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Nationwide Teams With Annexus to Add Indexed Annuity

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What You Need to Know

  • The company is adding benefit guarantees to the product in the face of very low interest rates.
  • Nationwide also has a partnership with Envestnet's MoneyGuide program.
  • One possible market: millennials.

Nationwide has worked with Annexus to create the Nationwide New Heights Select annuity, a new indexed annuity that’s filed as a non-variable product.

Some insurers have said they will be eliminating or minimizing sales of annuities with benefits guarantees, because of concerns about the effects of low interest rates on the insurers’ own investment returns.

Nationwide will offer purchasers of the new annuity access to guarantees.

One, the Nationwide High Point 365 Select Lifetime Income rider with Bonus, includes a bonus of 10% of a client’s purchase payment added to the minimum income benefit value at contract issue.

The minimum income benefit value will grow at least 7% per year until the contract owner begins making lifetime income withdrawals, or holds the annuity for 10 years without taking withdrawals.

The product index menu includes the SG Macro Compass Index, which is based on the work of the quantitative research team at Société Générale, and the NYSE Zebra Edge II Index, which is based on work by the economist Roger Ibbotson.

The SG Macro Compass Index is designed to tilt toward growth assets when the markets are strong and toward defensive assets when markets are weak.

The NYSE Zebra Edge II index uses technology from Ibbotson to start with a list of 500 large companies’ stocks and to filter out the companies that seem especially volatile.

MoneyGuide Partnership

In related news, Nationwide is forming a partnership with Envestnet’s MoneyGuide financial planning software program.

The software includes income distribution illustration tools.

The partnership will give Nationwide wholesalers access to MoneyGuide, along with training resources to help financial advisors and other financial professionals use it.

Nationwide is hoping that the MoneyGuide partnership will help it get younger investors interested in annuities.

About 69% of Generation X investors, ages 41 to 56, and 75% of millennial investors, ages 26 to 40, say they are likely to choose an annuity in the next 12 months to help protect against outliving savings, Nationwide says.

(Photo: David Shih/Shutterstock)

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