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From Pacific Life

Pacific Harbor offers a guaranteed interest rate for 3 or 5 years, helping advisors provide predictable, tax-deferred growth and principal protection at a competitive rate.
 

The Market

Since their introduction in the Commission-Free space, MYGAs (multi-year guaranteed annuities) have become one of the most popular DPL Member solutions for improving fixed income allocations. Generating reliable returns above today’s yields1 for a lesser duration, these simplified products can help advisors gather assets that would otherwise be held in cash or CDs, protect principal from market volatility, and ultimately improve portfolio performance.


Why DPL Likes Pacific Harbor

Pacific Harbor offers competitive 3- and 5-year guaranteed interest rates. Premium is protected from market downturns and accumulates tax-deferred, allowing for greater growth potential when compared to traditional fixed income instruments like bonds. Two rate levels are available based on premium amounts (<$200/$200K+).


How to Think About Commission-Free MYGAs

When your client needs:

PRINCIPAL PROTECTION: Fixed annuities are typically used for clients nearing or in retirement, as they protect principal from market downturns, yet provide a minimum guaranteed rate of return.

FIXED INCOME: Fixed annuities provide a consistent stream of income for clients that are looking to de-risk their portfolios from equities.

CASH REPLACEMENT: Fixed annuities can be used instead of cash investments, such as CDs or money market funds, to help generate better returns subject to the terms of the contract.2

What's Next?

Learn more about how can make a difference for your clients. Use our calculator or contact your DPL consultant.

More Materials from Pacific Life

Product information sourced directly from ria.pacificlife.com

1MYGA rates available through DPL compared to US Treasury Yield Curve, and comparable CDs via BankRate.com, June 1, 2022.

2Surrender charges, market value adjustments and other contract charges may apply that can reduce the premium. A surrender during the surrender charge period could result in a loss of premium. The surrender charge and market value adjustment may reset with renewal. Surrender charge structures and guarantee periods may vary by state.

Pacific Life, its affiliates, their distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor or attorney.
 
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.

Fixed annuities are long-term contracts designed for retirement.

Annuity withdrawals are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59½. For nonqualified contracts, an additional 3.8% federal tax may apply on net investment income. Withdrawals will reduce the contract value.

No guaranteed rate will be less than the minimum guaranteed rate stated in the contract. Pacific Life determines, at its discretion, annual interest rates in excess of the stated minimum guarantee in the contract.

The Guaranteed Minimum Surrender Value (GMSV) applies to contracts upon full surrender, annuitization, or death. The GMSV  is equal to 87.5% of purchase payments (minus any withdrawals), accumulated at a fixed interest rate.

Pacific Harbor Guaranteed Rate is named “Individual Limited Premium Deferred Annuity Contract with Market Value Adjustment Feature” in the contract.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Annuity products are not FDIC insured, may lose value, and are not guaranteed by any bank.

Fixed annuities issued by Pacific Life (Newport Beach, CA) are available through licensed, independent third parties.

From Midland National®

IndexMax ADVSM, a fixed index annuity (FIA) issued by Midland National, balances growth potential with asset protection, and features an ESG index option from BlackRock.
 

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 IndexMax ADV

Built for accumulation, IndexMax ADV provides tax-deferred growth potential with protection from market downturns. The product features three indices - BlackRock ESG US 5% Index ER, Fidelity Multifactor IndexSM 5% ER, and S&P 500 Low Volatility Daily Risk Control 5% Index ER - as well as a fixed account that credits a guaranteed rate. IndexMax ADV is available in 5- and 7-year terms to fit client portfolio needs.

IndexMax ADV offers two ways to accumulate - via annual performance credits (APC) and term participation credits (TPC). The APC is set at the beginning of the term; regardless of index performance, the accumulated value receives that credit for each year of positive performance. In the last year of the term, the TPC is added to the accumulated value if the index performs positively over the entirety of the term. The monthly average in the final year is then used to determine the ending value, which could be higher or lower then the actual value of the index at the end of the term. The index change between the ending and starting values is determined and then credited to the accumulation value.


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

What's Next?

Learn more about how can make a difference for your clients. Use our calculator or contact your DPL consultant.

More Materials from Midland National®

Product information sourced directly from MidlandNational.com

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.

