***UPDATE: Indexed annuities have become very popular in recent years. Check out the current top rates and new products, as well as latest articles and guides, here. ***
Yesterday I wrote about the benefits of fixed indexed annuities and what the Indexed Annuity Leadership Council wants Americans to know about them. There is a new fixed indexed annuity on the market now and it has one main difference from many of the others. Nationwide Financial is now selling an indexed annuity called New Heights. This information comes from Annuity News’ “Nationwide Financial Launches Indexed Annuities,” by Cyril Tuohy. With sales of indexed annuities increasing over the past couple years, Nationwide wanted to join the market for these important financial products. Fixed indexed annuity sales increased 15.1% from the third quarter of 2012 to the third quarter of 2013. The year to date sales at the end of the third quarter were up 4.7% from 2012.
One big difference with Nationwide Financial’s indexed annuity is that its growth is not capped. Their senior vice president of life insurance and annuities says that this uncapped earning potential is rarely found in the indexed annuity marketplace. New Heights offers customers a choice between a guaranteed lifetime income benefit rider or a larger death benefit payment to their heirs. Both options come with an added cost to the consumer. Fixed indexed annuities are designed to offer customers principal protection along with gains that are tied to a particular market index. If the index rises in value, your indexed annuity rises in value as well. Most indexed annuities cap the increase that you will actually receive though. If the S&P 500 gains 30% in a year, your gain might be capped at 7-10%. But with low interest rates, this is still a welcome increase to some other fixed rate products. With Nationwide’s New Heights though, your gain is not even capped. When markets lose value, indexed annuity account values are protected from declines.
Nationwide has partnered with Annexus to market and distribute their New Heights indexed annuity. This indexed annuity designer and wholesaler gives Nationwide access to an independent distribution channel and a plethora of information that they didn’t previously have access to. Starting in March, Nationwide’s indexed annuity will be sold through their sales agents, bank and wirehouse channels, and independent distributors. The combination of benefits from fixed annuities and variable annuities make indexed annuities popular among planners looking for safety and guarantees with their finances. Principal protection combined with growth potential and no cap on market gains make New Heights a great addition to the indexed annuity product line.
Written by Rachel Summit