Entering an increasingly crowded market, annuity provider AIG Life & Retirement is launching the X5 Accelerator Annuity, which aims to be an accumulation and income solution that “emphasizes income growth from the outset to help consumers generate more income for retirement.”
And, after the SECURE Act opened the door for guaranteed income solutions such as annuities in retirement plans, demand from 401k participants for more options has steadily risen, prompting further legislation. Annuity sales have soared, reaching its highest levels in 14 years in 2021.
Developed in partnership with retirement solutions company, Annexus, the product is the latest addition to New York-based AIG’s suite of X5 offerings. According to the announcement, the new X5 product has front-end acceleration features including a bonus equal to 35% of the premium that is immediately added to the lifetime income benefit. Additionally, it has a multiplier that can increase lifetime income by 250% of net interest earned every year during the accumulation phase.
The X5 Accelerator features exclusive indices developed by asset managers PIMCO and Morgan Stanley Investment Management to provide upside growth potential. X5 Accelerator also provides principal protection against market downturns so principal cannot be lost.
Calling it a “valuable head start” on retirement planning, AIG’s President, Individual Retirement, Bryan Pinsky, says the annuity product provides an immediate bonus and strong multipliers.
Additionally, the X5 Accelerator includes the potential for an enhanced beneficiary benefit, that may provide a greater inheritance, plus a unique benefit that doubles the annual income should the policy holder become confined to a nursing home or other qualified facility.
“A real concern for many retirees is how to keep pace with rising costs and how to reduce the risk of running out of money in retirement,” said Don Dady, Annexus’ Co-founder, adding that the X5 suite of products is offering more choice and flexibility in creating a retirement plan that can help clients overcome risks.
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