The “S&P 500® Low Volatility Daily Risk Control 5% Index ER”, is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and have been licensed for use by Midland National Life Insurance Company® (“the Company”). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademarks have been licensed to SPDJI and have been sublicensed for use for certain purposes by the Company. IndexMax ADV (“Product”) is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or any of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices does not make any representation or warranty, express or implied, to the owners of the IndexMax ADV or any member of the public regarding the advisability of investing in securities generally or in this Product particularly or the ability of these Indices to track general market performance. S&P Dow Jones Indices only relationship to Midland National Life Insurance Company® with respect to these Indices is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The Indices are determined, composed and calculated by S&P Dow Jones Indices without regard to Midland National Life Insurance Company® or the Product. S&P Dow Jones Indices has no obligation to take the needs of the Company or the owners of this Product into consideration in determining, composing or calculating these Indices. S&P Dow Jones Indices is not responsible for and has not participated in the determination of the prices, and amount of IndexMax ADV or the timing of the issuance or sale of this Product or in the determination or calculation of the equation by which the Product is to be converted into cash, surrendered or redeemed, as the case may be. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of the Product. There is no assurance that investment products based on these Indices will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice.

The Fidelity Multifactor Yield Index 5% ER (the “Index”) is a multi-asset index, offering exposure to companies with attractive valuations, high quality profiles, positive momentum signals, lower volatility and higher dividend yield than the broader market, as well as U.S. treasuries, which may reduce volatility over time. Fidelity and its related marks are service marks of FMR LLC. Fidelity Product Services LLC (“FPS”) has licensed this index for use for certain purposes to Midland National® Life Insurance Company (the “Company”) on behalf of the Product. The Index is the exclusive property of FPS and is made and compiled without regard to the needs, including, but not limited to, the suitability needs, of the Company, the Product, or owners of the Product. The Product is not sold, sponsored, endorsed or promoted by FPS or any other party involved in, or related to, making or compiling the Index. The Company exercises sole discretion in determining whether and how the Product will be linked to the value of the Index. FPS does not provide investment advice to owners of the Product, nor to any other person or entity with respect to the Index and in no event shall any Product contract owner be deemed to be a client of FPS. Neither FPS nor any other party involved in, or related to, making or compiling the Index has any obligation to continue to provide the Index to the Company with respect to the Product.Neither FPS nor any other party involved in, or related to, making or compiling the Index makes any representation regarding the Index, Index information, performance, annuities generally or the Product particularly.

Fidelity Product Services LLC disclaims all warranties, express or implied, including all warranties of merchantability or fitness for a particular purpose or use. Fidelity Product Services LLC shall have no responsibility or liability whatsoever with respect to the Product.

The BlackRock ESG US 5% Index ER is a product of BlackRock Index Services, LLC and has been licensed for use by Midland National® Life Insurance Company. BlackRock®, BlackRock ESG US 5% Index ER, and the corresponding logos are registered and unregistered trademarks of BlackRock. The annuity product is not sponsored, endorsed, sold or promoted by BlackRock Index Services, LLC, BlackRock, Inc., or any of its affiliates, or any of their respective thirdparty licensors (including the Index calculation agent, as applicable) (collectively, “BlackRock”). BlackRock has no obligation or liability in connection with the administration or marketing of the annuity product. BlackRock makes no representation or warranty, express or implied, to the owners of the annuity product or any member of the public regarding the advisability of investing the annuity product or the ability of the BlackRock ESG US 5% Index ER to track general market performance. BlackRock does not guarantee the adequacy, accuracy, timeliness, and/or completeness of the Index or any data or communication related thereto nor does it have any liability for any errors, omissions or interruptions of the BlackRock ESG US 5% Index ER.

The BlackRock ESG US 5% Index ER (the “Index”) objective is to offer exposure to the iShares ESG Aware MSCI USA ETF subject to a 5% Target Volatility. The index manages to the Target Volatility by incorporating Fixed Income US Treasury iShares® ETFs and a Cash Constituent. The Index tracks the return of the weighted ETFs and any Cash Constituent, above the sum of the Return on the Interest Rate and the Index Fee. It is important to note your premium is not invested in the Index but in the insurance company’s general account, which may include investments that do not follow the environmental, social,and governance (ESG) practices of the BlackRock ESG US 5% Index ER.

