NU Online News Service, July 26, 4:15 p.m. – Hartford Financial Services Group Inc., Simsbury, Conn., is moving to bring skittish investors back to variable annuities by introducing the Principal First principal-guarantee rider.

The rider protects cash invested in Hartford’s variable annuities, assuring investors that they will get back at least as much as they put in, Hartford says.

Investors can pay to protect some of their investment gains as well as the initial principal after the fifth contract year, Hartford adds.

The rider comes with a number of restrictions, such as a limit on withdrawals — investors lose the principal guarantee if they withdraw more than 7% of the amount invested in any one year.

But Hartford is hoping the rider will appeal to VA investors who want some protection even when the stock market performs poorly.

“It will help investors who want to have confidence in the safety of an investment to get back into the equity markets,” says Bruce Ferris, a vice president of Hartford’s investment products unit.

Hartford says it will cover the cost of the guarantee by adding a daily charge. The daily charge will be the equivalent of an annual charge of 0.35% of the VA subaccount value.

The daily charge would continue until annuity payouts begin.

Principal First will be available beginning Aug. 5 to consumers who invest in Hartford’s Director, Hartford Leaders and Putnam Hartford Capital Manager variable annuity contracts.

The contracts are issued by Hartford’s Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company subsidiaries.

The Hartford says it designed Principal First for retired investors or those approaching retirement who want some exposure to stocks but are wary of risking their principal.

Although Hartford will start by selling the rider only with new contracts, Ferris says the company may offer the rider to holders of existing contracts later this year.