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Pacific Index Advisory℠

From Pacific Life

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 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 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 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

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

What's Next?

Learn more about how Pacific Index Advisory℠ 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 https://www.pacificlife.com.

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

2Fixed Indexed Annuities as a Fixed Income Alternative for Near-Retirees, Wade Pfau. (5/2019)

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.

DPL


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