Sammons Financial® is the marketing name for Sammons® Financial Group, Inc.’s member companies, including Midland National® Life Insurance Company. Annuities and life insurance are issued by, and product guarantees are solely the responsibility of, Midland National® Life Insurance Company.

Insurance products issued by Midland National® Life Insurance Company, West Des Moines, Iowa. Product and features/options may not be available in all states or appropriate for all clients. See product materials and state availability chart for further details, specific features/options, and limitations by product and state.

The IndexMax ADVSM is issued on base contract form AS203A/ICC20-AS203A, or appropriate state variations including all applicable endorsements and riders. This product, its features and riders may not be available in all states

Under current law, annuities grow tax deferred. An annuity is not required for tax deferral in qualified plans. annuities may be subject to taxation during the income or withdrawal phase. Neither Midland National, nor any agents acting on its behalf, should be viewed as providing legal, tax or investment advice. Your client should be advised to rely on their own qualified adviser.

AD2022-19117

FOR FINANCIAL PROFESSIONAL USE ONLY. NOT INTENDED FOR CONSUMER SOLICITATION PURPOSES.

From Great American Life

Advantage 5SM Advisory offers a guaranteed interest rate for 5 years, helping advisors provide predictable, tax-deferred growth and principal protection.
 

The Market1

In 2020, fixed-rate deferred annuity sales, including MYGAs, totaled $51.7B, a 9% increase from 2019, and the highest fixed-rate deferred annuity sales since the Great Recession. Sustained market uncertainty in 2020 made MYGAs appealing to investors seeking safety from market volatility with greater returns than CDs.


Why DPL Likes Advantage 5SM

Advantage 5 offers a competitive 5-year guaranteed interest rate. Premium is protected from market downturns and accumulates tax-deferred, allowing for greater growth potential when compared to traditional fixed income instruments like bonds. Two rate levels are available based on premium amounts (<$250 / $250K+).


How to Think About Commission-Free MYGAs

When your client needs:

PRINCIPAL PROTECTION: Fixed annuities are typically used for clients nearing or in retirement, as they protect principal from market downturns, yet provide a minimum guaranteed rate of return.

FIXED INCOME: Fixed annuities provide a consistent stream of income for clients that are looking to de-risk their portfolios from equities.

CASH REPLACEMENT: Fixed annuities can be used instead of cash investments, such as CDs or money market funds, to help generate better returns subject to the terms of the contract.2

What's Next?

Learn more about how can make a difference for your clients. Use our calculator or contact your DPL consultant.

More Materials from Great American Life

Product information sourced directly from https://www.gaconnect.com/

1LIMRA. "Secure Retirement Institute: Fourth Quarter Registered Index-Linked Annuities Propel Overall VA Sales to Pre-pandemic Levels.". January 2021.
2Surrender charges, market value adjustments and other contract charges may apply that can reduce the premium. A surrender during the surrender charge period could result in a loss of premium. The surrender charge and market value adjustment may reset with renewal. Surrender charge structures and guarantee periods may vary by state.

Product issued by Great American Life Insurance Company® (Cincinnati, Ohio), a wholly owned subsidiary of MassMutual, under contract form ICC21-P1151621NW, rider forms ICC20-R6032320NW and ICC20-R6032420NW (not available in Massachusetts). Form numbers, features and availability may vary by state.

From Guaranty Income Life Insurance Company

Guaranty Rate Lock MYGA offers guaranteed interest rates for 3–10 years, providing advisors and clients flexibility in duration selection.


The Market1

In 2020, fixed-rate deferred annuity sales, including MYGAs, totaled $51.7B, a 9% increase from 2019, and the highest fixed-rate deferred annuity sales since the Great Recession. Sustained market uncertainty in 2020 made MYGAs appealing to investors seeking saftey from market volatility with greater returns than CDs.


Why DPL Likes Guaranty Rate LockTM

Guaranty Rate Lock offers the most durations of any MYGA on DPL's platform, each with its own interest rate. Premium is protected from market downturns and accumulates tax-deferred, allowing for greater growth potential when compared to traditional fixed income instruments like bonds.

