The Transamerica Variable Annuity I-Share offers a living benefit designed to provide protected growth opportunity.
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.
FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR USE WITH THE PUBLIC.