As an investment-oriented variable annuity, EliteDesigns may help your clients solve for wealth accumulation challenges over the long-term.
The Market
At nearly $2 trillion in size,1 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.
How EliteDesigns Works
EliteDesigns from Security Benefit is a no-load, investment-oriented variable annuity, designed to help clients solve for wealth accumulation challenges over the long-term. It features a robust investment platform of more than 300 investment options, including alternative strategies. When ready to begin taking income, clients can elect to utilize the Fixed Period Annuity Option, allowing for an exclusion ratio on income payments for a defined period. This option helps to minimize tax liabilities while maximizing after-tax income from withdrawals.
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:
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Low cost — if the goal is simply to achieve the lowest cost, DPL recommends using an investment-only variable annuity.
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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.
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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.
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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.
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.securitybenefit.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
"Annuity Rescue+" is a term DPL uses to describe the tax-free exchange of one variable annuity in order to positively impact a client's financial plan. This term is not affiliated with Security Benefit.
Your clients should consider a variable annuity’s investment objectives, risks, charges, and expenses carefully before investing. Go to securitybenefit.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.
Security Benefit Life Insurance Company issues annuities in all states except New York. A Security Benefit subsidiary, First Security Benefit Life Insurance and Annuity Company of New York, Albany, New York, offers the EliteDesigns Variable Annuity in the state of New York. For information about that annuity, go to www.FSBL.com.
All opinions and advice on this page is that of DPL and not Security Benefit or its subsidiaries and affiliates, including but not limited to Security Distributors, Security Benefit Life Insurance Company and/or First Security Benefit Life Insurance and Annuity Company of New York.
The EliteDesigns Variable Annuity, form V6209, is a flexible premium deferred variable annuity issued by Security Benefit Life Insurance Company (SBL) and distributed by Security Distributors, a subsidiary of SBL. SBL is a subsidiary of Security Benefit Corporation (Security Benefit).
Neither Security Benefit nor its affiliates are related to DPL. EliteDesigns is a registered mark of Security Benefit Corporation.