With 3 rate bands based on premium per duration, Guaranty Rate Lock allows advisors and clients to select the solution that's right for the portfolio. Additionally, the multiple durations can provide advisors with the opportunity to use multiple Guaranty Rate Lock MYGAs in a laddered approach.


How to Think About Commission-Free MYGAs

When your client needs:

PRINCIPAL PROTECTION: Fixed annuities are typically used for clients nearing or in retirement, as they protect principal from market downturns, yet provide a minimum guaranteed rate of return.

FIXED INCOME: Fixed annuities provide a consistent stream of income for clients that are looking to de-risk their portfolios from equities.

CASH REPLACEMENT: Fixed annuities can be used instead of cash investments, such as CDs or money market funds, to help generate better returns subject to the terms of the contract.2

What's Next?

Learn more about how can make a difference for your clients. Use our calculator or contact your DPL consultant.

More Materials from Guaranty Income Life Insurance Company

FOR FINANCIAL PROFESSIONAL USE ONLY.

Product information sourced directly from GILICO.com

1LIMRA. "Secure Retirement Institute: Fourth Quarter Registered Index-Linked Annuities Propel Overall VA Sales to Pre-pandemic Levels.". January 2021.
2Surrender charges, market value adjustments and other contract charges may apply that can reduce the premium. A surrender during the surrender charge period could result in a loss of premium. The surrender charge and market value adjustment may reset with renewal. Surrender charge structures and guarantee periods may vary by state.

All guarantees are based on the continued claims paying ability of the issuing company.

Premium taxes: the accumulation may be reduced for premium taxes if required by the state of residence.

There are risks, fees and charges associated with fixed annuities.

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.

From Midland National®

Midland National's Oak ADVantage MYGA offers a guaranteed interest rate for 3-, 5-, and 7-years, allowing advisors to utilize durations in line with client time horizons.
 

The Market1

In 2020, fixed-rate deferred annuity sales, including MYGAs, totaled $51.7B, a 9% increase from 2019, and the highest fixed-rate deferred annuity sales since the Great Recession. Sustained market uncertainty in 2020 made MYGAs appealing to investors seeking saftey from market volatility with greater returns than CDs.


Why DPL Likes Oak ADVantageSM

Oak ADVantage offers multiple durations, each with its own interest rate. Premium is protected from market downturns and accumulates tax-deferred, allowing for greater growth potential when compared to traditional fixed income instruments like bonds.

With a minimum purchase of $50,000, Oak ADVantage may be more accessible for clients wanting a guaranteed rate of return without tying up significant assets. Additionally, the multiple durations can provide advisors with the opportunity to use multiple OakADVantage MYGAs in a laddered approach.


How to Think About Commission-Free MYGAs

When your client needs:

PRINCIPAL PROTECTION: Fixed annuities are typically used for clients nearing or in retirement, as they protect principal from market downturns, yet provide a minimum guaranteed rate of return.

FIXED INCOME: Fixed annuities provide a consistent stream of income for clients that are looking to de-risk their portfolios from equities.

CASH REPLACEMENT: Fixed annuities can be used instead of cash investments, such as CDs or money market funds, to help generate better returns subject to the terms of the contract.2

What's Next?

Learn more about how can make a difference for your clients. Use our calculator or contact your DPL consultant.

More Materials from Midland National®

FOR FINANCIAL PROFESSIONAL USE ONLY.

Product information sourced directly from MidlandAdvisory.com

1LIMRA. "Secure Retirement Institute: Fourth Quarter Registered Index-Linked Annuities Propel Overall VA Sales to Pre-pandemic Levels.". January 2021.
2Surrender charges, market value adjustments and other contract charges may apply that can reduce the premium. A surrender during the surrender charge period could result in a loss of premium. The surrender charge and market value adjustment may reset with renewal. Surrender charge structures and guarantee periods may vary by state.

All guarantees are based on the continued claims paying ability of the issuing company.

Premium taxes: the accumulation may be reduced for premium taxes if required by the state of residence.

There are risks, fees and charges associated with fixed annuities.

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.

