The Post-DOL Ruling Era Begins: No-Fee Income Riders
- By Warren Yancey
- May 12, 2016
In the age of disclosure and in the midst of the DOL Ruling, No-Fee Income Riders are making their way onto the scene. We have new solutions that offer you a way to provide income solutions that allow clients retain control over the account value with access to an income rider, at no cost.
Two of the strongest annuity carriers have already launched a client-centric income solution without fees. Over the next couple months, we will take you on a deep dive of how these products work and how best to position.
Imagine a world where you no longer have to explain rider fees and how they affect the account value!
The first product is North American’s Income Choice 10 Fixed Indexed Annuity.###
This has a built-in Guaranteed Lifetime Withdrawal Benefit (GLWB) rider at no additional charge which provides a guaranteed 2% roll-up to the income account value, and also adds a “stacking credit” equal to 150% of the dollar amount of interest credited to the actual account value.
This is ideal for clients that want to guarantee some interest while also having added potential if the market performs well.
The case study pictured below shows best and worst case scenarios for a $250k initial premium with 10-year deferral. Even in the worst ten year period, the client would have received over $30,000 a year for as long as they live.
Allianz, the number one annuity carrier, also offers a no-fee income rider solution through their preferred line’s 222 product.###
To sell from the preferred line, advisors must meet certain qualifications. The 222’s Protected Income Value features a 20% premium bonus on all premium contributions made during the first three years and then an interest bonus equal to 50% of any fixed or indexed interest.
This is a great option for long-term planners looking for lifetime payments in the future as it requires a ten-year deferral.
These two offerings from North American and Allianz show that income products with more potential and flexibility than an immediate or deferred income annuity don’t necessarily require an annual fee.
As we move into a new post-DOL Ruling era, we expect and hope that more carriers will follow suit and release similar options for advisors and their clients.
For more information and marketing materials for Allianz’s 222 annuity, please contact our product specialist, Daniel Potter at 678-252-1784 or firstname.lastname@example.org.