With guaranteed lifetime income solutions now seeing larger growth than in the past due to inflation and market volatility, Nationwide announced it is launching its Nationwide Defender Annuity, a new registered index-linked annuity (RILA) aimed at growth potential and investment protection.
This marks Nationwide’s second offering in the RILA market, with the first being its Defined Protection (SM) Annuity product in 2020.
“With economic stressors like inflation, a potential recession and market volatility continuing to weigh on the minds of investors, it’s never been more important for advisors to be able to offer products to their clients that can help them achieve security in retirement,” said Mike Morrone, vice president of Nationwide Annuity business development, in a statement. “According to a recent Nationwide Retirement Institute survey, only 36% of investors feel confident they will survive the next financial crisis. With Nationwide Defender, we can help by offering customization that allows investors to pursue investment growth, protect against market risk and provide for their loved ones.”
The product offers one- to six-year terms depending on an investor’s goals and features five index investment options offering upside potential and customization to different investment objectives, including the S&P 500, MSCI EAFE, and the Russell 2000.
Nationwide Defender also offers a 10% and 20% buffer protection against a certain percentage of market losses, according to a release by the company. Nationwide takes on the first 10% or 20% of the loss, and investors are responsible for any loss beyond the buffer percentage.
Nationwide’s product will also include a spousal protection feature at no additional cost, with either of the two death benefit options offered within the annuity.
More investors choosing lifetime income protection
Anxious over investment protection due to volatility and a still-possible recession, a higher rate of investors are considering lifetime income solutions.
This is especially true for those already retired. Recent research from the Global Atlantic Financial Group found that 70% of investors between the ages of 55 to 75 have spoken to their advisors about conservative asset allocations, including potentially adding a portion of their portfolio into guaranteed products.
Another survey by Morning Consult for the American Council of Life Insurers (ACLI) found 54% of pre-retirees ages 45 to 65 years old are considering guaranteed lifetime income products that mimic pension plans.
The growing interest is not unfounded, shows other research. AllianceBernstein recently found that by incorporating insurance into their asset allocation, investors can improve sustainable withdrawal rates by 70% or more, with the most effective way to deliver insurance being through a qualified default investment alternative (QDIA).
SEE ALSO:
- Guaranteed Lifetime Income Solutions May Grow Retirement Spending Power
- Concerned Over Investment Protection, Retirees Look to Lifetime Income
- Economy has Retirement Savers Eyeing Guaranteed Lifetime Income, Financial Planning Options
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