Sammons Financial® is the marketing name for Sammons® Financial Group, Inc.’s member companies, including Midland National® Life Insurance Company. Annuities and life insurance are issued by, and product guarantees are solely the responsibility of, Midland National® Life Insurance Company.

Insurance products issued by Midland National® Life Insurance Company, West Des Moines, Iowa. Product and features/options may not be available in all states or appropriate for all clients. See product materials and state availability chart for further details, specific features/options, and limitations by product and state.

The Oak ADVantageSM is issued on form ICC21-AR204A/AS204A (contract), ICC20-AR380A/AR380A, and ICC19-AR360A/AR360A/AR151A04 (riders/endorsements) or appropriate state variation.

Under current law, annuities grow tax deferred. An annuity is not required for tax deferral in qualified plans. annuities may be subject to taxation during the income or withdrawal phase. Neither Midland National, nor any agents acting on its behalf, should be viewed as providing legal, tax or investment advice. Your client should be advised to rely on their own qualified adviser.

Form #34386Y

Pacific Advisory Variable Annuity provides tax-deferral for more than 100 investment options, with an optional living benefit designed to help increase future retirement income in all market conditions.


The Market

At nearly $2 trillion in size1, it’s no surprise that nearly half of investors own an annuity, and even more are interested in the idea of guaranteed lifetime income.2 Annuities are often purchased by investors to generate guaranteed lifetime income, but can provide additional benefits to potentially help increase retirement income, maximize tax-efficiency of assets, or ensure a legacy for loved ones.


Why DPL Likes Pacific Advisory Variable Annuity

Pacific Advisory Variable Annuity provides tax-deferred access to 100+ investment options and allocation models, all with expense ratios of 1.00% or less. Investors can also purchase optional benefits for an additional cost, including a Return of Investment Death Benefit (0.15%), and Portfolio Income Protector (1.25% single/1.35% joint).

Portfolio Income Protector provides a guaranteed minimum withdrawal benefit, allowing investors to lock in market gains when markets are up, or a simple interest credit to the account when markets are underperforming (for up to 10 years). When your client is ready to begin taking income, the benefit provides a withdrawal percentage guaranteed for life. Additionally, advisory fees can be deducted from the annuity without impacting the optional benefits.


How to Think About Commission-Free VAs

When your client needs:

ANNUITY RESCUE+:  For clients looking to move assets from their high-cost traditional annuity into a low-cost, Commission-Free product, a “1035 exchange” may be appropriate. Annuity Rescue+ may help clients achieve:

  • Low cost — if the goal is simply to achieve the lowest cost, DPL recommends using an investment-only variable annuity.

  • Guaranteed income — often clients purchase an annuity because they like the guaranteed income feature. Depending on your investment approach, DPL will find the product that is best suited for you and your client.

  • Return of premium — utilizing a 1035 exchange into a solution with a return of premium benefit can be a thoughtful way of essentially “locking in gains,” as the amount of the new premium will include any gains from the previous annuity. DPL brings several very low-cost and innovative strategies.

TAX DEFERRED GROWTH:  For high income earners, low-cost annuities can provide tax deferral to benefit portfolio growth during a client’s accumulation phase. Studies show that tax deferral can add 1.00% to 2.00% of additional net return to a client’s portfolio, when locating tax-inefficient investments within the annuity.3

GUARANTEED LIFETIME INCOME:  While other product types are generally better options for guaranteed lifetime income, variable annuities can provide the greatest investment flexibility of the product types that offer this feature — potentially generating additional growth of the portfolio. It may be more appropriate to use a low-cost VA during the accumulation phase and then, when the client is ready to begin taking out guaranteed lifetime income, move into the best available income product.

What's Next?

Learn more about how can make a difference for your clients. Use our calculator or contact your DPL consultant.

Product information sourced directly from: https://www.pacificlife.com

1Insured Retirement Institute, 2019; https://www.myirionline.org/newsroom/newsroom-detail-view/iri-issues-second-quarter-2019-annuity-sales-report.
2Insured Retirement Institute (IRI), “The Language of Retirement 2017: Advisor and Consumer Attitudes Toward Income in Retirement.” https://www.myirionline.org/docs/default-source/research/iri_whitepaper_final_singlepg.pdf?sfvrsn=2 
3Morningstar Report: The Value of a Gamma Efficient Portfolio, 2017; https://www.morningstar.com/content/dam/marketing/shared/research/foundational/831611-GammaEfficientPortfolio.pdf

Your clients should consider a variable annuity’s investment objectives, risks, charges, and expenses carefully before investing. Go to pacificlife.com for prospectuses containing this and other information. Encourage them to read it carefully.

