Commentary March 08, 2022 at 07:44 AM Share & Print
What You Need to Know
- American General Life is an arm of AIG Life & Retirement.
- The new annuity is part of the X5 family of indexed annuities.
- Annexus has focused on distributing non-variable indexed annuities and indexed universal life products.
Annexus is offering annuity specialists a product that could have strong appeal for nervous clients: a contract that can protect the holders against loss of principal.
The Scottsdale, Arizona-based company has started marketing the new X5 Accelerator Annuity contract from American General Life Insurance Company — an arm of AIG Life & Retirement.
The new contract is part of AIG Life & Retirement’s X5 family of single-premium, non-variable indexed annuities. A sibling, the X5 Advantage Annuity contract, came out in May 2020.
The new contract has a feature that might appeal to clients who could use a quick psychological boost: the issuer immediately adds a bonus, equal to 35% of the premium, to the lifetime income benefit.
The contract also comes with a multiplier feature that can increase lifetime income by 250% of net interest earned each year during the accumulation phase.
Holders can get crediting rates tied to the performance of investment indexes developed by PIMCO and Morgan Stanley Investment Management.
AIG Life & Retirement notes that there is no guarantee that the growth potential of an index annuity will keep pace with inflation or rising costs in retirement, and it warns that, in flat or down markets, no interest will be credited.
A contract holder can pay extra to get a guaranteed lifetime income benefit and a nursing home confinement benefits increase feature.
The nursing home confinement feature can double the annual income from the annuity if the holder becomes confined to a nursing home or to another specified type of long-term care facility. AIG Life & Retirement notes that the feature is not long-term care insurance.