New Fixed Index Annuity Balances Growth and Protection

One of the many goals of most retirement planners is learning how to balance growth potential with principal protection when markets get volatile. In an effort to address this concern, Midland Retirement Distributors, a distribution business of Sammons Institutional Group, has launched a new fixed index annuity. According to a recent press release, Summit Navigate was designed for consumers who are close to retirement, layering two interest-crediting strategies to help calm nerves in this uncertain market. 

“It’s a very real struggle – protecting the initial premium yet still taking advantage of long-term market upswings,” said Bill Lowe, president of Sammons Institutional Group. “This innovative fixed index annuity directly addresses market uncertainty that so many customers fear.”

The two types of interest credits that are layered over the term of the investment are an annual performance credit (APC) and a term participation credit (TPC)in the final year of the term. They work together to offer greater growth potential, taking advantage of the long-term point-to-point crediting method.

“The challenge that often exists with long-term point-to-point crediting methods is the client will not see any credits until the end of the FIA’s term. That is precisely why we built in an annual performance credit that provides the opportunity to add account value each year the index is positive,” said Lowe. “With the dual focus of the APC in the short-term, and the incentive of accumulated point-to-point interest credit at the term end, the Summit Navigate gives the customer potential for interim credits and the opportunity for long-term growth potential of the index.” 

Both the annual performance and term participation credit rates are set at the onset of the contract and do not change through the surrender charge period. Like any other fixed index annuity, the goal is to protect against market loss while providing stable growth potential. The term participation credit, in this case, can optimize potential growth by capturing the previous years’ of market performance. 

“Our goal is to help clients fund their retirement plans and that means forecasting potential challenges and being able to adapt to a fluctuating marketplace,” added Lowe. “The innovative Summit Navigate can protect clients from downside market fluctuation, create opportunities for annual growth over the contract term, and reward clients with long-term index performance at the end of the period.”

Written by Rachel Summit

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