Magazine article American Banker

Nationwide Rider Adds Flexibility to Life-Income Option

Magazine article American Banker

Nationwide Rider Adds Flexibility to Life-Income Option

Article excerpt

Nationwide Financial Services Distributors Agency Inc. announced today the introduction of a rider for its variable annuity products sold through banks that gives investors more flexibility to preserve principal from market volatility.

David Giertz, the president of the division of Nationwide Financial Inc. in Columbus, Ohio, that markets through banks, said in an interview Tuesday that the new feature, Capital Preservation Plus Lifetime Income, offers protection, flexibility, and lifetime income.

The rider allows the allocation of money into a variable annuity for a term of five, seven, or 10 years during which the principal and a rate of return are guaranteed, said Mr. Giertz, and it enables customers to take withdrawals of 4% to 7% a year, depending on their age when the withdrawals begin, in payments that are guaranteed for life, even if the contract value reaches zero.

MetLife Inc., Manulife Financial, Jackson National, Lincoln Financial, and Allstate are among the insurers that introduced so-called next generation living-benefit annuities last year, according to Financial Research Corp. in Boston.

The rider helps Nationwide stand apart from competitors because it lets clients make financial decisions at a later date, Mr. Giertz said. "At the end of five, seven, or 10 years, clients can choose what they would like to do with their money in the withdrawal phase," he said. Customers could take the optional guaranteed income withdrawals, keep their money in the annuity, delay withdrawals until a later age, or take out all their money at once.

Mr. Giertz declined to discuss sales expectations or goals for the product but said he expects the rider's flexibility to be received well by bank customers. Nationwide has more than 400 bank relationships, and it sold $2.6 billion of products through financial institutions in 2004.

"The other riders out there don't combine all three [protection, flexibility, and lifetime income] into one solution," he said. …

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