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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.

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.”
3Morningstar Report: Alpha, Beta, and Now…Gamma

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 2019, fixed annuities—including FIAs—represented 58% of the total annuity market. As interest rates continued to decline in 2020, FIA rates were negatively affected, resulting in a sales drop of -24% from 2019 to 2020. Despite this, 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 interest rates begin to rise throughout 2021, FIA sales are expected to increase significantly due to improved product rates. Many carriers have already begun increasing their FIA rates in Q2 2021.


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 close to a 6% return overall, based on historic averages.4

GUARANTEED LIFETIME INCOME: FIAs can be used to generate guaranteed lifetime income with allocation flexibility and liquidity (beyond the surrender period).

Product information sourced directly from MidlandNational.com

1This benefit may not be available in all states.

2Secure Retirement Institute Fourth Quarter U.S. Annuity Sales Survey, (4/2020)

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.

4Whitepaper: Fixed Indexed Annuities: Consider the Alternative, Roger Ibbotson, (1/2018)

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.

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.

258446

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

06/20

From Lighthouse Life

What is a Life Settlement?

A life settlement is the sale of a policyowner’s life insurance policy for its market value. The policy must be in-force, which means active and has not lapsed. Policyowners may elect to terminate their policies for a variety of reasons:

  • The policy is no longer needed
  • Premiums have become too expensive
  • Cash surrender value has been depleted
  • Unanticipated liquidity need
  • Increased need to fund post-retirement income, long-term care, or other health needs

Instead of letting the policy lapse or surrendering it to the carrier, a life settlement enables the policyowner to sell their policy for its full market value. In addition to selling the entire policy, the policyowner may have the option to keep a portion of their policy for their beneficiaries, eliminate future premiums, or get immediate cash.


Why DPL Likes Life Settlements

Life settlements can help the financial lives of seniors by providing significantly greater resources in retirement from the sale of life policies than if they lapse or surrender their policy back to the insurance company. Instead of letting the policy lapse when it becomes unneeded or unaffordable, a policyowner can sell that policy through a life settlement.

A life settlement can generate up to four times or more value for policyowners than the policy’s cash surrender value. That’s found money for seniors to fund retirement investments, and to pay for costs of living, healthcare and long-term care.


How to Think About Life Settlements

When your client needs:

RETIREMENT INCOME: Clients needing additional assets for retirement can utilize a life settlement to sell their life insurance policy for its full market value.

TAX-FREE INCOME: In situations where the client is chronically or terminally ill, life settlement proceeds may be received tax-free. Life settlement proceeds for policyowners who are not chronically or terminally ill may be subject to taxation depending on a number of factors.

What are the qualifications for a life settlement?

  • The insured is age 70 or older (some people under 70 may qualify depending on other factors)
  • The life insurance policy is at least $100,000
  • The insured's health has typically changed since the policy was issued. Healthy insureds age 70 and above may also qualifiy depending on policy type

All information sourced directly from LighthouseLife.com.

Pacific Index Advisory 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 Market1

In 2019, fixed annuities—including FIAs—represented 58% of the total annuity market. As interest rates continued to decline in 2020, FIA rates were negatively affected, resulting in a sales drop of -24% from 2019 to 2020. Despite this, 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 interest rates begin to rise throughout 2021, FIA sales are expected to increase significantly due to improved product rates. Many carriers have already begun increasing their FIA rates in Q2 2021.


Why DPL Likes Pacific Index Advisory

Pacific Index Advisory offers clients well-known indexes along with three interest-crediting methods, including a performance-triggered option. The terms are for 5 and 7 years, with the caps and rates guaranteed for the entirety of the term. Pacific Index Advisory also offers an optional Interest Enhanced Death Benefit, which grows the death benefit annually by the interest credited to the contract, plus an additional 2% rollup. With these features, Pacific Index Advisory can help clients protect their retirement assets and provide for loved ones regardless of market performance.


