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Midland National Puts ESG in Indexed Annuity

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What You Need to Know

  • Midland National, part of Sammons Financial, is adding ESG into annuity offering.
  • RetireOne is the distributor.
  • A BlackRock unit developed the ESG index.

Midland National Life Insurance Company is introducing a non-variable indexed annuity that has “ESG” on the menu.

An ESG index tries to take environmental, social welfare and corporate governance factors into account when evaluating investment opportunities.

Midland National says its new IndexMax ADV annuity offers purchasers access to the BlackRock ESG US 5% Index ER (BESGUVCX).

The product is the first non-variable indexed annuity to offer users an ESG index option, according to Midland National.

“BlackRock Index Services developed the index as part of its commitment to increasing access to sustainable investing through indexes that are linked to fixed index annuity (FIA) products,” according to Midland National, which is distributing the contract through the RetireOne insurance distribution platform.

The Players

Midland National is an arm of Sammons Financial Group. Its life insurance operations are based in Sioux Falls, South Dakota, and its annuity operations are based in West Des Moines, Iowa.

It operates in 49 states and the District of Columbia andsells its products through a network of about 12,000 licensed professionals.

RetireOne is an Aria Retirement Solutions program that supplies about 900 RIAs and fee-based advisors with fee-based insurance and annuity products.

The Product

The IndexMax ADV annuity is designed for fee-based advisors.

The contract is available with a five-year term or a seven-year term and is available for issue ages 0 to 85, with a minimum premium of $50,000, for a five-year term or a seven-year term, according to a Midland National brochure.

Holders can choose from an index menu that includes the Fidelity Multifactor Yield Index 5% ER (FIDMFYDN) or the S&P 500 Low Volatility Daily Risk Control 5% Index ER (SPLV5UE) as well as the BlackRock ESG index.

Holders can accumulate value by layering interest credits using either annual performance credits or term participation credit.

For the contract with the five-year term, for example, Midland National will pay an annual performance credit each year the underlying index goes up.

The annual performance credit rate “is set at the beginning of each term and will not change during your term,” the company says.

But, if the index change is zero or negative for a year, no annual performance credit will be paid, Midland National says.

For a holder of a contract with a five-year term who chooses the term participation credit crediting rate strategy, Midland National will  apply a credit after the fifth year “if the underlying index change is positive over the course of the five-year term,” according to Midland National.

The product provides an accumulation value withdrawal feature for holders who become confined to a qualified nursing home for 90 or more days.

The product also provides a death benefit feature. The beneficiary will receive the contract accumulation value or the minimum surrender value plus potential interest credits, according to Midland National.