Life Health > Life Insurance

Pacific Life Adds Fee-Based Indexed Contract: Annuity Products

Your article was successfully shared with the contacts you provided.

Pacific Life Insurance Co. and Prudential Financial Inc. have put new annuity products on the shelves this month.

(Related: This Is the Basic Tax Rule for Annuity Payments)

Pacific Life introduced a fee-based indexed annuity, the Pacific Index Advisory contract.

In January, the Newport Beach, California-based company introduced a fee-based variable annuity product, the Pacific Odyssey contract.

Both products are aimed at financial professionals who are charging their clients fees, rather than collecting commissions from the insurers that write the annuities.

The U.S. Department of Labor has been trying to implement financial services product marketing standards that could push many financial professionals and distributors toward fee-based compensation models. The Trump administration has delayed implementation and may eventually change or kill Labor’s fiduciary rule effort, but many life insurers have been introducing annuity products based on the assumption that the shift toward fee-based compensation will continue.

Christine Tucker, a vice president in Pacific Life’s retirement solutions division, said in a statement about the new product that Pacific Life believes the number of fee-based annuity options is still limited.

“This new fee-based fixed indexed annuity offers advisors more choice and flexibility when developing their clients’ portfolios,” Tucker said.

A form filed with the District of Columbia shows that the version of the contract available there offers a fixed account option, an index-linked option and a market-value adjustment feature. It offers the purchaser a choice between a 5-year withdrawal charge structure and a 7-year withdrawal charge structure.

The contract issue ages are 0 through 85.

Two optional riders add investment strategies to the contract.

Two other riders can insure the purchasers’ ability to make withdrawals up to a protected payment amount limit.

The index menu includes options tied to the S&P 500 and the MSCI EAFE.

Prudential Adds Death Benefit Rider

Prudential Annuities, a unit of Prudential Financial, introduced the Legacy Protection Plus death benefit rider.

Increasing (Image: Thinkstock)

Prudential is offering the death benefit rider with its Premier Retirement variable annuities.

The company designed the rider for annuity purchasers who want to transfer wealth to beneficiaries.

The purchasers can name charities or other nonprofit organizations as the beneficiaries, the company says.

The rider offers a 7% guaranteed simple interest rollup rate, credited on each contract anniversary. The rollup death benefit can grow to be as much as 200% of the original annuity investment. When the annuity holder dies, the beneficiary will get either the account value or the rollup death benefit, whichever is greater, Prudential says.

Purchasers can allocate assets to Prudential’s asset-allocation models or build their own customized portfolios.

Prudential will issue the annuity and the rider through Pruco Life Insurance Co.

A form filed with the District of Columbia shows that the maximum rollup age for the version of the rider available there is 80. Prudential will assess an annualized charge of 0.8% of the account value.

Jim Mullery, head of distribution and sales at Prudential Annuities, said in a statement about the new option that the launch reinforces Prudential’s commitment to the variable annuity industry.

The product “showcases our growing range of valuable solutions that enable financial advisors to help Americans meet their financial planning, retirement and legacy needs,” Mullery said.

— Read The Glory Days Are Over: 4 Tips for Investing in a Low-Return World on ThinkAdvisor.