Variable annuities are contracts purchased from a life insurance company that are designed for long-term retirement goals and are subject to market risk, including loss of principal.

No investment strategy insures a profit or protects against losses in a down 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. In addition to surrender charges, withdrawals are subject to income tax.

Principal's Disability Income Insurance provides clients with Commission-Free protection from the unexpected.


The Market1

As of 2020, the size of the Disability Insurance industry is estimated at nearly $20B, with a projected growth of only 0.5% this year. Individuals typically access disability insurance through their employer-sponsored plans, but in light of 2020's economic contraction, fewer employees results in fewer disability insurance plans being purchased. As the economy stabilizes and more individuals return to the workforce, the growth rate can begin tracking at its YOY average of 0.9% (2015-2020).


Why DPL Likes Disability Income Insurance

Your clients protect their homes and vehicles while often overlooking their most valuable asset - their ability to earn income. While many clients have emergency savings, not being able to work for several months, a year, or longer could completely exhaust those funds. Disability Income Insurance works much like an emergency fund in the event of the unexpected - if your client is too sick or hurt to work, they receive a monthly benefit, similar to a paycheck. These benefits help clients continue to pay the bills so they can focus on taking care of themselves.

Through Principal, individuals can access disability insurance if their employer does not offer a disability insurance option, provided they're working at least 30 hours / week. Principal also offers multiple riders on their disability insurance product, allowing for customization to better fit an individual's needs.


How to Think About Commission-Free Disability Income Insurance

When your client needs:

INCOME REPLACEMENT: A client's ability to earn income is their most important asset. With 1 in 4 of today's 20-year-olds predicted to become disabled before they retire2, Disability Income Insurance can provide income replacement in the event they're not able to work due to illness or injury.

More Materials from Principal®

1Industry Market Research, Reports, and Statistics. (2020). Retrieved August 20, 2020, from https://www.ibisworld.com/industry-statistics/market-size/disability-insurance-united-states/.

2“The Facts about Social Security’s Disability Program,” Social Security Administration Publication No. 05-10570. (January 2019). Retrieved October, 2019 from https://socialsecurity.gov.

Principal's Term Life Insurance offers affordable coverage for a specified period of time, with the option to convert to a permanent policy in the future.


The Market1,2

In the Q1 2020, the US life insurance industry lost more than $50B, as most life insurance companies participate in the stock market to generate their returns. This loss will have a greater impact on universal life plan pricing than it will term insurance. Term life is more insulated from market volatility largely because it carries no cash value, unlike whole life policies. Even during the global COVID-19 pandemic in 2020, term life insurance has largely maintained both pricing and underwriting process.


Why DPL Likes Term Life Insurance

Term life insurance offers an affordable solution for ensuring your clients' loved ones are provided for and that beneficiaries aren't burdened by legacy debts. Term life insurance polices are designed to insure a policy owner for a specific period of time (10, 15, 20, and 30 years). While term life insurance carries no cash value like whole life policies, the reduced costs can allow clients to invest the difference in premium in more growth-oriented assets to further "self-insure".

Another benefit of Principal's term life insurance is the their accelerated underwriting application process. This unique process helps eliminate lab testing and medical examines for 45 to 55% of Standard, Super Standard, Preferred, and Super Preferred applicants3. Principal's Term Life Insurance also offers the option to convert to a permanent policy, which can protect clients if their health changes after purchasing a term policy.


How to Think About Commission-Free Term Term Life Insurance

When your client needs:

LIFE INSURANCE: Term life insurance pays a death benefit to help client beneficiaries meet their current needs. It allows clients to qualify for life insurance based on their current health, and provides cost-effective coverage for short- or long-term needs.

LEGACY PLANNING: Term life insurance provides the flexibility to convert the Term policy to a permanent policy in the future, helping to solidify estate plans if a client's health changes after the policy is issued.

