 W. Dry Creek Circle, Suite 800, Littleton, CO 80120 • 303-797-9080
DPL Financial Partners is not affiliated with The Leaders Group, Inc.

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