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Prudential Jumps Into Indexed Annuity Market

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Prudential Financial Inc. has jumped into the indexed annuity market with a single-premium contract that will help purchasers tie returns to the performance of hard assets.

The new PruSecure Fixed Indexed Annuity contract index menu includes the Dow Jones U.S. Real Estate Index and the Bloomberg Commodity Index as well as the S&P 500 index and the MSCI EAFE.

(Related: Prudential’s PGIM Is Said to Explore Entering ETF Marketplace)

Prudential is writing the annuities through its Prudential Annuities Life Assurance Corp. Prudential Annuities is based in Shelton, Connecticut.

The contract uses a point-to-point crediting strategy.

Purchasers can choose a one-year, three-year or five-year index term option.

The maximum possible cap rate is 32%.

Dianne Bogoian, head of product for Prudential Annuities, said in a statement about the new contract that many consumers want the kind of protection that an indexed annuity can provide against drops in asset value.

“Many investors remember the 2008 financial crisis and continue to be concerned about market risk,” Bogoian said.

Prudential Annuities has filed the contract with the Interstate Insurance Compact.

A copy of an actuarial memorandum on the compact website shows that purchasers will have a choice between a five-year surrender charge period and a seven-year surrender charge period.

Available issue ages range from 0 to 85.

The minimum single premium is $25,000.

A purchaser who wants to pay a single premium over $1 million will have to get permission from to do that from Prudential.

 — Read The Rise of the Volatility-Controlled Annuity on ThinkAdvisor.

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