More Materials from Principal®

1Knueven, L. (2020, June 23). The US life insurance industry lost $50 billion in the first quarter of 2020, but the cheapest type of life insurance should also be the least affected. Retrieved September 03, 2020, from https://www.businessinsider.com/personal-finance/life-insurance-industry-lost-money-term-policies-unaffected-2020-6
2Knueven, L. (2020, June 15). As the coronavirus pandemic lingers, life insurance companies are getting stricter about who they will cover. Retrieved September 03, 2020, from https://www.businessinsider.com/personal-finance/life-insurance-changes-coronavirus-affect-international-travelers-seniors-2020-6
3Applicants qualify for Accelerated UnderwritingSM based on age, personal history and face amount requirements.

Capital Income, a fixed index annuity issued by Midland National, offers a health-activated income multiplier feature to further provide client peace of mind.1
 

The Market2

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 Capital Income

Like all FIAs, Capital Income provides tax-deferred growth potential with complete principal protection from market downturns. Capital Income provides a guaranteed lifetime withdrawal benefit (GLWB), available for an additional cost, which offers an increasing payout option to help keep pace with inflation. A level payout option is also available for the GLWB.

A unique feature of this GLWB is the health-activated income multiplier feature. If an unpredictable event renders a client unable to perform at least two of six "Activities of Daily Living" (ADLs)3 as defined by the contract, their lifetime payment amount can double for up to five years of payments as long as they continue to meet the requirements on each annual payment date. Note that there is as 3-year waiting period from contract issue, and the benefit cannot be elected until three months following the lifetime payment election date.


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.

Many FIAs offer optional guaranteed lifetime income riders for an additional cost. While guaranteed income options from FIAs are generally a bit lower than can be achieved through single premium immediate annuities (SPIAs), they generally have greater liquidity and flexibility.

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.4

GUARANTEED LIFETIME INCOME: Through the use of a living benefit, FIAs can be used to generate guaranteed lifetime income with allocation flexibility and liquidity (beyond the surrender period).5

What's Next?

Learn more about how can make a difference for your clients. Use our calculator or contact your DPL consultant.

More Materials from Midland National®

Product information sourced directly from MidlandNational.com

1This benefit may not be available in all states.

22021 Annuity Sales Highest In 13 Years, LIMRA Reports (2/2022)

3Known as ADL Benefit Rider in the contract. See contract for full ADL definitions and additional conditions required to elect it. THE ADL BENEFIT RIDER (ALSO KNOWN AS THE HEALTH-ACTIVATED INCOME MULTIPLIER) IS NOT LONG TERM CARE INSURANCE NOR IS IT INTENDED TO REPLACE LONG TERM CARE INSURANCE.

4Fixed Indexed Annuities as a Fixed Income Alternative for Near-Retirees, Wade Pfau. (5/2019)

5FIAs may be subject to surrender charges, market value adjustment, and taxation for early withdrawals

 

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.
 

Sammons FinancialSM is the marketing name for Sammons® Financial Group, Inc.’s member companies, including Midland National® Life Insurance Company. Annuities and life insurance are issued by, and product guarantees are solely the responsibility of, Midland National® Life Insurance Company.

Insurance products issued by Midland National® Life Insurance Company, West Des Moines, Iowa. Product and features/options may not be available in all states or appropriate for all clients. See product materials and state availability chart for further details, specific features/options, and limitations by product and state.

The Midland National Capital IncomeSM is issued on base contract form AS202A/ICC19-AS201A or appropriate state variation including all applicable endorsements and riders.

"Income” or "lifetime income” refers to guaranteed payment of lifetime payment amounts (“LPAs”). It does not refer to interest credited to the contract. Advise clients to consult with their own tax professional regarding tax treatment of LPAs, which will vary according to individual circumstances.

Under current law, annuities grow tax deferred. An annuity is not required for tax deferral in qualified plans. annuities may be subject to taxation during the income or withdrawal phase. Neither Midland National, nor any agents acting on its behalf, should be viewed as providing legal, tax or investment advice. Your client should be advised to rely on their own qualified adviser.

The Transamerica Variable Annuity I-Share offers a living benefit designed to provide protected growth opportunity.