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 allocation within client portfolios. They provide sequence of returns protection for those entering or in retirement, with close to a 6% return overall, based on historic averages.2

GUARANTEED LIFETIME INCOME: FIAs can be used to generate guaranteed lifetime income with allocation flexibility and liquidity (beyond the surrender period).

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

1Secure Retirement Institute Fourth Quarter U.S. Annuity Sales Survey, (4/2020)

2Whitepaper: Fixed Indexed Annuities: Consider the Alternative, Roger Ibbotson, (1/2018)

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.

Pacific Odyssey is a variable annuity with multiple benefits and more than 90 investment options. When electing living benefits, this Pacific Life product can be a great solution for clients desiring market growth with downside protection.


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 Odyssey®

Pacific Odyssey includes a standard Return of Premium Death Benefit, and offers both an optional accumulation benefit (Protected Investment Benefit)  and income benefit (Enhanced Income Select). The Protected Investment Benefit provides a 5-year period with 90% account value protection, and a 10-year period with 105% market protection. When electing this benefit, clients have unlimited growth potential since there are no caps, up to 80% equity exposure, and locked-in pricing for both the 5- and 10-year terms. Because the pricing of this benefit is based on the purchase payment, as the account grows, the cost will not increase.

While the Protected Investment Benefit is designed to protect principal, the Enhanced Income Select is built to help clients increase their retirement income potential regardless of market conditions. This Guaranteed Lifetime Withdrawal Benefit provides a higher payout up front to address initial costs in retirement (up to 7%), and then reduces to 2.75% once the account value has been exhausted. A unique feature of this benefit is that clients have the option to elect the benefit after issue on the contract anniversary.


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.

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.”
3Morningstar Report: Alpha, Beta, and Now…Gamma

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.

From Great American Life

Index Protector 5 MVA offers clients growth opportunity and principal protection from market downside.
 

The Market1

In 2019, fixed annuities—including FIAs—represented 58% of the total annuity market. As interest rates continued to decline in 2020, FIA rates were negatively affected, resulting in a sales drop of -24% from 2019 to 2020. Despite this, 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 interest rates begin to rise throughout 2021, FIA sales are expected to increase significantly due to improved product rates. Many carriers have already begun increasing their FIA rates in Q2 2021.


Why DPL Likes Index Protector 5 MVA

Clients can choose from either the declared rate or 5 different point-to-point interest crediting strategies, which can be changed after one year. 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.

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 allocation within client portfolios. They provide sequence of returns protection for those entering or in retirement, with close to a 6% return overall, based on historic averages.2

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).

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

1Secure Retirement Institute Fourth Quarter U.S. Annuity Sales Survey, (4/2020)

2Whitepaper: Fixed Indexed Annuities: Consider the Alternative, Roger Ibbotson, (1/2018)

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.

From Great American Life

Index Protector 4SM offers clients growth potential with principal protection from market loss.
 

The Market1

In 2019, fixed annuities—including FIAs—represented 58% of the total annuity market. As interest rates continued to decline in 2020, FIA rates were negatively affected, resulting in a sales drop of -24% from 2019 to 2020. Despite this, 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 interest rates begin to rise throughout 2021, FIA sales are expected to increase significantly due to improved product rates. Many carriers have already begun increasing their FIA rates in Q2 2021.


Why DPL Likes Index Protector 4SM

Clients can choose from 5 different point-to-point interest crediting strategies and a declared rate strategy, which can be changed after one year. This product has a four-year surrender schedule with no market value adjustment, providing a protected growth solution for clients with short-term needs.


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 those of single premium immediate annuities (SPIAs), they generally have greater liquidity and flexibility.

When your client needs:

PRINCIPAL PROTECTION: With the principal protection from market downturns 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 allocation within client portfolios. They provide sequence of returns protection for those entering or in retirement, with close to a 6% return overall, based on historic averages.2

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).

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

1Secure Retirement Institute Fourth Quarter U.S. Annuity Sales Survey, (4/2020)

2Whitepaper: Fixed Indexed Annuities: Consider the Alternative, Roger Ibbotson, (1/2018)

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.

DPL


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

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