The Market

At nearly $2 trillion in size1, it’s no surprise that nearly half of investors own an annuity, and even more are interested in the idea of guaranteed lifetime income.2 Annuities are often purchased by investors to generate guaranteed lifetime income, but can provide additional benefits to potentially help increase retirement income, maximize tax-efficiency of assets, or ensure a legacy for loved ones.


Why DPL Likes the Transamerica Variable Annuity I-Share II

The Transamerica Variable Annuity I-Share II offers a low-cost option for tax-deferred accumulation, with an optional Guaranteed Minimum Accumulation Benefit (GMAB), Transamerica Principal OptimizerSM.

Transamerica Principal OptimizerSM: Provides a 7- and 10-year option for principal protection, with up to 90% and 100% of premium payments protected from market downside, respectively. Investors can allocate up to 70% of assets to equities with uncapped growth on policy value.


How to Think About Commission-Free VAs

When your client needs:

ANNUITY RESCUE+:  For clients looking to move assets from their high-cost traditional annuity into a low-cost, Commission-Free product, a “1035 exchange” may be appropriate. Annuity Rescue+ may help clients achieve:

  • Low cost — if the goal is simply to achieve the lowest cost, DPL recommends using an investment-only variable annuity.

  • Guaranteed income — often clients purchase an annuity because they like the guaranteed income feature. Depending on your investment approach, DPL will find the product that is best suited for you and your client.

  • Tax-efficient withdrawal — if your client needs to begin taking income from an annuity, DPL can bring products and strategies to tax-efficiently withdraw funds.

  • Return of premium — utilizing a 1035 exchange into a solution with a return of premium benefit can be a thoughtful way of essentially “locking in gains,” as the amount of the new premium will include any gains from the previous annuity. DPL brings several very low-cost and innovative strategies.

TAX DEFERRED GROWTH:  For high income earners, low-cost annuities can provide tax deferral to benefit portfolio growth during a client’s accumulation phase. Studies show that tax deferral can add 1.00% to 2.00% of additional net return to a client’s portfolio, when locating tax-inefficient investments within the annuity.3

GUARANTEED LIFETIME INCOME:  While other product types are generally better options for guaranteed lifetime income, variable annuities can provide the greatest investment flexibility of the product types that offer this feature — potentially generating additional growth of the portfolio. It may be more appropriate to use a low-cost VA during the accumulation phase and then, when the client is ready to begin taking out guaranteed lifetime income, move into the best available income product.

What's Next?

Learn more about how the can make a difference for your clients. Use our calculator or contact your DPL consultant.

More Materials from Transamerica

Product information sourced direction from https://www.transamerica.com/financial-professional/what-we-offer/products/annuities/transamerica-i-share-ii/

1Insured Retirement Institute, 2019; https://www.myirionline.org/newsroom/newsroom-detail-view/iri-issues-second-quarter-2019-annuity-sales-report.
2Insured Retirement Institute (IRI), “The Language of Retirement 2017: Advisor and Consumer Attitudes Toward Income in Retirement.” https://www.myirionline.org/docs/default-source/research/iri_whitepaper_final_singlepg.pdf?sfvrsn=2 
3Morningstar Report: The Value of a Gamma Efficient Portfolio, 2017; https://www.morningstar.com/content/dam/marketing/shared/research/foundational/831611-GammaEfficientPortfolio.pdf

Variable annuities are contracts purchased from a life insurance company that are designed for long-term retirement goals and are subject to market risk, including loss of principal.

Your clients should consider a variable annuity’s investment objectives, risks, charges, and expenses carefully before investing. Go to transamerica.com for prospectuses containing this and other information. Encourage them to read it carefully.

No investment strategy insures a profit or protects against losses in a down 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. In addition to surrender charges, withdrawals are subject to income tax.

Annuities issued in all states except New York by Transamerica Life Insurance Company, Cedar Rapids, Iowa and in New York by Transamerica Financial Life Insurance Company, Harrison, N.Y. Annuities are underwritten and distributed by Transamerica Capital, Inc. 1801 California St., Suite 5200, Denver CO 80202, FINRA member. FINRA member. References to Transamerica may pertain to one or all of these companies.

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FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR USE WITH THE PUBLIC.

06/20

DPL


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